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.
A central pillar of US President Trump’s protectionist trade policy could be struck down early in the new year, but lawyers and trade experts expect the President to rapidly reconstruct his tariff regime using other legal tools while questions remain about whether companies will be able to secure refunds. …A negative decision would be an indictment of the haphazard way Trump has pushed through his protectionist agenda over the past year, and would create a headache for the US government, which has collected more than US$130-billion in tariff revenue using IEEPA that may need to be refunded. …Dozens of companies have already filed lawsuits in the US Court of International Trade to try to protect their right to a refund or position themselves at the front of the line for one. Canada has less of a stake in the Supreme Court case than some other countries. [to access the full story a Globe & Mail subscription is required]
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 
Prime Minister Mark Carney said Canada probably won’t reach a near-term deal with the United States to lower tariffs on sectors such as steel and aluminum, and negotiations are likely to be rolled into next year’s review of the US-Mexico-Canada Agreement. Canada and the US were close to a pact on metals tariffs, but President Donald Trump then terminated talks in October. …“My judgment is that that is now going to roll into the broader CUSMA negotiation, so we’re unlikely, given the time horizons coming together, to have a sectoral agreement,” Carney said on Thursday. “Although if the United States wants to come back on that in those areas, we’re always ready there — we’re very ready.” …Canada is “very ready on forest products to strike an agreement,” the prime minister added. The U.S. has placed roughly 45% duties and taxes on imports of Canadian softwood lumber, to the frustration of US homebuilders.
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, 
The Court of International Trade on Dec. 18 again 
Maine timber companies are in line to receive substantial incentives to manage forests and grow healthier, more valuable trees. A $32 million award to the New England Forestry Foundation was recently finalized by the US Department of Agriculture. The funding package, through the Advancing Markets for Producers initiative, replaces similar funding provided under the “climate smart commodities” program. While there are some adjustments to the program, it achieves the same purpose, according to the foundation Deputy Director Andi Colnes. The grant will largely subsidize commercial and pre-commercial thinning, Colnes said. It will also provide funding to expand market opportunities, particularly for mass timber construction, she added. …According to Colnes, the program is able to cover about 50,000 acres of New England forests, mostly commercial timberland in Maine. The foundation said 23 commercial, conservation and public forest owners are already enrolled in the project.
NORTH CAROLINA — After reviewing public comments, the 
President Trump’s tariff and trade policies dominated the world’s political discourse through 2025. …The good news is that the BC economy has been fairly resilient through 2025. …BC trade resilience can also be attributed to a broader export commodity mix, dominated by forestry, agricultural and seafood products, as well as mining and oil and gas. …Forest products were tagged with a sectoral tariff of 10 per cent in October 2025, on top of new anti-dumping and countervailing tariffs on softwood lumber. …This has put tremendous pressure on an industry. …It’s difficult to disentangle the impact of tariffs from overall adverse trends in the BC forest industry, many mill closures and curtailments in recent years. BC forestry exports are among the most exposed to the US market, with about 75% of forestry exports headed south. Exports of softwood lumber were down 26% in August 2025 compared to August 2024. Pulp and paper exports were also down 9% on a year-to-date basis compared to 2024.
The Softwood Lumber Board has released its Q3 2025 Report, highlighting significant progress tied to its new strategic plan. This quarter, SLB-funded programs advanced a coordinated strategy centered on high-opportunity sectors—1-8 story multifamily, commercial, K-12 education, and the fast-growing industrial segment—while accelerating project conversions, strengthening building code support, scaling post-secondary education, and expanding outreach in key cities.
Schools built with mass timber have recently opened to positive community response in the Seattle, Renton and Highline school districts, and another is under construction in West Seattle. … Throughout the United States and Canada, about 150 educational projects have already been built with mass timber. Mass timber products such as Glulam and Cross-Laminated Timber are made from lumber stacked in layers to create large components — columns, beams and panels that become the structures of buildings of all types. These large building components drive efficiency in construction while reducing the carbon footprint. In Washington, mass timber can now be used in buildings up to 18 stories, a renewable, resilient alternative to steel and concrete. The Pacific Northwest is well-positioned to be a leader in this industry. …structures made from mass timber, where the wood remains exposed, have 
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.
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 
Wildfires are not always purely destructive. In many forests, fire can clear out built up dead material, return nutrients to the soil, and help ecosystems reset. For more than 100 years, the United States has spent billions of dollars on fire suppression to protect people, homes, and sensitive environments. But putting out too many fires can also prevent landscapes from getting the burns they need, allowing extra fuel to accumulate and raising the risk of larger fires later. New research … reports that nearly 38 million hectares of land in the western United States are historically behind on burning. The researchers describe these areas as being in a “fire deficit.” …”Conditions are getting so warm and dry that it’s causing huge amounts of fire compared to the historical record,” said Winslow Hansen, director of the Western Fire and Forest Resilience Collaborative and scientist at Cary Institute of Ecosystem Studies. 
Cutting red tape and streamlining project work have been marching orders for the U.S. Forest Service throughout the first year of the second Trump administration. Last week, a federal court ruling on a Greater Yellowstone landscape project showed how far those directives can backfire. …Initially proposed in 2020, it received a decision notice in 2023. Opponents referred to it by its acronym, SPLAT, and promptly sued to block it. In his December 11 opinion, U.S. District Judge Donald Molloy wrote that South Plateau failed to meet requirements of the National Environmental Policy Act, National Forest Management Act and Endangered Species Act. But he added the “primary challenge concerns the project’s conditions-based management approach.” Molloy generally agreed with the plaintiffs’ concern. “This approach,” he said, “conflates a promise of future statutory compliance with actual compliance.”
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. 
FLORIDA – Florida state officials warned of heightened wildfire risks across the state as dry conditions were expected to continue into 2026. “I’ve been with the agency a long time, and this is the driest winter that I can remember in quite a while,” Florida Forest Service Director Rick Dolan said during a Friday press conference. The number of wildfires had increased significantly, with more than 3,000 reported in 2025 compared to approximately 2,000 in 2024. This surge came months before Florida’s typical peak wildfire season, which usually occurs between April and June. Florida Commissioner of Agriculture Wilton Simpson emphasized that human activity was a major concern. “The majority of those fires are started by backyard fires, arson, things of that nature,” Simpson said. “We need everyone to be diligent as we come into the new year with the drier conditions.”
Weyerhaeuser, America’s largest private landowner, said it has launched a venture to turn runty trees and sawdust from its fleet of mills into a replacement for metallurgical coal used in steel making. The forest-products company said it expects production to begin in 2027 at a facility being built next to its sawmill in McComb, Mississippi—the first of several biocarbon plants planned by Weyerhaeuser and partner Aymium. It is the latest effort to find a market for the trees too small or otherwise unsuitable for making lumber. Such wood has typically been sent to pulp and paper mills, but U.S. wood-pulp consumption capacity has plunged due to waning paper demand. …Stockfish said he envisions the venture with Aymium operating as many as 10 or 11 biocarbon production facilities across Weyerhaeuser’s U.S. properties. …Aymium CEO James Mennell said the company’s process works with all species of wood as well as agricultural residues. [to access the full story a WSJ subscription is required]
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.