The Forest Industry Contractors Association says a continuing log jam in the main Chinese market has led to the harvesting of logs from farm forests drying up in New Zealand.
The association's chief executive, John Stulen, said four-and-a-half million cubic metres of wood was sitting in ports in China, resulting in lack of demand and a drop in prices.
He said a trying aspect of conditions at the moment was that the farm forestry log market had collapsed.
"Prices in China are just not high enough to support the harvesting in small forests, because of the high fixed costs to do with putting in roads and extracting wood."
He said apart from those with long-term contracts, small forestry harvesting had more or less shut down.
Mr Stulen said China's stockpile of imported wood did clear every year, but it would be some months before it was known just how quickly that would happen.
Despite the battles the industry is facing, about 40 former Harvestpro workers have found new jobs in the sector.
Late last month, Harvestpro - one of the country's largest forestry contractors - had its equipment seized by financiers. The company's had to stop all its operations, leaving more than 200 people in Northland and Gisborne without jobs.
A former Northland manager for the company, Blokie Sorenson, said most staff had not had a problem finding another job, but some had left the region all together.
He said apart from one meeting, the company had not really provided any information about the collapse.
"Earlier in the piece we were able to talk to them and set up a meeting for down there, which we did take (them) up on.
"It was quite a good meeting - we were given a fair bit of information. The main point for us was finding out if everybody was going to get paid.
"Workers are still disappointed and still a bit shocked, but I think if Harvestpro opened the doors tomorrow, everybody would go back."