Donald Trump will find it “incredibly challenging for the US federal timber harvest to offset Canadian wood products in the coming years” without significant capacity, workforce and CapEx expansion. That is according to Austin Lamica from Fastmarkets, who said the United States would need to increase federal timber harvests by 450% to meet the shortfall in Canadian plywood, OSB, and softwood lumber, which make up vast volumes of timber used in single—and multi-family housing.
“Theoretically, the US federal lands have ample timber supplies to offset the volume of softwood lumber imported from Canada,” he said. But, “increasing federal timber harvests by (at least) 450% may be a challenge as many headwinds, aside from those related to lumber production capacity, may limit the government’s ability to ramp up timber production.”
Total harvest levels would need to reach a 45-year high.
In April, Wood Central reported that US Agriculture Secretary Brooke Rollins gave the US Forest Service “sweeping powers” to harvest timber in more than 112 million acres of National Forests across the US: “The US Forest Service (USFS) and Bureau of Land Management (BLM) hold 1,400 billion board feet (BBF) of net softwood sawn timber,” Lamica said. “On all federally owned forestlands, the USFS EVALIdator tool estimates 1,973 BBF of net softwood sawn timber volume nationwide. For comparison, private timberlands in the South and West hold 270 BBF and 211 BBF of softwood sawn timber.”
However, Lamica said the volumes include lands where timber harvesting is logistically or economically unfeasible: “These estimates reflect volumes without considering any regulatory or logistical constraints,” he said, before revealing that since the early 1980s, the USFS timber harvest levels have dropped significantly thanks to beefed-up environmental regulations, which coupled with the impacts of wildfire, and a declining workforce participation, make ramping up production extremely difficult.
“Historical data from the USFS report indicates that softwoods make up over 90% of total sawtimber harvest volume. Using these historical averages, we infer that USFS softwood sawtimber harvest volumes average 1.4 BBF annually,” Lamica said. And considering the average USFS softwood sawtimber harvest volumes, a 25% increase in harvest levels as targeted by Trump’s executive order would only increase the average annual harvest level by 0.35 BBF to 1.735 BBF per year.
“This increase falls dramatically short of the required US federal softwood sawtimber harvest levels to offset Canadian supply. Knowing how much additional harvest is needed to offset Canadian supply, Lamica said, who said that at the low end, an additional 7 BBF of softwood timber is needed to offset Canadian supply. “If strictly applied to USFS softwood sawtimber, total annual harvest levels would have to increase to over 8 BBF, which has not occurred since the 1980s.”
And if that seems extremely difficult, Lamica said annual logging employment in 2024 – 40,000 workers – dropped 24% from 2015 levels: “This decline underscores the challenges in acquiring workers needed to harvest timber and lower reliance on Canadian supplies. Additionally, the federal government has implemented job and budget cuts, aiming to improve efficiency across agencies. Reports suggest 10% of USFS staff were laid off, with more layoffs expected in the future,” Lamica said.
Why lumber capacity matters for housing capacity
In March, Wood Central reported that major curtailments to sawmills in the United States and across Canada had already reduced North America’s softwood lumber capacity by 3.1 billion board feet. To make up for the shortfall, the powerful National Association of Home Builders (NAHB) said that cutting tariffs on Canadian lumber, boosting local production, and cutting exports of hardwoods and softwoods to China were key to managing building costs.
“In addition to the narrowly defined framing lumber, products such as plywood, OSB, particleboard, fibreboard, shakes, and shingles make up a considerable portion of the total material cost of a new home,” according to the NAHB’s latest report on Framing Lumber prices: “Surveys conducted by Home Innovation Research Labs show that the average single-family home uses 2,200 square feet of softwood plywood and 6,800 square feet of OSB, in addition to roughly 15,000 board feet of framing lumber.“
Then, there are inputs into cabinets, windows, doors, and trusses: “To account for the manufacturer’s margins, sawmill prices for the lumber embodied in these products are marked up by the percentage difference between receipts and cost of goods in the “wood product manufacturing” industry,” the NAHB said. “The bottom line is that changes in softwood lumber directly impact the price of a new home. This, along with the rising wages for construction workers and higher interest rates, is one of the reasons why the housing market is experiencing declining affordability.”
- To read more about the impact of building materials on the cost of a new home, click here for Wood Central’s special feature from last month.
