Quarterly Economic and Revenue Forecasts

UPDATED: June 25, 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 $394/mbf in December 2025. Since then, they have increased to high of $279/mbf in April 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 just above $610/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.

As discussed at the end of this forecast summary, there have been multiple policies at the federal level enacted or proposed that are likely affecting lumber and log prices. While policy uncertainty exists we expect there to be greater price uncertainty, particularly with lumber. Log prices are typically bounded on the low end because timberland owners can usually wait to harvest until prices get better, so we expect less movement in their prices.

Timber Sales Volume

The sales volume forecast for FY 26 is reduced by 96 mmbf to 404 mmbf.

Since FY 22 there have been a series of apparently one-off issues that substantially reduced the timber sales volumes for the fiscal year. Each of these has occurred at, or just after, the third quarter forecast.

FY 26 has followed a similar, but potentially more extreme pattern. In the beginning of the fiscal year, in June 2025, the forecast was left at 470 mmbf, noting that the pause on sales represented a significant risk — both on the upside and downside — to the sale volume. The forecast assumed that some number of these sales would be unpaused and released for sale. In the September auction, the sales volume forecast was increased substantially from 470 mmbf to 525 mmbf based on the updated decision around those paused sales. Our understanding at the time was that the restrictions around complex forests would allow for timber harvests close to the status quo in the future, and that FY 26 would be higher because some of the previously paused sales that were largely already prepared would add to the sales already in the pipeline.

In March 2026, the FY 26 forecast was reduced to 500 mmbf, in-line with most years, because some of the planned sales had fallen off - it was clear that they wouldn’t be prepared in time to bring them to auction in the fiscal year. Shortly after the forecast was finalized, a large number of sales fell off of the plan and were pushed out to later years for reasons that were similar to previous years.

In addition to the reduction in the FY 26 sales volume forecast, all outlying years are also 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, and our forecast assumption was that DNR would adjust to the new operating environment and return to that average. However, what appeared to be one-off downward revisions in sales volume are now a clear trend, and it appears that DNR’s capacity to deliver timber sales, given what has happened in FY 22 through FY 26, is now around 430 mmbf.

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 25 was much higher than in FY 24 — $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 assumption has not held up. As mentioned in the timber volume section, many of the sales that were unpaused have still not been brought to auction. Auction prices through the end of October 2025 were far lower than expected, and the forecast was reduced in the November 2025 to $360/mbf. In February, it was further reduced, back to $340/mbf. Not only have sales prices been following a decline in log prices, but they have been lower than the log price would suggest. This is likely due to a higher proportion of thinning sales and an increase in the volume of salvage sales from a blowdown event in the Northwest region.

The forecast sales price for FY 26 is further reduced to $310/mbf. Sales prices in FY 27 and 28 are also reduced, to $330/mbf and $340/mbf, respectively. The log price outlook through the end of 2026 is essentially flat, which will heavily influence FY 27 prices. Log prices are expected to increase slightly in 2027.

Outlying years’ prices are unchanged at the long-term average of $350/mbf.

Timber Removal Volume

Forecast harvest volume for FY 26 is reduced by 20 mmbf to 380 mmbf. This follows a reduction in February by 40 mmbf to 400 mmbf. Harvest volume in the first half of the fiscal year essentially collapsed. Through December, timber harvest was only 143 mmbf, 39 percent lower than the average of 233 mmbf through December. The new forecast is likely too high. After the forecast was finalized, the May harvest volumes became available, and they too are well below average.

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

  1. numerous market analyses report that most mills have full log yards and have 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.

Additionally, it appears that in Q1 2026 there was a broad based decrease in timber harvests in Washington, with preliminary estimates showing that even private harvests fell to their lowest levels since 2017.

Timber Removal Prices

Forecast timber removal prices for FY 26 increased slightly to $348/mbf. The price of harvests through December is around $320/mbf, but the value of timber under contract is relatively high, which should bring up the average as the year progresses.

The harvest price in FYs 27 and 28 are reduced due to the decreased forecast sales price.

