US
timber production is expected to slowly increase through 2025 due to
government initiatives (like a 25% federal harvest goal) and mill expansions,
but a major supply surge to significantly lower prices isn't expected this
year; instead, prices may stabilize above pre-pandemic levels, facing ongoing
demand, labor, and Canadian supply constraints, with more noticeable relief
potentially coming later, maybe into 2026, as new harvests come online and
supply chains adapt, but a large deficit will persist for years.
Factors Influencing Production & Prices in 2025:
Government Action: An executive order aims for a 25% increase in federal timber harvests, with a goal of 4 billion board feet annually by FY2028, but this is a gradual process, notes a USDA announcement.
Mill Capacity & Investment: Mills are expanding, but production growth is slow as they're wary of oversupply, reports Farm Credit East.
Demand: Housing starts remain pressured by high mortgage rates and costs, limiting demand growth, says CAES Field Report.
Supply Constraints: Fiber shortages in BC and Western US, plus ongoing log-jammed supply chains, hinder rapid production increases, notes this article.
Price Outlook for 2025:
Prices are expected to stabilize but remain elevated due to persistent demand and supply issues, according to Lumber Barn.
While some stability or slight dips in pulpwood are seen, higher-grade lumber (kiln-dried) continues to see price increases due to energy costs, reports Church & Church Lumber Co.
When to Expect More Significant Changes:
Significant relief from structural supply deficits will take years, not months, as the U.S. relies heavily on Canadian imports, reports Wood Central.
The second half of 2025 might see a positive momentum shift as activity picks up, but a big price drop isn't the consensus for this year, suggests Fastmarkets.
An increase in U.S. timber production significant enough to increase supply and consistently lower prices is not expected in 2025 due to ongoing supply chain challenges, mill capacity adjustments, and persistent demand in the housing market.
While lumber prices have stabilized from their pandemic peaks, they remain higher than pre-pandemic levels. The market in 2025 has been characterized by volatility and modest price increases in specific segments rather than a broad decline.
Key Factors in 2025 Market Dynamics
Stable to Rising Prices: Prices are generally expected to remain in a stable, albeit elevated, range through 2025. Some forecasts even projected price increases, particularly if tariffs on Canadian imports were to be resumed.
Production Adjustments: Many sawmills have adjusted their output to align with current demand levels and prevent oversupply. Some mills are running at reduced capacity or have shut down, which limits overall supply growth.
Strong Demand: A significant U.S. housing shortage (estimated at around four million homes) and steady demand for home renovation projects continue to underpin the market, preventing a sharp decline in prices.
Supply Constraints: A number of factors are limiting raw timber supply, including:
Canadian Imports: Canada, a major U.S. supplier, has faced production issues from pest infestations, wildfires, and regulatory challenges, reducing export capacity.
Natural Disasters: Rebuilding efforts following natural disasters have created localized demand spikes and temporary shortages.
Labor Shortages: Shortages of labor in logging and mills have also impacted the industry's ability to ramp up production quickly.
Government Action: The USDA has invested in expanding domestic production and strengthening rural economies, with a goal to increase timber harvest on national forests by 25% to reach 4 billion board feet annually by fiscal year 2028, but the full effects of this will take time.
Outlook
Beyond 2025
Industry
experts anticipate a potential shift in momentum in 2026, with demand
growth expected to gather momentum and outpace supply, which could drive prices
even higher.
These market reports analyze the factors influencing U.S. timber production and prices in 2025, including demand, supply constraints, and potential tariffs.
Norb Leahy, Dunwoody GA Tea Party Leader
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