Quarterly Economic and Revenue Forecasts

UPDATED: September 14, 2026

This quarterly forecast includes our analysis of current economic conditions and our objective projections of future revenue for state trust funds and their beneficiaries.

For Economic and Revenue Forecasts from 2013 and prior years, contact the Office of Budget and Economics by phone at 360-902-1730 or by email at obe@dnr.wa.gov.

Forecast Summary

Lumber and Log Prices

Between the beginning of 2023 and January 2025, lumber prices remained relatively stable and lower than the prior years, staying in between $370/mbf and $490/mbf (with one exception in December 2024, when it jumped above $500/mbf), with an average of $436/mbf1. However, in March and April 2025, they increased substantially, to around $580/mbf, before trending downward. Prices appear to have hit a short-term nadir at $398/mbf in December 2025. Since then, they have increased to high of $575/mbf in July 2026.

Log prices generally follow the same trend as lumber prices, but the relationship is not one-to-one. From the beginning of 2023 to August 2025, log prices remained in a relatively narrow range - from around $610/mbf to $660/mbf. From September through December 2025, prices fell below that to average $599/mbf, but have returned to the $610/mbf to $660/mbf since January. This is still higher than most periods in the last 20 years in nominal terms, though not in real terms.

The outlook for both log and lumber prices is that they will remain relatively flat for the remainder of 2026, but may start moving upward in 2027.

Timber Sales Volume

The sales volume forecast is unchanged in all forecast years.

In the June Forecast, all outlying years were reduced to reflect what appears to be the new operational reality. DNR offers sales roughly at its capacity — as soon as sales are prepared, they are offered for sale. Prior to 2022, that capacity averaged 500 mmbf. However, What appeared to be one-off downward revisions in sales volumes in each of the fiscal years since 2022 are now a clear trend, and it appears that DNR’s capacity to deliver timber sales is now around 430 mmbf.

An upside risk to this volume forecast is that fire salvage could increase substantially, due to the large wildfires this year. It is almost certain that fire salvage will make up a larger-than-normal portion of sales on the east side of the state. However, it is unclear if these will increase the overall sales volume, or it will just offset other sales.

Timber Sales Prices

DNR auctions timber primarily as stumpage — the right to harvest the standing timber. The difference between the delivered log price and DNR’s stumpage price can be thought of as equivalent to the sum of logging costs, hauling costs, and harvest profit. This can be used to forecast DNR’s stumpage prices, based on expected log prices. In FYs 24 and 25, this technique provided a poor forecast. While the average price of logs in both years was accurately forecast to be relatively consistent, the average price of timber sales in FY 24 was much lower than in FY 25 — $346/mbf compared to $408/mbf, respectively. This was likely because a number of sales that had been delayed in FY 24, but then sold in FY 25, were higher value sales with older, larger timber on them.

Initially, the FY 26 forecast was held at $340/mbf to build in the risk that the relatively high FY 25 prices would not hold up - especially in the face of a challenging domestic demand environment and uncertain policy environment. However, in September 2025, the FY 26 sales price forecast was increased to $370/mbf. This was because a raft of higher value sales that been paused at the beginning of 2025 were approved for sale. Essentially, it was expected that this would mirror what happened in late 2024, when delayed sales were approved by the board and sold for very high prices from November 2024 through January 2025.

This expectation did not hold up. Many of the unpaused have still not been brought to auction and even sales that were not part of the unpaused group had lower prices than expected. The average sales price for the year was $300/mbf.

The forecast prices are unchanged for all years. Forecast sales prices in FY 27 and 28 are held at $330/mbf and $340/mbf, respectively. Outlying years’ prices are unchanged at the long-term average of $350/mbf.

While the FY 27 sales forecast is low compared to the average, it may still be too high, as it faces several downside risks. First, mortgage rates are again increasing, which tends to suppress house prices and undermine new construction. Second, an increase in the relative amount of fire salvage will tend to suppress the average price, though it is not guaranteed and depends on the amount of the fire salvage, the damage to the trees and the quality of the trees would have otherwise been sold.

