Quarterly Economic and Revenue Forecasts

UPDATED: February 17, 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. Most recently, in December 2025, prices averaged $394/mbf.

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. Starting in September 2025, prices fell below that range and average $598/mbf in the last four months of the year. 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 start recovering in Q2 2026 and trend upward through the end of the year.

As discussed at the end of this forecast summary, there have been multiple policies 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 actual FY 25 timber sales volume was 444 mmbf (including both Westside and Eastside sales).

The sales volume forecast for FY 26 is reduced by 25 mmbf to 500 mmbf. This is now inline with the long term average and outlying years.

Our current understanding is that the plan for the policy around structurally 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

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.

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, September 2025, the FY 26 sales price forecast was increased to $370/mbf from $340/mbf. This was largely because a raft of sales that been paused at the beginning of 2025 were approved for sale and these paused sales tended to be higher value. 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.

However, it does not appear that this assumption has held up. 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 this forecast, the sales price for FY 26 is 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.

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

Timber Removal Volume

Forecast harvest volume for FY 26 is reduced substantially, by 40 mmbf to 400 mmbf. Harvest volume in the first four months of the fiscal year essentially collapsed. While the November harvest was close to average, December again was near historic lows. Through December, timber harvest was only 143 mmbf, 39 percent lower than the average of 233 mmbf through December.

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. there are increased incentives for private timber owners to pull forward harvests to avoid new forest practices rules around riparian zones, which are scheduled to take effect in August 2026;

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

  4. 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.

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.

For outlying years, the harvest price is reduced FYs 27 and 28 due to the decreased forecast sales price.

Timber Revenue

The timber revenue forecast for FY 26 is decreased by nine percent, or $15 million, to $153 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. While the revenue to date has not seen a downturn, there are a number of issues that may have a detrimental impact on revenue this fiscal year with some having residual effects going into subsequent years as well.

  • Irrigated – Previously, auction results were not as high as expected, and the forecast was reduced by $0.3 million to reflect the unexpected decline in lease value. There has not been substantive change to the outlook on irrigated lease revenue, so the forecast is held.

  • Orchard and Vineyard – The forecast was reduced by $0.5 million in the previous quarter in response to the downturn in apple and wine grape markets. Revenue so far are tracking with this new forecast.

  • Commercial – While there was less revenue from commercial leases in this quarter, this was due to the timing of invoices. It is not indicative of a change in expected revenue from commercial so the forecast is held at the previous quarter’s value.

  • Minerals and Hydrocarbons – the price of aggregate has been higher than usual, but, there have been major restrictions that will restrict revenue for an unknown duration. It is not clear what the net impact of both of these factors will be for revenue at this point, so the forecast will remain unchanged.

Aquatic Leases

The forecast for non water dependent rents is increased from $6.0 million to $6.5 million for FY26. Non water dependent rents have had higher than expected revenue to date and appear to be on pace for $6.5 million for the fiscal year.

Geoduck

The geoduck revenue forecast is reduced substantially for FYs 26 and 29, and reduced slightly in FYs 27 and 28. The December 2025 auction had an average price a bit above the expected price, so the price outlook has been adjusted upwards. However, we had confused the quantity of geoduck likely to be offered in the outlying years. The 2024 fishing year had a Total Allowable Catch (TAC) of 1.7 million pounds, which was reduced to 1.5 million pounds in the 2025 fishing year. This reduction had not been incorporated into the forecast, and its inclusion in this forecast far outweighs the increase in the price forecast.

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 auctions, of $6.66 and $5.75, respectively, support that hypothesis.

Rapidly changing tariffs and the uncertainty they create are particularly problematic for geoduck producers, because, unlike many other exporters, they have tight time bounds on their trading, little room for hedging activity and are required to pay their bid price. Geoduck harvest windows are typically about three months, often with shorter windows for individual tracts. Geoduck are generally sold live and typically are on a flight within 24 hours of harvest. This means geoduck harvesters have almost no capacity to adapt to tariffs. They cannot pull forward export quantity to avoid upcoming tariffs or delay shipment to hedge against sudden increases — they are contractually obligated to harvest their quota during the harvest window. Additionally, DNR has explicitly excluded tariffs as potential reason for relief from purchasers’ obligations to harvest geoduck.

