Although a long-standing trade war and subsequent pandemic have dealt a crippling blow to the nation’s timber industry, a new opportunity is raising hopes in Tennessee. The University of Tennessee Institute of Agriculture is teaming up with the Tennessee Department of Agriculture on a grant designed to increase the state’s hardwood exports to Vietnam.
Tennessee is one of the top three hardwood lumber-producing states in the U.S. Exports have accounted for roughly 60 percent of the state’s hardwood production, mostly to one market — China. However, the ensuing trade war resulted in a decrease of more than $100 million in global sales for Tennessee suppliers, prompting this latest effort to diversify the state’s market for forest products.
“I have always been inclined to research that could impact decision-makers and industry participants,” said Andrew Muhammad, UTIA professor and Blasingame Chair of Excellence in Agricultural Policy. “This project is an excellent research opportunity that will inform how Tennessee can increase wood product exports to Vietnam.” Muhammad will conduct a detailed market assessment and provide trade insights and guidance as it pertains to this emerging market.
Vietnam is emerging as a major exporter of finished wood products such as furniture and flooring. The number of finished wood product enterprises increased from 2,500 in 2008 to 4,500 in 2017 with exports valued at nearly $11 billion. This growth has increased demand for forest products from the U.S. and other exporting countries.
From a supply standpoint, hardwood lumber is one of the largest export commodities in Tennessee. Approximately 52 percent of the state is covered in forest and 89 percent is comprised of hardwoods. Prior to the pandemic, forestry accounted for 3.5 percent of the state’s economy and generated $24.3 billion in output. In 2017, exports of Tennessee forest products and furniture and related products outside the U.S. totaled $343.7 million.
Vietnam is already an important market for Tennessee forest products, ranking as its second-largest foreign market in 2019 to the tune of $25 million. This grant effort would build upon and strengthen this market and provide an opportunity for the state to capture increased market share in Vietnam.