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Trump Administration issues executive order to increase log supply.
The Trump Administration issued the ‘Immediate Expansion of American Timber Production’ executive order on March 1. It takes a multi-stage and multi-agency approach to increase timber production on federal lands by reducing/streamlining regulations, updating procedures and setting target harvest levels, among other actions. The long-term impact remains unclear. Industry participants are unlikely to change operations until there is more certainty, which may take multiple years. USDA announced a public-private partnership with Sierra Pacific Industries to place fuel breaks on national forests in California and Oregon over a three-year period. This should reduce wildfire risk while slightly increasing timber supply. Public-private partnerships may become more common as the Trump Administration prioritizes wildfire prevention.
Lumber prices have slowly increased since mid-2024 and are now up 18% year over year. Uncertainty around trade policy is adding pressure to the housing sector, which is already struggling with persistently high interest rates and building costs. The National Association of Home Builders Housing Market Index fell to 42 in February following several months of increases, indicating weak sentiment among home builders. Timber prices have held relatively constant and are likely to continue doing so until the housing sector picks up.
Profitability
March 12, 2025
Forest product mills: Slightly profitable - Neutral 12-month outlook
Timberlands: Slightly profitable - Neutral 12-month outlook
Lumber prices are unlikely to increase meaningfully given weakness in the housing sector. It remains unclear whether home construction will pick up in 2025.
Log prices are unlikely to improve until home construction picks up.
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