Kevin Mason
Economic Outlook: Risks abound for 2026 and beyond but we see little chance of upside surprises for global GDP growth next year. Instead, we forecast modest declines in both US and Chinese GDP in 2026, with the Eurozone growth rate nudging up slightly from depressed levels. US-driven tariffs will stabilize but remain a drag and may become the norm for the next three years. As we’ve noted before, demand won’t be driving upside for the forest sector. Interest rate relief in the US continues to lag earlier expectations (with two further, 25bps cuts expected next year), and a US housing recovery will likely be pushed out to the second half of 2026 at the earliest (potentially 2027). A further weakening of the USD relative to other major currencies will create additional headwinds for US-based producers focused on exports but should also put downward pressure on US imports.
Forest Products Outlook: For most markets, the first half of 2026 will look a lot like 2025, with oversupply resulting in weak prices and lacklustre earnings. Highlights include:
- Housing starts will slip next year to 1.33MM as mortgage rates are expected to move only moderately lower. Affordability issues persist.
- Log prices should trend sideways, with some markets up and others down. Demand from China could rise as its US log ban has ended.
- Lumber prices will move up in 2026 as supply reductions related to high costs (duties, tariffs, etc.) begin to bite harder.
- Panel prices are likely to remain rather low in 2026 due to OSB (particularly) facing oversupply issues as a couple of mills ramp up.
- Pulp prices hinge on supply dynamics; the situation has changed as China has boosted its internal supply. Although prices are moving off their lows, shuts are needed to maintain upward momentum.
- Newsprint demand will drop by double digits next year, but, with some mills currently offline, prices should hold until supply restarts.
- Paper prices will be mixed, with expectations for an increase in uncoated woodfrees; most other grades should hold at/near year-end levels. The removal of tariffs would push prices lower.
- Containerboard producers are expected to drive a price hike in Q1 given the massive capacity shuts this year. Demand will remain sluggish, but rising box shipments aren’t needed to support hikes.
MONTREAL, Quebec – Domtar announced a curtailment in its lumber production. Due to challenging market conditions, US tariffs, and ongoing economic uncertainty, the company will temporarily reduce its lumber production by 150 million board feet for the first quarter of 2026 across its facilities in Quebec, Ontario and the United States. “The demand for lumber in North America remains weak, requiring us to adjust our production levels in line with market conditions,” said Luc Thériault, CEO, Wood Products, and President – Canada, for Domtar. “While this decision is necessary, we are fully aware of the impact it will have on our employees, contractors, suppliers and the communities in which we operate.” Domtar will continue to monitor market conditions and adjust its production plans accordingly. Domtar has a workforce of nearly 14,000 employees in more than 60 locations across North America.
With the fate of North America’s free trade pact on the line, 2026 will be a significant year for some of Canada’s hardest-hit sectors in the trade war with the United States—including auto, steel, forestry and aluminum—as they advocate for Ottawa to do what’s necessary to preserve the deal, and to also help these sectors in the meantime by following through on domestic support measures. …Derek Nighbor, CEO of the Forest Products Association of Canada, said that Canada’s auto and forestry sectors are among the most highly-integrated with the US. While both sectors share this deep integration, Nighbor highlighted a critical distinction for forestry: unlike other industries, forestry facilities cannot be relocated to another country because the natural resource—the trees—remain in Canada. This comment comes amid heightened concerns regarding the 2026 CUSMA review and ongoing trade disputes, such as US softwood lumber tariffs. [to access the full story a Hill Times subscription is required]
VANCOUVER, BC — West Fraser Timber announced that it will record an impairment of its Lumber segment goodwill in the fourth quarter of 2025 due to persistently challenging economic conditions. The Company is also providing initial 2026 guidance for key product shipments, operational costs and capital expenditures. In Q4-2025, West Fraser expects to record an approximately $409 million non-cash impairment of goodwill as a result of the protracted downcycle that has caused management to recalibrate certain assumptions used in its annual goodwill impairment test. Adjustments to these assumptions include, but are not limited to, species-specific product pricing trends, lower demand and pricing for wood chip residuals, and the depth and duration of the current downcycle and its expected recovery. The impairment represents the entire amount of goodwill associated with the Company’s US lumber operations.
