May 6, 2024

Ag Economy

Timber and Forest Products Industry Snapshot


  • After a few years of high volatility in the Northeast marketplace, the last couple of quarters have remained fairly unchanged. Demand for most products is stable while a few products appear to be improving slowly.
  • Northeast log prices have come off elevated levels post-COVID for nearly all species in 2023. The sudden pivot in the hardwood pulpwood market and continued softness in the hardwood lumber market have freed up harvesting crews to focus on softwood species. This supply increase helped catalyze log price decreases, partially offset by logging constraints. Excessively wet conditions in 2023 and difficult operating conditions in the Winter of 23/24 have impacted harvesting volume.
  • The biggest transition in the Northeast forest products market has been the hardwood pulp and pulpwood market. The unsustainable demand for hardwood pulpwood from pulp and paper facilities and corresponding price levels came crashing down in early 2023, as slowdowns in industrial pulp and paper production and excess inventory reduced mill purchase volumes. Almost instantaneously, pulp mills went from buying as much wood possible to enacting supply quotas and reduced pricing by up to 20%. Timberland owners and foresters adjusted harvesting strategies accordingly, and firewood operators have been inundated with supply opportunities. Market participants are tracking this closely. 


  • Eastern SPF lumber prices have potentially hit this cycle’s trough and are positioned to build on recent price momentum through the $500/MBF threshold. Log inventory at Northeast sawmills have been generally low, however, log deliveries have been more dependable compared to hardwood sawmills. Log cost decreases continue to lag lumber price changes, resulting in periods of below breakeven performance. Recent price improvement coupled with log cost decreases have positioned mills well for profitability. 
  • Eastern White Pine lumber prices, unlike its Eastern SPF and hardwood cohorts, have maintained solid price stability since coming off their highs in the post-COVID market rally. Industrial grade products continue to experience the most softness in the species, but all higher and value-added products have maintained pricing power. Demand for Eastern White Pine continues to be good, resulting in minimal to no log cost relief for mills.  
  • Steady log supply and weak demand continue to be the primary issues for hardwood sawmill operators. With the hardwood pulpwood market downturn, landowners and foresters are avoiding hardwood stands impacting log supply. Sawmills have adjusted accordingly by rationalizing production levels to reduced inventory that aligns with log supply/sales volumes, resulting in extended downtimes and below capacity production. Hardwood lumber prices trended down in 2023, with some species, such as hard maple, decreasing in price nearly 50% from peak pricing in summer 2022. 

Pulp and Paper 

  • The first half of 2023 was marked by still-elevated inflation and softening macroeconomic conditions. Demand for many pulp and paper products has declined and prices have started to erode, especially for market pulp and packaging paper grades driven largely by weaker industrial production.


  • Logging capacity remains a key hindrance in the forest products supply chain, as the multi-year trend of consolidation and retirement of an aging workforce has impacted the number of operators to haul wood to mills. Several timberland owners and foresters have increased pay to logging contractors in excess of 20% to remain competitive.


  • There were multiple large timberland sales (30,000 acres plus) in the second half of 2023 and into 2024 that commanded prices in excess of 120% of full timber value. Prices seem to be influenced by excellent liquidity in the market and the potential to monetize carbon credits to create another meaningful source of cash flow.
  • Timberland valuations remain above long-term averages supported by investors diversifying capital into real estate and timberland in the current inflationary environment. Commercial transaction sizes generally remain within the 1,000-5,000 acre range. HBU and smaller timberland transactions, while down from the post-COVID demand surge, have been sustained, supported by out-of state buyers looking for vacation or second homes.


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