Kentucky sawmills face mounting closures as tariffs and fuel costs rise

WALINGFORD, Ky. (LEX News) — More than 70 sawmills in Kentucky have closed in recent years due to the exorbitant cost of doing business, according to a business owner.

James Wells is co-owner of Greentree Forest Products in Fleming County, a fourth-generation family business. He and his siblings employ 80 workers. Wells said the current crisis traces back to 2018.

"This really started in 2018 with the first round of tariffs," Wells said. "The second round of tariffs (last year) and trade wars have created even more havoc. You know, coupled with wars and, more recently, the fuel costs."

Fuel costs are a significant burden. Wells said Greentree Forest Products spends roughly $11,000 weekly on diesel fuel. The loggers who supply the company's timber face the same pressures, and some have halted operations entirely.

"We've had some of our loggers here who have just parked their equipment because they can't afford to operate their equipment, which means that instead of building inventory for winter, we're actually losing inventory right now," Wells said.

Even as the business struggles, Wells said keeping his employees working remains a focus.

"If we can break even, we feel like we've done something," Wells said. "Our focus is to keep those guys working, and ladies, 40 hours a week, so they can take care of their families and feed their families."

Wells also points to a federal policy — in place before a tree even hits the ground — that allows the export of raw logs from the United States. That policy sends milling work overseas, and the lumber is then sold by mills in other countries.

"For some reason, in this country, we have allowed the export of our raw material, our natural resource, which is a log. Well, when you do that, you lose all of these jobs," Wells said.

Wells' brother raised concerns about what could happen to supply chains if sawmills are forced to shut down or scale back considerably.

"About 90-95% of products are shipped on a wooden pallet. Those are hidden things people take for granted that will go away, or will go up, high in price, if we can't get some of these costs down," Wells said.

The wood for those pallets is treated for that purpose at the mills. If significant amounts of those shipping and storage crates are lost, the problem would be profound worldwide.

Lumber prices, meanwhile, have not kept pace with rising costs.

"We're selling lumber today, if you can believe this, for the same price we sold it for 15 and 20 years ago (despite) all the extra costs and expenses having gone up," Wells said.