Quarterly Economic and Revenue Forecasts
UPDATED: October 1, 2025
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, they increased substantially, to around $580/mbf. Through July, prices have fallen back to around $500/mbf.
Log prices generally follow the same trend as lumber prices, but the relationship is not one-to-one. Since the beginning of 2023, log prices have remained in a relatively narrow range - from around $610/mbf to $660/mbf. This is 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, on balance, that they will dip lower through the end of 2025 before increasing slightly in 2026. Overall, prices generally expected to stay within the range we’ve seen since 2023.
As discussed at the end of this forecast summary, there have been multiple policies enacted or proposed that may meaningful affect lumber and log prices. While the 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 actual FY 25 timber sales volume was 444 mmbf (including both Westside and Eastside sales).
The sales volume forecast from FY 26 is increased from 470 mmbf to 525 mmbf, due to updated policy around timber sales containing complex forests. Our understanding is that the policy around the complex forests will allow for timber harvests somewhere close to the status quo for the next decade, while alternative revenue streams are explored. Therefore, in outlying years through the end of the forecast period, forecast sales volume reverts to the long term mean.
Timber Sales Prices
The average price of timber sales in FYs 25 was $408/mbf. This was higher than forecast at the beginning of year, when expectations were relatively low because of the FY 24 average price.
Throughout the year the forecast was increased due to the very high prices from sales from February 2025 through May 2025. The sales in those four months had, overall, much higher prices than we had expected — averaging over $400/mbf. In the previous forecast, we noted that sales from November 2024 through January 2025 had very high prices because they had a substantial amount of high value timber. The expectation was that because the sales weren’t so heavy to high value timber, the average sales prices would be much lower. This was not the case.
The FY 26 sales price forecast is increased to $370/mbf from $340/mbf. There are two reasons for this increase. First, the previous price forecast was based on the assumption that product mix of sales would not include much, if any, of the sales with some amount of structurally complex forest. These sales often have older and more valuable wood, so their exclusion or limitation would reduce the average price for the year.
The second reason is that the previous forecast was based on an assumption of a lower average price in the first half of 2025. Lower average auction prices would give us a good indication that reported weakness in the timber market was pulling down market prices. Although we expect prices to soften in the second half of 2025, they are starting from a higher price than we had expected.
Outlying years’ prices are unchanged at the long-term average of $350/mbf.
Timber Removal Volume and Prices
Forecast harvest volume is unchanged for all forecast years.
While this may seem to conflict with the increase in forecast sales volume, the previous sales volume forecasts were somewhat higher than the model that we now use. We previously didn’t drop the future harvests to the model predictions, because there was still policy uncertainty around the pause on structurally complex forests. With the increase in the forecast sales volume, the current removal volume forecast is now much closer to the model prediction.
The primary risk to the removal volume forecast in FY 26 is likely the probable change in forest practices rules around harvests in riparian zones. If or when this change happens, it will incentivize private timber owners to harvest timber under the current rule before the rule changes, which would offset harvest from DNR managed lands.
Forecast timber removal prices are increased due to the increase sales prices from FYs 25 and 26.
Timber Revenue
The timber revenue forecast is increased moderately in FY 26 through FY 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 relatively unchanged and much of the underpinning logic of the previous value continues to hold. The only change to Non-Timber Uplands Revenue forecast is a slight increase of $0.1 million in the category starting in FY26 that reflects a new Right-Of-Way contract. There are some potentially large changes on the horizon for Orchard/Vineyard leases, but there is not enough information at the moment to quantify the magnitude or timing of how revenues will change. So we are holding the forecast steady until more information becomes available.
Aquatic Revenues
The forecast for Non-water dependent rents is increased from $5.4 million to $6.0 million for FY26 and onward. This reflects the overall increase in lease revenue generated in this category that is expected to continue going forward. There is also a small increase of $0.1 million for both Easement Rents and Other Rents for FY26.
The geoduck revenue for FY 24 is notably higher than the surrounding years because bonus bid revenue that had been expected in FY 23 was shifted into FY 24.
