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November 14, 2024
Forest product updates
Industry awaits lower interest rates.
The forest products sector appears to be in a holding pattern. Little has changed over the last year except for capacity curtailments throughout the West. Most in the industry expect interest rates will come down, which should support greater residential construction and repair/remodeling activity. Increased demand should improve log and lumber prices by mid-2025. With low production levels, even an uptick in demand could have an outsized influence on prices.
Anecdotal reports suggest some timberland owners are modestly reducing harvest levels amid weak markets, forcing some logging contractors to travel further to secure harvest contracts and/or idle equipment. Log export markets remain generally strong for West Coast producers. Lumber exports out of the Southern U.S. are increasing relative to the West and primarily going to Mexico and the Dominican Republic, followed by India, China and Canada.
Profitability
September 11, 2024
Forest product mills: Breakeven profitability - Neutral 12-month outlook
Timberlands: Slightly profitable - Neutral 12-month outlook
A weak housing market has led to weak lumber demand and this is unlikely to change until 2025. Current prices are near breakeven levels in the West.
Weak lumber markets have led to diminished demand for logs. This is unlikely to change until 2025.
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Forest Products Industry Perspective
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