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If you need help setting up services or accessing your accounts, please call our Customer Care Team at 866.552.9172 during business hours (7 a.m. — 5 p.m. PST, M-F) or email us at CustomerCare@AgWestFC.com.
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If you need help setting up services or accessing your accounts, please call our Customer Care Team at 866.552.9172 during business hours (7 a.m. — 5 p.m. PST, M-F) or email us at CustomerCare@AgWestFC.com.
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AgWest Farm Credit’s 12-month outlook sees forest products manufacturers and timberland owners as slightly profitable.
Drivers include flat lumber demand, reduced lumber and pulp/paper capacity and the implementation of the Private Forest Accord.
12-Month Profitability Outlook
Lumber demand flat
Lumber buyers are cautious in building excess inventories. While single-family housing starts remain resilient, multi-family home starts and existing home sales are falling and consumers increasingly appear financially stressed. Consumer loan delinquency rates are rising and the personal savings rate is falling (see the Quarterly Economic Update for more information on the economy). The longer interest rates remain elevated, the more likely new housing construction will fall as prospective home buyers get priced out of markets.
Home Sales and Average 30-Year Fixed Mortgage Rate
Source: National Association of Realtors. Freddie Mac. Mortgage Rate: 30-Year Fixed.
Lumber and pulp/paper supply down
Lumber capacity remains down in British Columbia, Canada, as wildfire-related evacuations in early Q2 reduced log supply and increased mill downtime. Lower supply has not impacted prices. Pacific Northwest regional pulp/paper production capacity is falling due to both closures and curtailments in the U.S. as producers adapt to changing consumer trends and preferences.
Timberland operators prepare for Private Forest Accord
Timberland operators in Oregon are readying themselves for compliance with the updated Private Forest Accord (PFA), which will come into full effect January 2024. The PFA is an agreement between conservation groups and timberland owners that aims to provide regulatory certainty and protect sensitive habitats. The PFA will reduce harvestable acreage by approximately 5% on privately owned timberlands, potentially reducing log supply over the long term.
Forest products manufacturers and timberland owners should be slightly profitable over the next 12 months, a major shift away from the recent profitability boons of 2020 to 2022. Lumber demand is flat due to fears of an economic downturn and reduced demand from new housing starts and repair and remodel markets. Reduced lumber capacity out of British Columbia has not translated to improved product pricing or overall profitability.
View the latest AgWest Forest Products Industry Perspective
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