Geoduck revenue for this forecast is decreased substantially in FYs 26-28.
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 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. 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 auctions, of $6.66 and $5.75, respectively, cemented the idea.
Washington’s geoduck industry is highly dependent on markets in China2. So, tariffs with China — both the actual tariff levels and the uncertainty around even short term tariffs — and repeated issues with arsenic are now taken as regular market conditions that suppress prices from their previous levels. These are discussed in more depth in the forecast report.
The geoduck price model has been updated based on the assumption that the added uncertainty from tariffs would continue until mid-2026, that is, the whole of FY 26, and would have some residual effects through the end of calendar year 2027.
Aside from tariffs, the geoduck market 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
-
China’s economic performance overall
Total Revenues
The forecast revenue for the 2025-27 biennium is increased slightly to $490 million.
Other notes to the Forecast
The first half of 2025 has seen a flurry of policy announcements, amendments, pauses, retractions, and reimpositions from the new presidential administration, as well as injunctions from the judiciary, that have increased uncertainty in the natural resources markets that DNR operates. Because things have been changing so rapidly, it has sometimes been difficult to parse which policy changes will actually affect DNR revenue.
It is unclear if and when these policy changes will stabilize. However, as noted in the geoduck discussion, the assumption for this forecast is that tariffs uncertainty will remain until mid-2026 and there will be residual effects after that. For revenue sources other than geoduck, we have not built in any effects of the tariffs, because not only are the tariff levels uncertain, but their ultimate effects are uncertain. For instance, tariff’s on Canadian lumber could decrease supply, increasing lumber prices in the U.S. and leading to timber price increases. However, at the same time reciprocal tariffs are being placed by other countries on U.S. timber and lumber, decreasing export demand and leaving more for the domestic market — decreasing prices.
Aside from the tariffs, earlier this year, executive orders were put forward to reduce US import of timber products and increase supply of timber from federal lands - with a target to increase harvests from federal lands by around 25 percent. While it is unclear what the magnitude or timing of this supply increase from federal lands will be, we are continuing to assume business as usual in the forecast for two reasons. First, the current harvest volume from federal lands is very small, so a 25 percent increase is also small. And second, evidence suggests that the federal government would be hard-pressed to expand supply given the reduced federal workforce.
Finally, there has been renewed focus on immigration, with a campaign of "mass deportations". Pew Research has estimated that up to 1 million fewer unauthorized immigrants in the U.S. in June 2025, compared to January3. This will affect both the construction and agriculture industries. By one estimate, around 14 percent of the construction workforce are undocumented immigrants, and a large portion of the agricultural labor force are undocumented as well. Consequently, large scale deportations could seriously limit labor supply for those industries.
While uncertainties around the policy environment persists, 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.
There are, as always, a number of other sources of uncertainty around DNR revenue specifically, and the overall economy more broadly. These include:
-
uncertainty about the type and quality of stumpage DNR is able to bring to market more than six months out; and
-
political tension with China directly affecting timber, agricultural products and geoduck exports and price.
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
-
The prices used here are for West Coast standard or better 2x4 Douglas-fir/Hemlock boards.
-
https://apnews.com/article/geoducks-china-us-tariffs-economy-849c8052fd0e679fa421c48d32ed1bc7
-
https://www.washingtonpost.com/climate-environment/2022/06/16/summer-climate-disasters/
-
2020 Labor Day Fires: Economic Impacts to Oregon’s Forest Sector, Oregon Forest Resources Institute "https://oregonforests.org/sites/default/files/2021-11/OFRI_FireStudySummaryReport_DIGITAL_0.pdf"
Fiscal Year 2026
September 2025 | November 2025 | March 2025 | June 2025
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
-
https://www.washingtonpost.com/climate-environment/2022/06/16/summer-climate-disasters/
-
2020 Labor Day Fires: Economic Impacts to Oregon's Forest Sector, Oregon Forest Resources Institute ''https://oregonforests.org/node/840''