A new global risk assessment is warning that no country would be more “profoundly affected” by a political upheaval in the US than Canada. Published Monday, the Eurasia Group’s “
President Trump has delayed new tariff increases on upholstered furniture, kitchen cabinets, and vanities for a year, pushing their implementation to 2027, according to a 
The 
WASHINGTON — U.S. President Donald Trump said Tuesday the Canada-United States-Mexico Agreement on trade is “irrelevant” to him and Americans don’t need Canadian products. “It expires very shortly and we could have it or not,” Trump said while touring a Ford plant in Michigan. “It wouldn’t matter to me. I think they want it. I don’t really care about it.” Trump statements have rattled Canada and Mexico ahead of a mandatory review this year of the future of the continental trade pact, known as CUSMA. The president told reporters that “Canada wants it” but the United States doesn’t need anything from its northern neighbour. The three countries have started domestic consultations on the review and Dominic LeBlanc, the minister in charge of Canada-U.S. relations, is set to meet with U.S. counterparts in mid-January to launch formal CUSMA talks. The trade pact has shielded Canada and Mexico from the worst impacts of Trump’s tariffs.
The U.S. Endowment for Forestry and Communities has announced a new collaboration with the Georgia Institute of Technology to address the far-reaching social, economic and environmental impacts of pulp and paper mill closures across the United States, particularly in the rural South, where these mills have long served as economic anchors. The Endowment and Georgia Tech are developing an integrated decision-making dashboard to help policymakers, community leaders and industry stakeholders quantify the effects of mill closures and identify data-driven pathways to offset them through the sustainable use of forestry residues… Over the past decade, nearly 50 paper mills have shut down nationwide … resulting in the loss of thousands of jobs and disrupted local supply chains that once connected family forest owners, loggers, sawmills and manufacturers… As markets for timber and forestry byproducts contract, landowners face reduced incentives for active management – conditions that can increase the risk of wildfire, invasive species and forest conversion to other uses.
Plywood importer InterGlobal Forest, which is seeking a rehearing of its case challenging CBP’s finding that it evaded antidumping and countervailing duties on plywood from China, 
Lumber futures rose toward $535 per thousand board feet, rebounding from the September low of $528 reached on January 7th after a low liquidity holiday sell off unwound, improving seasonal demand expectations and longer term supply tightening. Renewed engagement from market participants, signaled that forced selling and the thin trading conditions that pushed prices to multi month lows have faded. Seasonal demand expectations have strengthened as builders begin positioning ahead of the spring construction period, when consumption typically improves following year end destocking. Industry forecasts point to a modest pickup in US housing starts and repair and remodel activity in 2026 as interest rates ease and trade uncertainty recedes, supporting demand after a weak finish to 2025. At the same time, longer term supply growth remains constrained by ongoing tariffs on Canadian softwood and slower capacity expansion across North American sawmills, limiting surplus.
Lumber futures slid below $530 per thousand board feet, testing the lowest levels since October 2024, as weak near-term demand collided with abundant and re-emerging supply. Homebuilding activity remains subdued and mortgage borrowing costs are still elevated, restraining new starts and repair and remodel demand, while US housing starts have softened and 30-year mortgage rates entered January little changed near the mid-6% range. At the same time structural supply pressures are returning, with several panel and OSB mills ramping up or preparing to add capacity and shifts in North American output seeing Canadian curtailments largely offset by higher production in the US South, keeping physical availability ample and capping any upside. In the meantime, inventory and futures market activity increased over the holiday period, amplifying downside moves when buyers stayed sidelined after year-end and seasonal restocking remained muted. [END]
WASHINGTON — US single-family homebuilding rebounded in October, but permits for future construction eased, signaling caution among builders as new housing inventory remains high and demand soft. Single-family housing starts, which account for the bulk of homebuilding, increased 5.4% to a seasonally adjusted annual rate of 874,000 units in October, the Commerce Department’s Census Bureau said on Friday. Starts dropped to a pace of 829,000 units in September from a 869,000-unit pace in August. The reports were delayed by the 43-day government shutdown. …Permits for future single-family homebuilding fell 0.5% to a rate of 876,000 units in October. They increased to a pace of 880,000 units in September from a 858,000-unit rate in August.
Long-term mortgage rates have been declining since mid- 2025 and ended the year at their lowest level since September 2024. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.19% in December, 5 basis points (bps) lower than November. Meanwhile, the 15-year rate declined 3 bps to 5.48%. Compared to a year ago, the 30-year rate is lower by about half a percentage point, or 53 basis points (bps). The 15-year rate is also lower by 45 bps. …Falling lower mortgage rates have started to translate into gains as existing home sales edged up slightly in November. However, this increase remains limited as mortgage rates above 6% are still considered elevated. Nonetheless, as financing costs continue decline, more households are likely to reenter the housing market. …NAHB expects the 30-year mortgage rate to average 6.17% in 2026 and would reach 6% by 2027.
