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Forest product updates
Housing sector remains weak.
Lumber prices were mixed in June, with those for Douglas-fir flat and Southern Yellow Pine down 8.8%. Lower import and production levels offset relatively soft demand. While multi-family housing starts fell notably in May, permits issued held flat, suggesting limited downside risk in this sector over the coming months. The average 30-year fixed mortgage rate remains about 35% above pre-pandemic levels, trading within a tight range of 6.8% and 6.9%. While persistently high mortgage rates continue to pressure affordability, the National Association of Realtors (NAR) expects housing demand to pick up in the second half of 2025 due to rates easing and continued job growth. NAR also highlights low levels of serious mortgage delinquency rates as a sign of market strength. Futures markets suggest the Fed will cut the fed funds rate multiple times this year. (Mortgage rates often track the fed funds rate.) For more on interest rates, see the Quarterly Economic Update. Sierra Pacific plans a $253 million upgrade to its Eugene, Oregon sawmill, with construction expected to be completed in 2028.
Harvest activity and log deliveries have picked up, and some mills are reportedly building inventories. Prices held relatively flat in May, with a slight gain observed in the Puget Sound region and slight declines further south. While total log exports were relatively flat in May, a noticeable shift from Canada and India to Japan took place. During this period, the per unit value of exports increased given Japan takes among the highest value logs. Wildfire risk remains low to moderate, but below average soil moisture and year-to-date precipitation levels suggest this may change later in the summer.
Profitability
June 18, 2025Forest products: Slightly profitable - Neutral 12-month outlook
The housing market is in a difficult place and unlikely to improve much in 2025. While current log and lumber prices support profitability, they are unlikely to increase given underwhelming demand.
The U.S. housing market is the primary driver of forest products demand. Log and lumber exports play a relatively minor role, making up about 6% and 3% of total domestic production, respectively. On the West Coast, log producers have historically benefited from strong Japanese demand for high-quality grades. Following the Great Recession, demand from China increased significantly to support housing construction. These trends are reversing due to aging demographics and weakening economies. The Softwood Lumber Agreement sets the terms for Canadian lumber exports to the U.S., which make up about a quarter of total domestic supply.
Log production, exports and imports
Forisk. U.S. Census Bureau. Production levels were calculated using region specific recovery rates. Trade data was converted using .22 thousand board feet per cubic meter.
Lumber production, exports and imports
Forisk. U.S. Census Bureau. Trade data was converted using .452 thousand board feet per cubic meter.
Tariff tracker - Tariff rates applied to U.S. trade partners are consistenly updated to reflect policy changes. The World Trade Organization (WTO) tracks duties and tariffs on forest products. For your convenience, the following links will take you to tariff data for top markets, including Japan and Vietnam. Logs are currently exempt from tariffs for Canada under the United States-Mexico-Canada Agreement (USMCA), but please refer to the U.S. Trade Representative website for up-to-date information. The U.S. applies countervailing duties on Canadian lumber imports based on an annual review process (detailed information can be found at the Federal Register). Please consult with a trade lawyer or professional for detailed and up-to-date insights on tariff rates and their application to forest products.
For guidance on interpreting duty and tariff rates, please refer to our Tariff Guide.
Forest product updates
Housing sector remains weak.
Lumber prices were mixed in June, with those for Douglas-fir flat and Southern Yellow Pine down 8.8%. Lower import and production levels offset relatively soft demand. While multi-family housing starts fell notably in May, permits issued held flat, suggesting limited downside risk in this sector over the coming months. The average 30-year fixed mortgage rate remains about 35% above pre-pandemic levels, trading within a tight range of 6.8% and 6.9%. While persistently high mortgage rates continue to pressure affordability, the National Association of Realtors (NAR) expects housing demand to pick up in the second half of 2025 due to rates easing and continued job growth. NAR also highlights low levels of serious mortgage delinquency rates as a sign of market strength. Futures markets suggest the Fed will cut the fed funds rate multiple times this year. (Mortgage rates often track the fed funds rate.) For more on interest rates, see the Quarterly Economic Update. Sierra Pacific plans a $253 million upgrade to its Eugene, Oregon sawmill, with construction expected to be completed in 2028.
Harvest activity and log deliveries have picked up, and some mills are reportedly building inventories. Prices held relatively flat in May, with a slight gain observed in the Puget Sound region and slight declines further south. While total log exports were relatively flat in May, a noticeable shift from Canada and India to Japan took place. During this period, the per unit value of exports increased given Japan takes among the highest value logs. Wildfire risk remains low to moderate, but below average soil moisture and year-to-date precipitation levels suggest this may change later in the summer.
Profitability
June 18, 2025Forest products: Slightly profitable - Neutral 12-month outlook
The housing market is in a difficult place and unlikely to improve much in 2025. While current log and lumber prices support profitability, they are unlikely to increase given underwhelming demand.
The U.S. housing market is the primary driver of forest products demand. Log and lumber exports play a relatively minor role, making up about 6% and 3% of total domestic production, respectively. On the West Coast, log producers have historically benefited from strong Japanese demand for high-quality grades. Following the Great Recession, demand from China increased significantly to support housing construction. These trends are reversing due to aging demographics and weakening economies. The Softwood Lumber Agreement sets the terms for Canadian lumber exports to the U.S., which make up about a quarter of total domestic supply.
Log production, exports and imports
Forisk. U.S. Census Bureau. Production levels were calculated using region specific recovery rates. Trade data was converted using .22 thousand board feet per cubic meter.
Lumber production, exports and imports
Forisk. U.S. Census Bureau. Trade data was converted using .452 thousand board feet per cubic meter.
Tariff tracker - Tariff rates applied to U.S. trade partners are consistenly updated to reflect policy changes. The World Trade Organization (WTO) tracks duties and tariffs on forest products. For your convenience, the following links will take you to tariff data for top markets, including Japan and Vietnam. Logs are currently exempt from tariffs for Canada under the United States-Mexico-Canada Agreement (USMCA), but please refer to the U.S. Trade Representative website for up-to-date information. The U.S. applies countervailing duties on Canadian lumber imports based on an annual review process (detailed information can be found at the Federal Register). Please consult with a trade lawyer or professional for detailed and up-to-date insights on tariff rates and their application to forest products.
For guidance on interpreting duty and tariff rates, please refer to our Tariff Guide.
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