OUR PREDICTIONS FOR THE TIMBER MARKET IN 2025

It's hard to believe we are beginning our 32nd year in business.  When I began in 1993, timber markets were strong and the US consumption of hardwoods was significantly higher than today.  That may be surprising to hear, but unfortunately it is true.  

Overall, our 2024 timber sales did better than I expected.  We are fortunate in southcentral Kentucky to live in an area with strong demand from a large number of buyers compared to other parts of the state.  When we marketed good to excellent quality timber, our sales did excellent.  However, when we marked and sold average to low quality small diameter timber, we struggled but got them sold for a fair price.

Demand for hardwood lumber remains low, but it's balanced by the fact that mill closures continued throughout 2024.  Making money in the mill business is difficult.  Mill owners have shuttered their mills due to inflation, labor shortage, and some are just worn out.  These mill closures have helped keep existing mills productive.  

The low lumber demand and low number of hardwood sawmills could set the stage for an interesting 2025.  The Hardwood Review recently wrote, “Don’t be surprised by hardwood lumber shortages and higher prices in 2025”.  If demand increases, there simply will not be enough capacity to produce the lumber needed- and this will raise prices.  

The Hardwood Review goes on to say, “History suggests hardwood lumber shortages and price spikes are forthcoming in 2025.  Secondary manufacturers are optimistic about demand upticks and will be competing against one another-and with foreign buyers-for whatever lumber is available from an industry that has contracted to its smallest size in decades.  If sawmills remain cautious, however, and allow consumer demand to drive production decisions, we could see years of slow and steady hardwood lumber price recovery-well beyond the immediate surge that is likely early in the year to re-stocking”.

Just like the old adage that all politics is local, so are timber markets.  It's not uncommon for me to read positive or negative comments in the Hardwood Review only to talk to local sawmills and get the opposite take on the market.  One thing I can say from experience, the market has, and will always, pay well for good quality timber-so manage your timber for quality and you will be rewarded when you sell it. 

So, what am I personally seeing going into 2025?.  White Oak will remain strong at least until summer.  The other good news is we are seeing price gains for red oak.  This is great news.  If it keeps up, this will be great for forest landowners.  If you have white oak, you have red oak, and this will result in more money for you.  Red Oak has just languished over the last 10 or more years and now is making some gains.  At one time red oak was more valuable than white oak.

Yellow Poplar is also looking positive and we have plenty of it in south central Kentucky.  Black Walnut is still the most valuable species on average. Ash is the highest I have ever seen, and its days are increasingly numbered due to the emerald ash borer insect.  If you have ash, you have either lost it, or you are in the process of losing it.  Black Cherry is a dog, and hickory is soft unless it's large and straight for mat logs.  

The last product to mention is low grade material.  Low grade includes pallet material, tie logs, mat logs and pulpwood.  Low grade logs can account for 50% of a timber stand's volume.  With the exception of tie logs, the remaining low grade prices were depressed.  In some cases, the price received for pallet material did not cover the cost of logging.  That means the landowner got nothing for it.

To conclude, I have two wooded tracts that I plan to sell the timber on this year.  I have already begun the field work.  Is this the best market ever- no, but it's good enough for me and I look forward to a great 2025.      Check out our UPDATED prediction below.

Kraig Moore, ACF

1/24/2025