Timber Revenue

The timber revenue forecast for FY 26 is decreased by five percent, or $7 million, to $1132 million. For outlying years the revenue is decreased slightly.

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 decreased. This is primarily driven by a decrease in revenue form commercial properties but has been offset by more revenue than expected from irrigated leases and mineral royalties.

  • Irrigated – Irrigated leases have generated $9.1m in revenue to date. Given that irrigated leases typically generate an additional $0.3m in revenue in the last months of the fiscal year, the forecast is increased to $9.4m for FY26. The revenue forecast for FY27 and onward have been increased to $9.1m, the updated rolling average value for this revenue source.

  • Commercial – Commercial revenue has seen a significant decrease relative to the previous fiscal year. Non-payment on select leases and unexpected repair costs have reduced the revenue expectations down to $9.5m for FY26. This is expected to recover to $10.7m in FY27 and then to $11.2 in FY28 as new lease agreements are developed.

  • Minerals and Hydrocarbons – The price of aggregate has been higher than usual, and is expected to result in approximately $0.3m more revenue than previously expected. Two of the largest mining contracts will phase out in FY28. Given how long it takes to develop a new mining contract, it appears unlikely that a new lease will be executed on time to keep mining revenue steady. In light of this, the forecast for FY28 and onward are decreased to $0.5m per year.

Aquatic Leases

The forecast for non water dependent rents is increased to $6.6 million for FY26. $6.6m is expected to be the new normal for this source, so forecasts for FY27 and onward are increased to this.

Geoduck

The geoduck revenue forecast is increased slightly in FYs 26 and 28, and substantially in FY 27, due to higher prices in recent auctions.

As of the previous forecast in February, only the December 2025 auction price was known, and while it was higher than expected, it wasn’t necessarily a clear signal that the price level of geoduck had increased. It had an average price of $8.93/lb, which was roughly in line with the December 2024 auction of $8.40/lb. Now, with the March and May auctions also having prices of $10.50/lb and $9.06/lb respectively, there is enough evidence to conclude that the price level of geoduck has indeed increased. This is likely due to the changes to the uncertainty surrounding tariffs.

From the beginning of 2023 to the third quarter of 2024 geoduck auctions had an average price of $11.60/lb, and, while there was still meaningful volatility, it stayed within a comparatively narrow range of $10.25/lb to $13.30/lb. That changed with the December 2024 auction, when prices dropped to $8.40/lb. At the time, it was unclear whether the cause of the price drop was arsenic issues on some tracts and/or the possibility of reciprocal tariffs with China. Washington’s geoduck industry is highly dependent on markets in China, so tariffs with China can have a major effect on the prices DNR receives2. Prices for the March 2025 auction were $8.60/lb, suggesting that there had indeed been a step change in the price level for geoduck. Prices for the June and September 2025 auctions, of $6.66 and $5.75, respectively, supported that hypothesis.

On October 30, 2025, a "truce" between the U.S. and China was announced, which would reduce some tariffs and halt any new tariffs. There was skepticism around whether the tariff truce will hold for the long term, but tariffs seem to have been relatively stable since then. Additionally, in February 2026, many of the tariffs were found illegal.

While it appears that tariff risks have waned, there is reporting that the U.S. presidential administration is planning on implementing new tariffs, using a separate legal justification3.

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 forecast revenue for the 2025-27 biennium is decreased by $29 million, or 6.4 percent, to $422 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 will likely help demand for lumber and logs.

Another relevant issue that will likely suppress log demand for the foreseeable future is the incident 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.

While uncertainties around the policy environment persist, these forecasts will continue to be made based on the most likely scenarios, with a bias toward the status quo where there is significant uncertainty.

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 Kansas4.

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. Although these haven’t seriously affected DNR timberland revenue since 2015, they 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 Sector5.

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

  2. https://apnews.com/article/geoducks-china-us-tariffs-economy-849c8052fd0e679fa421c48d32ed1bc7

  3. https://www.bloomberg.com/graphics/trump-tariffs-tracker/?srnd=phx-economics-v2

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

  5. 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

  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