The impact of rapid fuel costs inflation on Arkansas’ logging sector

Abstract

The logging sector is vital to the wood supply chain supporting both the sustainable management of forest resources and the prosperity of the forestry industry. This study analyzed the immediate impact of rapid fuel cost inflation from February to May of 2022 on the logging sector based on a survey sent to 430 logging and/or hauling firms in Arkansas. We made a direct comparison between the January and May operating costs and production quantities. Results showed that on average logging and/or hauling firms paid about 50% more per liter of diesel fuel in May as compared to January; however, their purchasing frequency remained unchanged, and purchasing quantity for off-road and on-road diesel increased slightly. More than half of the firms received additional compensation from sawmills, averaging $1.4 per metric ton. The overall timber production declined in May with respect to January, but the firms displayed different reactions. Whereas 31.6% of the firms harvested more and 18.4% kept their production constant, 50.0% of the firms significantly lowered their production by 16.1%. There are several potentially confounding factors explaining the loggers’ different responses during the high fuel price context.