Toilet paper…is typically made with trees, energy-intensive manufacturing processes and chemicals that can pollute the environment. Experts say more consumers are seeking toilet paper made from recycled content or sustainable materials, but it can be hard to know what to look for. Sustainable toilet paper often costs more, but can have significant environmental benefits. According to the Environmental Paper Network, a coalition of nonprofits, more than 1 billion gallons of water and 1.6 million trees could be saved if every American used one roll of toilet paper made from recycled content instead of a roll made from forest fibres. Increasingly, manufacturers are making toilet paper from recycled paper products … using chlorine-free bleaching techniques. …Looking for recycled content is a good place for environmentally conscious consumers to start, said Gary Bull, at the University of British Columbia. Preconsumer materials include scrap materials from manufacturing or unsold paper. Postconsumer materials come from used paper products.
…Biophilia — a concept that’s been introduced in the pages of Health & Home before — is a term coined by the sociologist Erich Fromm and later adopted by biologist Edward O. Wilson in a 1984 book of the same name. Bill Browning, co-founder of the New York City-based sustainability consulting firm Terrapin Bright Green and chair of the Biophilic Institute, defines it as the “innate affiliation of humans to other living organisms and lifelike processes.” …Browning’s firm published a paper in 2022 titled “The Nature of Wood,” which distilled the available research on why people tend to gravitate to wood as a natural material. …Browning’s company has summarized some of biophilia’s high-level takeaways in a paper called “14 Patterns of Biophilic Design: Improving Health & Well-Being in the Built Environment.” In it, they outline how light, water, airflow and even a very primal sense of safety can positively affect cognitive performance as well as our mind-body relationship.
One year after wildfires tore through neighborhoods in Los Angeles County, killing at least 31 people and destroying more than 10,000 buildings, architects and developers are rethinking what home looks like in LA, and how resilient residential architecture evolves. …So far, hundreds of new homes have been submitted for permitting, but it’s a process shaping out to be an uneven one, based on damage, insurance and wealth. Affected homeowners are grappling with the details of fire-resilient construction and landscaping techniques, along with some more fundamental questions about what their communities should look like. …These 10 projects — all in various stages of completion — showcase several of the design concepts, construction techniques and development proposals in play as LA’s post-fire rebuilding process begins. …Many forthcoming home projects emphasize the latest in wildfire-resilience features: Think noncombustible sheathing and roof materials, triple-glazed windows that can resist high heat, and defensible outdoor space.
Bamboo tissue’s green image fades once you factor in coal-powered manufacturing. Bamboo tissue paper produced in China has become a popular option for shoppers looking to reduce their environmental impact. Despite its green reputation, new research suggests these products may not deliver the climate advantages many consumers expect. In some cases, bamboo tissue may even have a greater environmental footprint than tissue made in the United States. A recent 
Between the attention on forests at COP30, emerging regulations, and many corporate pledges, 2025 was slated to be the year that companies eliminate the practice within their supply chains of clearing forests and natural landscapes for production. As the calendar has turned to 2026, the truth is that we now know that dozens of the most at-risk companies have not reached that goal – but a few market leaders are proving that cleaning up supply chains is possible. Let’s be clear: Protecting forests makes economic sense. Industries depend on the benefits that natural ecosystems provide to grow food, transport goods, and manufacture products. Harming nature poses compounding financial risks to companies and their investors. …Growing awareness of the risks of biodiversity decline and the advantages of acting quickly have spurred private sector action in recent years, and we saw more positive developments unfold last year.
USDA on Monday published a notice in the Federal Register looking to update the reporting requirement for foreign land ownership under the Agricultural Foreign Investment Disclosure Act (AFIDA). …The proposed changes come as Congress and state lawmakers have demanded more updates and better reporting on foreign ownership from USDA, spurred mainly by Chinese ownership of agricultural land. …USDA’s latest report on foreign agricultural land holdings shows people from outside the country own nearly 45 million acres of land, as of the end of 2023. That takes up about 3.5% of all privately-held agricultural land. Foreign holdings also increased by more than 1.5 million acres from 2022. Nearly half of foreign land holdings, 48%, are forest land, with 29% being cropland and 21% pastures. Canadian investors make up about one-third of all foreign holdings, or 15.3 million acres, followed by the Netherlands, Italy, the United Kingdom and Germany.
