UPDATE TO OUR PREDICTIONS OF THE HARDWOOD TIMBER MARKET IN 2025

What has tariffs, rain, and reduced demand done to the hardwood market? What do we think the third and fourth quarter will look like?

In January of this year we made our predictions on the hardwood market in our area of south central Kentucky.  We were so confident in the market going into 2025 that we sold some of our own timber in April.  A whole lot has happened since we published that article and it won’t surprise us if a lot more happens (sometimes weekly) in the final two quarters of the year.

Listed below are the things that occurred since my report.

1. Tariffs, lots of them, in all countries 

2. Rain, rain and more rain in our area

3. Wars and the recent bombing of Iran

4. GDP revised down by .5 percent

5. The closure of Brown Forman white oak stave cooperage mill

While most of these things do not jump out as potential issues to hardwood markets, the ripple effect can be surprising.  Below are some comments taken from the Hardwood Review from sawmills in the Appalachian region. Notice the progression in the responses throughout the months.

February 14, 2025

 A Kentucky mill said, “Log availability is terrible due to bad weather, but we’re not 

 exactly in a rush to get more.”

Producers in all three regions reported steady cant sales, and a Southern mill said ties and board road also continue to move well. However, the owner of another Southern sawmill specializing in crossties, crane mats, mixed hardwood lumber and pine said, “I decided to shut the mill down.  With log prices up and lumber prices down, I just couldn’t make the numbers work. Not sure yet whether this closure will be temporary or permanent.”

March 21,2025

“Poplar margins are still tight, just like before,” said one yard contact, “but we are getting more inquiries than we can fill. Kiln Dry moves as fast as it turns, and I could sell a million-and-a-half more board feet if I could get the green lumber.”

April 18, 2025

Market disruptions and industry adjustments are still unfolding, with some contacts reporting major changes and others very little yet. A Lake States sawmill and concentration yard contact said he hasn’t seen any major shifts in business since the tariffs; “It seems like business is still going. Hopefully that continues.” Another with a sizeable export business, however, said, “Many customers have cancelled or paused shipments. We are evaluating trends on a weekly basis. If more supply is offered domestically, it will have a deflationary effect.”

May 9, 2025

As one industry observer put it, “Current geopolitical uncertainty has promoted multi-faceted speculation and potentially volatile negative consequences, including the loss of market share in our largest global market and further loss of our hardwood production capacity.” Another said, “Nobody in our industry has seen anything like this. How do you decide what to do about timber purchases in this type of market.”

Jun 6, 2025

” Another seasoned industry observer noted, “Mills are unsure how to establish log prices based on current green lumber markets. They have to be simultaneously competitive and profitable to remain in business”.

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If you read these comments from the hardwood industry, you get a flavor of what they are up against in these times.  Things are changing very fast and we are seeing it in our sales.  As an example, we put our timber on the market before the tariffs were announced.  This created uncertainty for the sawmills about what they might receive for their lumber for the logs they are buying.  Our personal sale timber brought a good price, but we only had three bidders.  Also, the high bidder paid a good price, but the other two bids were much lower, and we would not have accepted them if they were the high bidders.  

I tell my clients, I am not as concerned with the number of bids we receive as I am at the quality of those bids.  Now, I would like all our sales to have as many bids as possible. But if all the bids are low, it doesn’t matter how many we received.  We just need one good one.  Right now, we are seeing fewer strong bids on our sales but just need to get that one good bid.

Despite all that has happened, I am pleased to say that lumber prices on balance are higher than they were one year ago.  I have attached lumber prices for the past year for white and red oak, yellow poplar, hard maple, hickory and walnut.  White oak lumber is only off its all time high by 15%.  Yellow Poplar has been strong all year.

So where does that leave us for the future?  I think better days are ahead as trade deals get finalized and confidence and certainty solidifies.  Single family homes are on the strongest pace in two years and unemployment has held steady at 4.2%. As of today, Congress just passed a bill that reduces taxes and regulations. Will this offset the spending within the bill? That question is for another website to write about.   

Kraig Moore,

Consultant Forester, ACF

7/1/2025