Buying Land

Revisiting President Trump and the Price of Timber in 2019

Revisiting President Trump and the Price of Timber in 2019

Nearly three years ago, after the 2016 U.S. presidential election, we posted analysis in response to messages and calls querying the implications of the new administration on the U.S. forest products industry. Recently, with radiating global markets and tariff trade kerfuffles causing investors to take deeps breaths and count to ten, the inbox swelled again with the concerns of and about firms exposed to building products generally and timber investments specifically.

In this post, we revisit key points from 2016 to review what we know and confirm what remains worth watching as we move towards 2020.

Issues and Context

Forest Supplies: Trees grow, regardless of election outcomes and the state of the global economy. While forest clearing accelerated in Brazil recently, the physical facts affirm that the United States, and the U.S. South in particular, continues to grow trees and support a sustainable wood basket…

Capital Investment: The forest industry added billions of board feet of lumber capacity since 2012. Iron (capital investments in mills) flows to the resource. Just recently, this slowed down with stagnant demand for housing and wood products, as reflected in growing downtime at mills across the U.S. and Canada…

Economic Growth and Housing Markets: In 2016, we asked if the U.S. election would “somehow lead to uncertainty, slower economic growth, and fewer housing starts?” While the U.S. economy continues to grow and housing starts inch upwards, uncertainty in markets exists. Grep Ip of the Wall Street Journal noted a reduced commitment to open or free markets in the U.S. and elsewhere and, “in response, investors are rearranging portfolios, businesses are rethinking investments and policy makers are struggling to respond—all of which are pushing the global economy closer to recession.”

Trade and Legislation: Three years ago, we noted how political and legislative decisions had “the most direct potential impact on wood markets and timber prices…depending on trade policy with China and negotiations with Canada.” In our analysis of the forest industry, trade with China (via Canada or the U.S.) and Canada are critical, measurable sources of U.S. wood demand and softwood lumber production, and thus affect timber prices. As flows to China fall from North America, production in the United States follows suit along with timber price expectations.

In our models, stronger timber prices depend on growing demand, through increased housing starts and a growing population, and robust trade with a range of countries across a variety of forest products. Uncertainty reigns in my conversations with others, as investors and executives seek firm ground during a turbulent time.

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About the author

Brooks Mendell, Ph.D.

Brooks Mendell, Ph.D. is President and Founder of Forisk Consulting, a forest industry, timber REIT, bioenergy and timber market research firm. Dr. Mendell has over fifteen years of operating, research, and consulting experience in forest business and finance. Mendell has published over sixty articles and two books on topics related to timber and timberland REITs and markets, forest business management and operations, and communication skills.


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  • Didn’t get much from the article. No numbers – housing starts before versus now etc. actual US usage before and after 2016. The numbers should speak. How much does Timber depend on exports vs national growth? Don’t have to be bias and I did not pick that up, but didn’t answer the title question.

  • I do not trust this article…sounds like a Democrat wrote it. From what I can see, our economy has grown and is doing great under President Trump. The only people not sure of things do not understand capitalism or how to deal with other countries. God bless America and our great President.

    • Tell me one thing that makes Trump great. Please choose one of the answers below: 1 = Abandoning our ally the Kurds who fought & 10s of thousands died to help eliminate ISIS. 2 = The major tax break for corporations, the rich, & throwing a bone for everyone else while putting America into the worst debt ever & exploding deficits. 3 = Virtually ending free trade with major trading partners severely hurting farmers & raising the cost of goods through raising tariffs. 4 = Dividing our country through immigration policy and fanning the flames of prejudice. 5 = Violating the Emoliments Clause in the Constitution by lining his pockets. If none of these answers are appropriate, please let me know where the President is “Great”. Thank you.

      • Typical liberal response, “please choose from these extremely biased and/or incorrect facts I have presented to you. ” Yeah ok Budd. Get a life. Contrary to the authors OPINION which is completely unsubstantiated with any facts or data, you could quickly do a google search of President Trumps accomplishments online. They are too long for me to list here, especially for someone who I suspect has NO interest in knowing the truth and whose personal hatred for the President a.k.a. T.D.S. (Trump Derangement Syndrome) would only be aggravated to extremely intolerable levels by any facts of his success. Have fun crying and pulling out your hair for the next five years. TRUMP 2020

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