Wet winter weather likely spells shortages for Arkansas lumber mills, industry

By Ryan McGeeney
U of A System Division of Agriculture
Jan. 11, 2019

Fast Facts:

Late 2018 rains led to steeply lower timber harvests in December
Prolonged supply outages could result in layoffs, reduced capacity
Timber industry contributes about $3 billion to Arkansas economy

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MONTICELLO, Ark. – Timber harvests in Arkansas dropped off steeply in the final month of 2018, as heavy and persistent rainfall throughout much of the state made the process increasingly difficult and expensive.

According to severance tax reports from the Arkansas State Department of Finance and Administration, total tonnage harvested in 2018 dropped more than 6.2 percent from 2017’s harvest, to about 22.7 million tons. While month-to-month harvest numbers in 2018 were actually stronger than 2017 for about half the year, Arkansas wood processing facilities received only 726,921 tons of timber in December — 47 percent less than the next lowest monthly harvest in two years.

The reduced harvest is already leading to shortages at lumber mills throughout Arkansas, and will likely have ripple effects throughout the state’s economy. Matthew Pelkki, associate director of the University of Arkansas System Division of Agriculture’s Arkansas Forest Resources Center, said that the decline in supply at mills around the state is happening earlier than in typical years, and is cutting deeper as well.

“There’s typically a drop-off when things get wet — but things don’t normally get wet until late November into December, when the rain really starts coming,” Pelkki said. “And it’s usually January and February when the soils are so wet that loggers have trouble getting access.”

According to data from the National Weather Service, Arkansas received 14.64 inches more precipitation than average in 2018; rainfall in December alone was 3.51 inches above its monthly average.

Pelkki said that unless Arkansas now experiences a dryer-than-average first quarter, lumber yards will probably not be able to catch up without incurring higher costs, either hauling timber from greater distances or trying to contend with saturated forest soils.

“Loggers will push to harvest in areas that are still wet, putting their equipment at risk,” he said. “Or they’re going to be using more expensive equipment — instead of wheeled skidders, you can go with tracked equipment. But tracked equipment costs more to operate, and many loggers don’t have that equipment.”

“It’s a risky situation for loggers,” Pelkki said. “Operating in really wet soils can damage logging equipment, but it’s also environmentally risky, in terms of best management practices: soil protection and water quality protection. When you’re trying to log on marginal areas when they’re wet, that’s an issue. The Arkansas logging industry has the highest compliance with best management practices in the South, which means that loggers aren’t just going out into the woods.”

If the weather dries, logging may resume and shortages subside. The most likely scenario, Pelkki said, is that logging costs will increase temporarily, and those costs will be passed on to mills and, eventually, consumers.

Pelkki said the worst-case scenario means mills shutting down because of lack of raw timber material, resulting in layoffs at mills and beyond. He said loggers are the least able to weather sustained work outages, and the state would likely see workforce losses in the logging and log transportation sectors, as loggers seek work with heavy equipment operations and long-haul trucking operations or other transportation professions.

“If you’re a good tree felling machine operator or log trucker in Arkansas, and there’s no paycheck coming in, all of a sudden, that construction job or on-the-road trucking job sounds really good — and you take that, because you’ve got bills to pay. So we lose people out of the logging and log transportation sector relatively quickly when we have these outages for longer periods of time.”

The forestry industry directly employs more than 27,500 people in Arkansas, about 4,300 of whom are loggers. Data collected through the Division of Agriculture estimates the forestry industry indirectly creates more than 65,000 jobs throughout Arkansas, directly contributing about $3 billion to the state’s economy.

Pelkki said the last sustained drop in Arkansas timber production occurred about a decade ago.

“In 2009, we had a very similar weather situation in the last half of the year, and that was really devastating to the logging industry,” he said. “It still hasn’t recovered from that. There are logging firms that shut down and never came back — that capacity hasn’t returned.”

Pelkki said the weather affecting the 2018 timber harvest — and many other aspects of Arkansas agriculture — should be taken seriously when considering the future of the state’s production.

“This is an example of why we need to be thinking about long-term impacts of climate,” he said. “It’s not just global warming — we’re seeing increased cycles of wet and dry. Drought is a problem in the spring. We could hope for a dry winter — this would help a buildup of timber at the mills; but if we have a dry winter, and that drought continues into the spring, that could have other negative effects, such as increased wildfires and increased mortality of tree seedlings.

“This is just one more example of why research into how to make our production systems more resilient is needed,” Pelkki said.

To learn about Arkansas forestry, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu. Follow us on Twitter at @AR_Extension.

About the Division of Agriculture

The University of Arkansas System Division of Agriculture’s mission is to strengthen agriculture, communities, and families by connecting trusted research to the adoption of best practices. Through the Agricultural Experiment Station and the Cooperative Extension Service, the Division of Agriculture conducts research and extension work within the nation’s historic land grant education system.

The Division of Agriculture is one of 20 entities within the University of Arkansas System. It has offices in all 75 counties in Arkansas and faculty on five system campuses.

The University of Arkansas System Division of Agriculture offers all its Extension and Research programs to all eligible persons without regard to race, color, sex, gender identity, sexual orientation, national origin, religion, age, disability, marital or veteran status, genetic information, or any other legally protected status, and is an Affirmative Action/Equal Opportunity Employer.

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Media Contact:Ryan McGeeney
Communication Services
U of A System Division of Agriculture
Cooperative Extension Service
(501) 671-2120
rmcgeeney@uada.edu
@Ryan_McG44