LUMBER PRICING, MARKET TRENDS

As of May lumber futures fell below $600 per thousand board feet, settling around $560-580 (U.S.), driven by weak consumer sentiment and sluggish demand. While prices remain volatile, this represents a moderation from earlier in the year.

Lower than anticipated single-family construction is causing weaker lumber demand. The National Association of Home Builders (NAHB) says high tariffs on Canadian softwood continue to constrain supply and raise costs. Lumber demand is muted, and North American wood product producers are experiencing overall weak sawmill utilization (around 64 percent).

U.S. plywood markets in March and April experienced a strong, early-season surge, with prices rising 10–15 percent over four weeks starting in mid-March. This upward trend, driven by tightened supply, defied typical, slower early-spring market patterns.

The U.S. Department of Commerce completed the expedited first sunset review of the antidumping duty order on wood mouldings and millwork products from China and determined that revocation would likely lead to continuation or recurrence of dumping, with weighted-average dumping margins up to 231.60 percent.

EQUIPMENT AND MACHINERY SALES

The U.S. forestry and logging machinery market is experiencing strong, price-driven revenue growth despite potential volume challenges. Major manufacturers are pivoting toward technology-driven, high-efficiency equipment.

While new equipment sales have shown signs of softening in volume, revenue for manufacturers remains high due to 3-4 percent price increases, partly driven by supply constraints. Dealers report high inventory levels of new equipment, which may lead to aggressive, “deal-making” scenarios later in the year.

Caterpillar reported a very strong first quarter. Its construction industries segment, which includes many forestry applications, saw a 38 percent revenue increase to $7.2 billion. John Deere introduced AI-enabled harvesting systems specifically designed to improve logging efficiency and lower fuel consumption.

While new equipment sales are expected to be flat or slightly down, used equipment sales are projected to be stable or stronger, especially for high-hour, late-model units, as contractors manage capital expenses.

Machinery and equipment sales for the Western U.S. lumber industry have been driven by a need for automation and efficiency upgrades despite a volatile, constrained market. While sawmill capacity is contracting in some areas, key investments focus on specialized, high-value production, with technology, such as automated kilns, seeing demand to boost efficiency. High-efficiency sawmill machinery, including automated sawing and digital drying technology, is in demand to offset rising labor costs and maximize output.

NEW PROJECTS

Family-owned Stimson Lumber Co. is investing $50 million to build a new sawmill, replacing its operating plant near Gaston, Oregon. The new sawmill would triple current annual lumber capacity to 300 million board feet, focusing on 4- to 16-inch top diameter logs. It is expected to be operating by the end of this year.

So far this year, new sawmill projects and investments in the Western U.S. are heavily focused on California, supported by over $60 million in federal funding aimed at wildfire reduction, forest restoration, and high-priority timber processing. Key projects involve establishing new, specialized facilities and upgrading existing operations to improve efficiency in Washington and California. Key California projects include a new sawmill for Alpenglow Timber (Lake Tahoe Area) and improving capacity for Sierra Forest Products.

FOREST POLICY, TIMBER HARVESTING CONDITIONS

The U.S. Department of Agriculture announced a major overhaul of its Forest Service division. The move is an effort to transfer control of federal lands to states.

“Moving the Forest Service closer to the forests we manage is an essential action that will improve our core mission of managing our forests while saving taxpayer dollars and boosting employee recruitment,” said U.S. Secretary of Agriculture Brooke L. Rollins.

U.S. House Republicans from Western states laid out a figurative welcome mat for the U.S. Forest Service as its chief pitched plans to whittle down the agency’s budget, move its headquarters to Salt Lake City, and rely more heavily on states to manage millions of acres. A subcommittee ranking Democrat, Rep. Chellie Pingree of Maine, said she’s deeply worried. “I guarantee you, my state is not prepared to take over all of the things that the federal government is currently doing.”

Business leaders in the outdoor recreation sector are allying with recreationists and conservationists to push back.

A long-brewing battle over converting wood to energy is resurfacing in Congress. Forest owners are pushing lawmakers to make leftover material from logging projects and lumber milling a bigger part of the federal renewable fuel standard, which encourages alternatives to petroleum to power vehicles and airplanes. The effort faces opposition from pulp and paper companies that use similar materials.

ECONOMY, SUPPLY CHAIN

April’s reported U.S. home builder optimism for single-family home demand fell four points from the prior month to a score of 34, according to the National Assoc. of Home Builders. Economic uncertainty, rising building costs, and flat interest rates resulted in declining April builder sentiment.

However, the association projects that 2026 U.S. single-family housing construction should see a modest, stabilizing rebound, with housing starts expected to rise approximately 1.3-6 percent. Multi-family housing construction is expected to stabilize or drop slightly in 2026.

The Remodeling Market Index (RMI) slipped two points from the prior quarter to a score of 62, remaining in positive territory, as reported by National Assoc. of Home Builders. A leading use of structural softwood, home remodeling is a key measure of Oregon wood demand. On a scale of 0 to 100, an RMI score over 50 indicates that more remodelers report “good” market conditions than poor. “Ongoing positive remodeler sentiment is consistent with the NAHB outlook, given an aging housing stock and the lock-in effect of elevated mortgage rates keeping owners in their homes,” said NAHB Economist Robert Dietz.