Kentucky Wood Industry E-News 

 
UK Forestry Has a New Website
Check out the new UK Forestry Extension website here.
Kentucky's Updated Forest Industry
Economic Impact 
The full updated Forest Industry 
Economic Impact report for 2015 is now available.
  • $9.1 billion in direct economic contribution.
  • $14.6 billion in total economic contribution a 9% increase over 2014. 
  • 28,408 jobs in the forest industry and an estimated 57,750 jobs overall.
  • 713 facilities located in 109 of Kentucky's 120 counties, gaining 10 facilities since 2014.
Click here for the full report.
LEED Accepts SFI And American Tree Farm
In April the U.S. Green Building Council (USGBC), the governing body for the Leadership in Energy and Environmental Design (LEED) green building rating system, announced plans to create a new opportunity for using wood products in buildings, including wood from a number of existing certification programs. USGBC's new alternative compliance path will allow wood from all credible forest certification systems operating in the U.S. including the   
American Tree Farm System (ATFS), the Forest Stewardship Council (FSC), the Program for the Endorsement of Forest 
Certification Systems (PEFC) and the Sustainable Forestry Initiative (SFI). 

According to the USGBC, the new pilot program requires a building team to affirmatively source 100% of the wood used on a project from legal (non-controversial) sources, as defined by ATSM standards. It applies, at a minimum, to structural framing, general dimension framing, flooring, sub-flooring, wood doors and trim. In addition, at least 70% of the wood (based on cost) must be verified as coming from responsible sources, also as defined by ATSM.  If  the  project meets those standards, a project team may count 100% of wood products that are from certified sources towards the one-point certification credit. USGBC introduced the ACP pilot to close a loophole in the current raw materials credit that only required a certain percent-age of wood to be FSC certified, while the rest of the material did not need to be verified legal. Previously, USGBC only recognized wood certified by the FSC. With more than 80 Tree Farm Logo million acres certified by ATFS and SFI in the U.S., and only 33 million acres certified by FSC, opening LEED to ATFS and SFI means more American-grown wood products can be used in construction and building projects seeking LEED certification. About half of all commercial buildings are built to some sort of green standard. The Kentucky Forest Industries Association along with the Hardwood Federation and ATFS have been long-time proponents of USGBC recognizing all responsible certification programs, opening the door for more suppliers and landowners to provide their products and materials to LEED projects. The Association and related groups welcome this move and look forward to working with USGBC to further expand inclusion of wood and wood products in their programs.
 
This article was produced by the Kentucky Forest Industries Association (KFIA). Interested in becoming a member?
Contact Michele Brewer: 502-695-3979
RTA Tie Grading Workshop
Bangor, Wisconsin, August 2-4, 2016
Presenters include UK's Dr. Terry Conners and Dr. Jim Ringe
For more info or to register click here.
Railroad Tie Markets
Throughout much of Kentucky we are getting reports of decreased tie production and some price reductions and quotas. While price reductions and quotas may not be significant in all regions of Kentucky, treatment facilities have lowered pricing and cut production levels back over the last few weeks. Some of the reasons given from different sources are that:
 
1) Rail traffic and revenues have decreased greatly due to less oil, gas and coal extraction and shipments.
2) Norfolk Southern is holding back expenses (including rail maintenance) to try and hold off a takeover from Canadian National.
3) Class 1 railroad companies are reducing their record investments in railroad maintenance and improvement, and fewer ties are needed to keep up with regular maintenance.
4) According to the Railroad Tie Association website, many facilities have a large inventory many of which are at or near capacity.
 
While Kentucky will remain an important source of tie logs, treatment facilities may become more selective, require fewer ties, and likely pay less for them. It is hard to tell right now how long these issues will affect tie pricing and consumption. Projections indicate it will likely take a while for things to shake out and the market to adjust. A few optimistic sources are projecting increased usage for next year, presumably the effect of delayed purchases from this year.
US Housing Market Report March 2016
In aggregate, housing data were somewhat disappointing for March. Will we see a rebound in April based on the mostly positive unadjusted March data? Multifamily construction spending is at the greatest level since construction spending began being reported in 1993. New sales are still stressed as they remain well below their historical average. Existing house sales were flat for the first quarter; construction and sales of new single-family houses in the upper price echelons are solid; and improvement or remodeling expenditures decreased year-over-year. Housing, in the majority of categories, continues to be less than their historical averages. The new SF housing sector is where the majority of forest products are used and this housing sector has room for improvement.

Pros:
1)Historically low interest rates are still in effect;
2)As a result, housing affordability is good for most of - but not all of the U.S.;
3)Household formations improved from Q1 2015 to Q1 2016; yet, nearly 66% of the formations were renter households (occupied housing data from the Current Population/Housing Vacancy surveys);
4)Some builders are beginning to focus on entry-level houses; and
5)Consumer attitudes towards housing are improving.

Cons:
1)Lot availability and building regulations (according to several sources);
2)Changing attitudes towards SF ownership and as stated by some - "gentrification";
3)Job creation is improving and consistent but some economists question the quantity and types of jobs being created;
4)Stagnant real median household incomes;
5)Strict home loan lending standards (including TRID) plus constrained builder loans - AD&C; and
6)Global uncertainty?
 
The housing report is a free service of Virginia Tech, Virginia Cooperative Extension, and the U.S. Forest Service.  The reports are intended to help gauge future business activity.  All past housing reports are archived here.
Log a Load for Kids Visits UK
Children's Hospital
In April the Log a Load for Kids Program visited UK children's hospital giving over 90 presents to children being treated in the hospital as well as a solid oak train table and a solid oak play table. This is an amazing program that the wood industry funds to improve the level of care that children get when receiving treatment at the facility. "Log a Load for Kids Committee will participate in the Pediatric Cancer Survivor Picnic August 28 in Lexington Kentucky at Keeneland Race Track. Games and prizes are arranged for a day of fun for the survivors, a ceremony honoring the survivors and a balloon release for the ones who gained their wings is also held that day."
May 2016
University of Kentucky
Department of Forestry
Contacts You Need: 

 

Chad NIman,
Bobby Ammerman,
bammerma@uky.edu

Terry Conners
tconners@uky.edu


Jeff Stringer,

stringer@uky.edu 

 

forestry.extension@uky.edu


UK Forestry Logo





 
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