Timber Removal Volume

Harvest volume in FY 26 was extraordinarily low at 385 mmbf. This is the lowest harvest in our readily available records, which go back to 2004.

The extremely low harvests are likely due to a number of things:

  1. ready availability of private timber and mills with full log yards and substantially slowed log buying;

  2. heavy rainfall in late in 2025 impaired harvest operations; and

  3. the average price of stumpage under contract is relatively high compared to current log prices, so it may not be profitable to harvest right now.

The removal volume forecast for all years is unchanged after the substantial reductions in the June forecast.

Timber Removal Prices

Timber removal prices for FY 26 were slightly higher than expected at $352/mbf. Removal prices in FY 27s and 28 are increased slightly.

Timber Revenue

The timber revenue forecast in increased slightly in FYs 27 and 28.

Non-Timber Uplands Revenues

In addition to revenue from timber removals on state-managed lands, DNR generates sizable revenues from managing leases on other uplands. The overall forecast for non-timber uplands revenue is increased in FY 27 and decreased slightly in outlying years. This is primarily driven by a decrease in revenue form commercial properties, and a minor timing issue where some expected revenue for FY26 has been pushed into FY27.

  • Irrigated – A small adjustment was made to account for a few invoices that were expected in FY26 that were pushed in early FY27. This is a technical fiscal year cutoff issue.

  • Dryland – Similar to Irrigated, an adjustment was made to account for approximately $1.5m in cash on account in FY26 that will accrue in FY27. This is a technical fiscal year cutoff issue and is not a structural change to the expected dryland revenue.

  • Commercial – Commercial revenue was lower than expected. Non-payment on select leases and repair costs reduced revenue for FY26. This is expected to partially recover in FY27, and fully recover by FY28 as new lease agreements are developed.

Aquatic Leases

The forecast for aquatic leases are unchanged relative to the previous forecast. All leases are expected to escalate on track.

Geoduck

The geoduck revenue forecast is decreased in FY 27 by 11 percent, and increased in FY 28 by six percent.

Paralytic shellfish poison limited harvest on several tracts sold in the March 2026 auction, so the aquatics program held an additional auction in mid-July. The July auction offset most of the pounds lost from the March auction and actually had a higher price. This drove an increase in the price forecast which would have increased the revenue forecast for both FYs 27 and 28. However, we also updated the auction pounds for the September and December auctions, which were lower than we have previously forecast. On net, this resulted in the decrease in the FY 27 revenue forecast and an increase in FY 28.

Since the tariff truce between the U.S. and China in October 2025, geoduck prices have returned to their pre-2025 levels and appear to be relatively stable. We are no longer forecasting lower prices due to tariffs, thought they remain a risk. Aside from tariffs, the geoduck market still faces a number of risks that can cause prices to vary wildly. In addition to what is discussed above, these include

  • paralytic shellfish poison closures

  • tracts testing positive for high arsenic

  • weather issues - such as sewage contamination from flooding run-off

Total Revenues

The total forecast revenue for the 2025-27 biennium is increased by $5 million, or 1.2 percent, to $427 million.

Notes on the Forecast

2025 saw a flurry of policy announcements, amendments, pauses, retractions, and reimpositions from the presidential administration, as well as injunctions from the judiciary, that have increased uncertainty across the economy as a whole as well as in the natural resources markets that DNR operates. Because things were changing so rapidly, it was difficult to parse which policy changes would actually affect DNR revenue. The most relevant policy changes were largely around tariffs and increased deportations of undocumented immigrants, but also included orders to increase harvests from USFS land.

Aside from the effects on geoduck bid prices, it is difficult to point to specific effects these policies had on DNR revenue, other than they have likely suppressed timber prices. The overturning of most of the tariffs in February and a slow-down in deportations in construction industries may help demand for lumber and logs.

