ERA Forest Products Research’s John Cooney opened day two of the Global Wood Summit in Vancouver by introducing Alejandra Glazebrook of PwC Canada, who provided an overview of global trends in forest sector profitability. Cooney followed with a detailed report on the North American lumber market and then moderated a Q&A panel with Ken Shields (Conifex Timber), Stefan Lyren (Olympic Industries), John Bal (Interfor) and Dean Garofano (Delta Forest Group). In addition to weak lumber prices—economic fibre shortages, softwood lumber duties, residual offtake challenges and lingering labour constraints—were noted as causing headaches for producers. Over 3 billion board feet of sawmill capacity closures were announced across North America in 2024, after about 2 billion board feet between 2022 and 2023. And sawmill closures are no longer just a BC phenomenon with over 1.2 billion board feet of curtailments in the historically “lower cost” US South to date in 2024.
Looking forward, Cooney and the panel expect an improving lumber market due to stronger demand and softwood duty increases which will hurt cash flows. Key takeaways include:
- How much lumber demand improves in 2025 will depend on the trajectory of US Fed rate cuts
- Following a raft of North American mill closures between ’22 and ’24, lumber supply constraints will become more evident
- Lumber supply from Canada and the U.S. West is effectively tapped out in the near-term
- The U.S. South is now the lone growth engine in terms of domestic supply
- European imports may also fill a gap, but rising costs make export economics more difficult for Europeans.
Cooney estimates lumber demand in 2025 to increase about 1.5 billion board feet and given supply constraints, that 2×4 prices will rise about 20% to $490 for SPF and $465 for SYP. Interestingly, in an online poll of the room delegates, two-thirds agreed with Cooney’s estimates or think prices will be even higher. More on the Global Wood Summit in tomorrow’s Tree Frog News, including comments by the US Lumber Coalition’s Zoltan van Heyningen.
The long awaited Global Wood Summit kicked-off in Vancouver yesterday with a detailed overview of global log and lumber trends by forest market analyst and conference co-host Russ Taylor. With due notice that “forecasters are almost always wrong”, Taylor described the long list of current and expected “fibre supply disruptors”, (including the war in Ukraine and in the Middle East), and the many negative policy initiatives, (such as the EU Deforestation Regulation and new logging restrictions in BC and Oregon), that are exacerbating the availability and supply of low-cost softwood logs world wide. Within North America, potential growth in log and lumber supply is limited to the US South, and other than beetle and wildfire killed logs in select regions, there are few other new sources of wood, said Taylor.


VANCOUVER —
The US economy seems to have pulled off a remarkable and historic achievement. Gross domestic product expanded at an annualized rate of 2.8% in the third quarter, the Commerce Department said Wednesday. That’s a slightly weaker pace than the second quarter’s 3% rate and above the 2.6% rate economists projected. As the US economy continued to expand from July through September, inflation drifted lower toward the Federal Reserve’s 2% target during that same period, the report showed. Several economists tell CNN that the economy has finally pulled off an exceptionally rare achievement known as a soft landing, a scenario in which inflation is tamed without a recession. …Meanwhile, businesses continued to invest during the July-through-September period, though at a slightly softer pace than earlier in the year. Government spending at both the federal and state level also contributed to third-quarter economic growth.


This months SLB update includes these headlines and more:
WASHINGTON — The U.S. Department of Agriculture’s Forest Service announced it is making up to $34 million in funding available to support innovation and jobs in the forestry sector while supporting healthy forest landscapes. The agency is seeking proposals that will spark innovation, create new markets for sustainable wood products and renewable wood energy, and expand processing capacity. The funding, made possible by President Biden’s Bipartisan Infrastructure Law and Inflation Reduction Act, is available through the Forest Service’s three key grant programs to support the forest products economy: Wood Innovations Grant, Community Wood Grant, and Wood Products Infrastructure Assistance Grant Programs. …The agency is seeking proposals that support innovative uses of sustainably sourced wood in construction, as a renewable energy source, and in manufactured and processed products.
Today, the U.S. Department of Agriculture’s (USDA) Forest Service announced an investment of more than $265 million to conserve nearly 335,000 acres of ecologically and economically significant forestlands across the nation, in partnership with states across the country, thanks to funding from President Biden’s Inflation Reduction Act. The Forest Service will fund 21 projects in 17 states to conserve working forests that support rural economies. In 2024 alone, the Forest Service has invested nearly $420 million to conserve more than 500,000 acres through the
Texas forests were still relatively pristine and ancient as late as 1870, with centuries-old trees towering as high as 150 feet. But then came the “bonanza era” of widespread deforestation. By 1907, Texas became the third largest lumber producer in the United States, making lumber barons such as John Henry Kirby incredibly wealthy. In 1936 President Franklin Roosevelt established Texas’ four national forests — Sam Houston, Davy Crockett, Angelina and Sabine — in East Texas. By then, little remained of Texas’ once-mighty forests. The relentless exploitation devastated ecosystems and diminished biodiversity, leaving behind fragmented landscapes that can’t sustain the wildlife species who make their habitat in Texas forests. …And decades later, though the Forest Service says there are no old-growth forests in the national forests of Texas, we now have 400,000 acres of mature forests. …But logging of older trees continues in our national forests. [to access the full story a Houston Chronicle subscription is required]
Hurricanes are among the most destructive forces found in nature, capable of causing extensive environmental damage — a factor that can raise the risk of wildfires, according to Robert Scheller, a NC State professor of forestry and environmental resources. “When a hurricane makes landfall, the strong winds and heavy rain can topple trees, leaving behind needles, leaves and branches that can act as fuels for wildfires,” said Scheller. Scheller said pine trees pose a higher wildfire risk than other species, because the needles contain higher concentrations of flammable resins that easily ignite when exposed to a heat source, allowing the pine needles to quickly catch fire and burn rapidly, especially in dry conditions. They also decompose slowly due to a waxy coating that makes it difficult for bacteria and fungi to break them down. As a result, the needles typically remain on the ground longer compared to other foliage.
The National Wood Flooring Association (NWFA) signed a memorandum of agreement (MOA) with the United States Forest Service (USFS) to support the creation of a publicly accessible platform to provide transparent, high-integrity forest and wood product carbon data. The platform will include six measurement, monitoring, reporting, and verification tools that align with a USFS objective to serve as the primary source of information on carbon and carbon flows across U.S. forest lands, harvested wood products, and end-use life cycle assessment. Currently, forest and wood product data exist in disparate sources. Connections and improvements are necessary to produce standardized data and approaches for quantifying forest-sector greenhouse gas flux for entities across the value chain… USDA has committed $4 million in funding, with $1 million provided by the U.S. Endowment.