PORTLAND, Ore. — In a win for conservation groups, a federal judge 
Western Washington forests are vital to the identity, economy, and quality of life vital to the region. From the Puget Sound to the Olympic Peninsula and Columbia Gorge, healthy forests provide clean air and water, sustain fish and wildlife habitat, store carbon, and support local jobs in forestry, recreation, and tourism. …The Western Washington Forest Health Strategic Plan is the result of an holistic and collaborative effort by the Washington State Department of Natural Resources to bring partners representing all lands and stakeholder groups together to identify priorities and strategies for how to steward and manage western Washington forests at a landscape scale. This plan builds on lessons learned from the development and implementation of the 
As climate change drives more frequent and severe wildfires across boreal forests in Alaska and northwestern Canada, scientists are asking a critical question: Will these ecosystems continue to store carbon or become a growing source of carbon emissions? New research published shows that when forests shift from coniferous—consisting mostly of pines, spruces and larches—to deciduous—consisting mostly of birches and aspens—they could release substantially less carbon when they burn. The study, led by researchers from the Center for Ecosystem Science and Society (ECOSS) at Northern Arizona University and published in Nature Climate Change, found that boreal forests dominated by deciduous species lose less than half as much carbon per unit area burned compared to historically dominant black spruce forests. Even under severe fire weather conditions, carbon losses in deciduous stands were consistently lower than those in conifer forests.
SEATTLE — Twenty-five years ago, I stood in a snowy National Arboretum in Washington, DC, shaking hands with President Bill Clinton at the signing ceremony for the most important forest conservation mandate in our country’s history. But now that landmark law, which went into effect on Jan. 12, 2001, is hanging by a thread, marked for repeal by the Trump administration — even though 99% of citizen input opposes the idea. The “Roadless Rule” was adopted to curtail harmful logging and industrial roadbuilding across 58 million undeveloped acres of our national forests. More than 2 million acres of those wild lands are in Washington, helping keep this the Evergreen State. …Trump officials claim that opening these areas to bulldozers and chain saws will protect communities from wildfire. But that’s a story that just doesn’t wash. [to access the full story a Seattle Times subscription is required]
VALLEJO, Calif. — The USDA Forest Service Pacific Southwest Region and CAL FIRE have renewed their commitment to battling wildfires across California. This renewal extends the California Fire Master Agreement for another five years. The agreement, signed by Pacific Southwest interim Regional Forester Jacque Buchanan and CAL FIRE Chief Joe Tyler on Dec. 12, allows for a cooperative approach to wildfire response. According to the USDA Forest Service, this collaboration enables firefighters to share resources and respond across jurisdictional lines during emergencies. “This complex operating environment within California and the challenges we face year-round require this collaborative approach,” Jaime Gamboa, fire director for the Forest Service’s Pacific Southwest Region, said. The agreement emphasizes a united front in wildfire emergencies, prioritizing the closest available resources to protect lives and property. It also covers hazardous fuels reduction and streamlines training and equipment sharing.
OREGON– The Bureau of Land Management’s state office in Oregon increased its timber sales in 2025, leading to one of its largest years for sales by board-feet and dollars in decades. The increase coincides with a provision of the tax and spending bill approved by Congress in July, that requires BLM to increase the timber it makes available for harvest by 20 million board-feet each year through 2034. BLM data show that the timber sales through the office totalled 290.6 million board-feet this year, an increase of 66.8 million from the previous year. …2025 was the third-highest year for BLM timber sales through the Oregon office by both board-feet and sale price, topped only by 2019 and 2021. Sales this year brought in $63.7 million.
DENVER — Vast swaths of the ponderosa pine forests that blanket Colorado’s Front Range mountains could turn rust-colored and die over the next five years as pine beetles begin to spread aggressively, new federal forecasts show. Aerial surveys conducted by the U.S. Forest Service over the last year found evidence of rapidly spreading beetle infestations along the mountains and foothills that stretch from southern Larimer County to southern El Paso County, including the western flank of metro Denver. Already, pockets of dead trees are visible from Interstate 70 and U.S. 285. The rapid uptick in beetle-killed trees near the state’s largest cities and major highways prompted state leaders to form a task force this month to grapple with the outbreak. Gov. Jared Polis 
President Donald Trump’s administration has set in motion efforts to repeal the Roadless Rule, a 2001 administrative mandate that put 45 million acres of the least developed forest land under protection from logging and construction of roads. As the nation observes the rule’s 25th anniversary, Virginia’s federal lawmakers and advocates are calling for its preservation and say hundreds of thousands of acres of forests could be at stake if it is axed. The federal government has framed the proposed repeal as necessary for forest management against wildfires. …Environmental advocates have said since last summer that repealing the rule will lead to land degradation, sediment pollution, and create risks to clean water sources. It would also open up large swaths of the 400,000 acres of the protected forestland in Virginia to logging and potential new roads.