Another economy-wide issue that may undermine lumber and log demand is a recent increase in mortgage rates. Residential construction and renovations and remodelling typically account for around 70 percent of domestic wood fiber demand. High mortgage rates will tend to suppress purchases and undermine construction.

A more local issue that will likely suppress log demand for the foreseeable future is the May 2026 explosion of a chemical tank at the Nippon Dynawave Packaging facility in Longview. The Nippon facility was a substantial buyer of residues in the region. Without that facility it is likely that wood processors will slow down production because they don’t have a place to send their residuals.

Finally, climate change is a meaningful short- and long-term risk — as opposed to an amorphous risk in the far future — as previously rare extreme weather events become more common. In 2021, drought in Washington decreased wheat production on DNR lands by about 40 percent. In September and October 2021, extraordinary rainfall in British Columbia destroyed roads and railways, essentially halting timber harvests, lumber production, and timber exports through the Port of Vancouver. And in mid-June 2022, there was concurrently: massive flooding in Montana and Wyoming, thunderstorms that took out power-grids in the Great Lakes, and a record setting heat-wave that killed over 2,000 cattle in Kansas2.

Climate change will increasingly affect Washington’s fire seasons — drought and rising temperatures dry out fuels fast, leaving conditions ripe for wildfires to begin earlier in the year, burn longer, and spread more unpredictably than in the past. Wildfires pose a significant risk to both our short-term timber revenue forecast — potentially destroying standing timber under contract — and long-term revenue by destroying younger stands that would be harvested in future decades. Research suggests that the massive fires in Oregon around Labor Day 2020 caused not only immediate damage, but will reduce future Oregon harvests by 115 to 365 mmbf per year for the next 40 years. That, with the more immediate damage from the fires, suggests an overall economic impact of $5.9 billion on Oregon’s Forest Sector3.

  1. The prices used here are for West Coast standard or better 2x4 Douglas-fir/Hemlock boards.

  2. https://www.washingtonpost.com/climate-environment/2022/06/16/summer-climate-disasters/

  3. 2020 Labor Day Fires: Economic Impacts to Oregon's Forest Sector, Oregon Forest Resources Institute 

 

Fiscal Year 2027

September 2026 | November 2026 | March 2027 | June 2027

 

Fiscal Year 2026

September 2025 | November 2025 | March 2026 | June 2026

 

Fiscal Year 2025

September 2024 | November 2024 | March 2025 | June 2025

 

Fiscal Year 2024

September 2023 | November 2023 | February 2024 | June 2024

 

Fiscal Year 2023

September 2022 | November 2022 | February 2023 | June 2023

 

Fiscal Year 2022

September 2021 | November 2021 | February 2022 | June 2022

 

Fiscal Year 2021

September 2020 | November 2020 | February 2021 | June 2021

 

Fiscal Year 2020

September 2019 | November 2019 | February 2020 | June 2020*

*Not completed due to COVID-19 pandemic.

Fiscal Year 2019

September 2018 | November 2018 | February 2019 | June 2019

 

Fiscal Year 2018

September 2017 | November 2017 | February 2018 | June 2018

 

Fiscal year 2017

September 2016 | November 2016 | February 2017 | June 2017

 

Fiscal Year 2016

September 2015 | November 2015 | February 2016 | June 2016

 

Fiscal Year 2015

September 2014 | November 2014 | March 2015 | June 2015

 

Fiscal Year 2014

September 2013 | November 2013 | February 2014 | June 2014

 

Office of Budget & Economics

1111 Washington St. SE

MS 47001

Olympia, WA 98504-7001

360-902-1730

Fax 360-902-1775

obe@dnr.wa.gov

 

Footnotes:

  1. https://www.washingtonpost.com/climate-environment/2022/06/16/summer-climate-disasters/

  2. 2020 Labor Day Fires: Economic Impacts to Oregon's Forest Sector, Oregon Forest Resources Institute