By Tennessee Public News Service
The pandemic has shrunk U.S. forest exports, and economists say supply disruptions in Southeast Asia, where American logs and lumber are turned into furniture, is to blame – along with a drop in consumer demand.
Professor of agriculture and resource economics at the University of Tennessee Knoxville Andrew Muhammad said U.S. furniture sales dipped by 66% in April, around the time stay-at-home orders went into effect. He said over the summer, U.S. forest producers lost more than $670-million.
“Tennessee is actually particularly hurt by this, more so than the national average and more so than the regional,” Muhammad said. “Part of that is, many Tennessee producers are highly reliant on hardwood exports to Asian markets.”
He added these losses have been exacerbated by a longstanding trade war that has curbed the sale of U.S. forest products to foreign markets, particularly China. Forest products, including logs and lumber, are the third leading U.S. agricultural export, after soybeans and corn.
In 2018, orders from China accounted for nearly $3 billion of American timber.
Muhammed noted while the softwood sector, mostly used in construction and in paper and pulp products, seems to be buffered from the effects of COVID-19, sawmills across the state have been hard-hit by both COVID-19 and the loss in international trade.
“And so, for example, there’s the trucking industry, there’s the income from the laborers both at the sawmill as well as in the logging industry, and their income is also spent, and so you do get this multiplier effect,” he said.
In 2017, the forestry sector provided nearly 100,000 jobs in Tennessee and an economic impact of more than $24 billion annually – nearly 3% of the state’s economy.