STARKVILLE, Mississippi — For all the major investments and structural changes in 2025, marked by significant sawmill expansions, shifting market dynamics and continued pressure in the pulp and paper sector, Mississippi’s timber industry observed limited monetary change. The state’s total timber value for 2025 is estimated to be $1.47 billion, which is down 1% from last year. This year’s harvest amounted to 36.4 million tons of timber products, which is down slightly from last year based on timber severance tax receipts. The value of standing timber paid to landowners as stumpage was $660 million, a 9% decline from 2024. The harvest and trucking industries, however, added $807 million to timber’s value in 2025, which was 7% more than last year. Eric McConnell, associate professor of forest business, said the industry experienced a sizable increase in the small pine sawtimber. …The forestry industry also faced pulp and paper headwinds. 
When UN Spokesperson Stéphane Dujarric briefed correspondents in New York on Thursday following the release of the White House Memorandum, he insisted that the Organization will continue to carry out its mandates from Member States “with determination.” Wednesday’s memorandum states that the US administration is “ceasing participation in or funding to those entities to the extent permitted by law.” Several of the bodies listed in the memo are funded principally or partially by the regular UN budget, implying that voluntary funding will be impacted, although central funding will continue. However, the White House notes that its funding review of international organisations “remains ongoing,” and it is currently unclear what the impact of the announcement will be. Here’s a breakdown of the 31 UN entities mentioned in the memorandum, and how they are making a positive difference to people, communities and nations, worldwide.
Washington state officials admitted Jan. 6 they overstated by more than 80% how much projects funded by cap-and-trade taxes have reduced greenhouse gases. The Department of Commerce blamed data entry errors for inflating the benefits of eight grants that helped low- and moderate income households buy energy-efficient electric appliances. The state reported in November the eight grants will cut emissions by 7.5 million metric tons and accounted for 86% of all reductions over two years. The actual reduction was only 78,000 tons, according to Commerce. Commerce’s correction confirmed calculations by Washington Policy Center vice president for research Todd Myers. Earlier in the day, Myers posted online that 86% of the purported reductions were “probably fake.” …The Department of Ecology compiled and issued the faulty report. The report was a comprehensive accounting of how 37 state agencies and universities spent $1.5 billion in cap-and-trade taxes during the 2023-25 biennium, Ecology said.
A community-led survey coordinated by the Southern Environmental Law Center across parts of the southern United States has documented concerns about pollution linked to wood pellet manufacturing facilities. The survey focused on areas where residents live near large biomass plants, including a facility in Northampton County, North Carolina. Wood pellet plants process pellets that are exported overseas…where they are burned to generate electricity. While often described as a renewable energy source, the manufacturing process produces dust and emissions that residents say affect air quality and daily life. …[Survey] participants visited households near pellet plants to gather information about health concerns, environmental conditions and quality-of-life impacts associated with nearby industrial activity. According to the survey findings, residents reported respiratory problems, persistent dust, noise and increased industrial traffic. These concerns were most frequently recorded in rural communities and in areas with lower-than-average household incomes.
WISCONSIN — Hayward is the “first choice” for a German company considering building a $1.5 billion plant to convert wood and wood waste into sustainable aviation fuel, but the company also is talking to Minnesota, Michigan and other states, said Matthias Mueller, CEO of Synthec Fuels. …Hayward has good access to energy and to rail and highway transportation, it is not far from the Minneapolis and Chicago airports, and it is home to Synthec’s partner Johnson Timber, Mueller said. European investors have committed to providing $1.5 billion to build that plant, but Wisconsin lawmakers are working to make the state more attractive with the Forestry Revitalization Act that would provide $210 million in tax credits and loans. …The proposed plant annually would use 890,000 tons of woody biomass to produce 48 million gallons of sustainable aviation fuel. 