Taken all together, this means that purchasers face substantial business risk from rapidly changing tariffs. Purchasers are committed to pay what they bid, which is based on a price they expect to get when they sell in China. A sudden change in the tariffs will change the prices that they are able to sell for, but it doesn’t change the amount that they pay or their obligation to harvest. This could put the business at risk. To take into account this risk, a rational business person would dramatically reduce the price that they are willing to pay for geoduck, to hedge against the potential losses associated with an increase in tariffs. This appears to be what we’ve seen in geoduck prices since December 2024.

In addition to tariff uncertainty, there have been repeated issues with arsenic levels. Several tracts have failed arsenic testing until after the geoduck auctions.

Because it appears that tariffs and tariff uncertainty are currently driving geoduck prices, some forecast around these are necessary to predict geoduck prices. Unfortunately, the question of when and how tariffs will change is a political one — which we are fairly ill-equipped to make.

On October 30, 2025, a "truce" in the trade war between the U.S. and China was announced, that would reduce some tariffs and halt any new tariffs. There appears to be significant skepticism around whether the tariff truce will hold for the long term, but it is likely that the relative stability it provides will increase geoduck prices. However, it is not clear if it made any difference in the December geoduck auction, which had an average price of $8.93/lb, which was roughly in line with the December 2024 auction of $8.40/lb.

The geoduck price model assumes the truce does little for the uncertainty around the tariffs and that the additional uncertainty from tariffs will continue until mid-2026. That is, average auction prices will remain suppressed for 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 decreased by $21 million, or 4.4 percent, to $451 million.

Other notes to the Forecast

2025 saw 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 were changing so rapidly, it was difficult to parse which policy changes would actually affect DNR revenue. That uncertainty hasn’t changed.

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 tariff uncertainty will remain until the end of 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, tariffs on Canadian lumber — which supplies between 20 and 30 percent of softwood lumber used in the U.S.— 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. Modelling done by CINTRAFOR after the announcement of the tariffs suggested there would only be very small changes to the wood products sector’s output.

Aside from the tariffs, earlier in 2025, executive orders were put forward to reduce U.S. imports of timber products and increase supply of timber from federal lands - with a target to increase harvests from federal lands by around 25 percent. We are assuming that this will not result in a meaningful change in the supply of timber on the West Coast for two reasons. First, the current harvest volume from federal lands is very small — in 2024 harvests from federal lands was 121 mmbf out of the 2,444 mmbf total harvest, around five percent. A 25 percent increase from the 2024 harvest would be only 30 mmbf3. And second, a dramatically reduced workforce at the USFS would be hard-pressed to expand supply.

Finally, there has been renewed focus on immigration, with a campaign of "mass deportations". Pew Research has estimated that there were up to 1 million fewer unauthorized immigrants in the U.S. in June 2025, compared to January4. This is affecting both the construction and agriculture industries5. 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. Having said this, it’s not unambiguous that deportations are having a meaningful effect on housing construction and renovation - which are typically responsible for around 70 percent of U.S. wood products consumption. Housing starts in 2025 remained where they were in 2024, though housing completions fell by around 4 percent.

In a previous forecast, we noted that there had been reporting that the administration would pause raids on agriculture, hotels and restaurants6. However, it doesn’t appear that there’s been an actual change in policy7. Consequently, large scale deportations appear to be seriously limiting labor supply for those industries.

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.

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 Kansas8.

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 Sector9.

  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://dor.wa.gov/taxes-rates/other-taxes/forest-tax/harvest-statistics

  4. https://www.pewresearch.org/race-and-ethnicity/2025/08/21/u-s-unauthorized-immigrant-population-reached-a-record-14-million-in-2023/

  5. https://www.nytimes.com/2025/11/02/business/construction-tariffs-immigration-trump.html and https://www.king5.com/article/news/community/facing-race/washington-immigration/what-promise-mass-deportations-doing-immigrant-workforce-president-trump-ice/281-624dd7f8-8e23-4199-8f07-f738c883cd06

  6. https://www.nytimes.com/2025/06/13/us/politics/trump-ice-raids-farms-hotels.html

  7. https://www.npr.org/2025/08/20/nx-s1-5496668/some-florida-farmers-reduce-crops-as-deportation-fears-drive-workers-away

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

  9. 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 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 ''https://oregonforests.org/node/840''