Timber and Forest Products Industry Snapshot

Timber, Timberland, and Logging

• Unusually wet conditions extended the spring mud season by three weeks, making forest roads impassable and delaying harvesting and hauling operations. As of early July, operations are beginning to recover, but there's substantial ground to make up.
• After a winter of oversupply, mills began to experience shortages due to delivery disruptions in spring.
• The Canadian spruce budworm outbreak remains a complication for both landowners and markets, as salvage operations for balsam fir have led softwood markets to become oversupplied with fir. Mills always prefer spruce over fir due to the shorter drying time required, and have pressured suppliers to limit the amount of fir they are receiving.
• Timberland market deal flow slowed considerably during prime viewing season as elevated global economic and tariff risk led many sellers to hit the pause button on new listings.

Softwood, Hardwood, and Pulpwood Markets

• The U.S.-Canada softwood lumber dispute remains unresolved. With the expiration of the temporary 90-day tariff reprieve looming, most producers/operators have adopted a cautious approach. Any changes in trade policy could significantly impact pricing and supply chains across the region.
• Regional pulp mill production during the quarter was limited by several planned and unplanned maintenance outages. Mills continued to purchase pulpwood during the quarter for supply chain stability and as a result, hardwood pulp inventories remain elevated.
• Despite continued headwinds in the housing market and elevated shipments of Canadian lumber ahead of expected duty increases which temporarily reduced pricing, regional demand for spruce and fir logs has remained solid, with pricing improving slightly during the quarter; continued improvement is expected through summer.  SPF sawmill producers continue to operate at or above break-even levels resulting in positive EBITDA, albeit at lower levels than 4Q’24 and 1Q’25. This is an improvement from the past few years.
• The eastern white pine lumber market experienced improving pricing during the quarter, with demand for pine logs steady. Pine mills with diversified operations and/or value-added products continue to perform better than others.
• Hardwood markets continued to slowly build momentum during the quarter, particularly for higher quality grades of hard maple and red oak. Demand for hardwood logs increased across all grades as many mills begin to replenish inventories from extremely low levels.