Where Hardwood is Losing Value

The hardwood industry has plenty of wood. What it increasingly lacks are viable markets for moving hardwood from the forest to the customer.

To understand market impacts, we can begin by scouring recent hardwood industry news and economic reports. Doing so helps us identify patterns and confirm what many in the industry already know.

But the headlines only give us the big-picture view.

To understand what market conditions mean for individual businesses, we also need to listen to the people working inside mills, inspecting lumber, and watching loads move—or fail to move—through the supply chain. That is why I have begun sitting in

on meetings with NHLA’s National Inspectors. Their work takes them into hardwood facilities across North America, giving them a ground-level view of the pressures facing our businesses.

Taken together, the headlines and inspectors’ observations point to a different way of understanding today’s market. The problem isn’t simply how much hardwood exists or how many lumber mills can produce. It’s whether enough value can be recovered at each stage—from the log entering the mill to the lumber leaving it—to keep the next stage economically viable.

Too often, this valuable resource travels through the hands of land-owners, loggers, sawyers, kiln operators, inspectors, and manufacturers, only to be placed on a pile with no immediate buyer.

The problem is not simply surplus. There is a growing mismatch among available timber, processing capacity, and markets willing to purchase the resulting products.

WHEN ONE HARDWOOD LUMBER MARKET DISAPPEARS

The hardwood lumber market has never moved uniformly. Conditions differ by region, species, grade, and end use. A strong market for one species can exist alongside saturated inventories of another. Demand for high-grade lumber can also obscure the difficulty of finding buyers for lower grades, industrial products, and residuals.

THOSE LOWER-VALUE MARKETS ARE ESSENTIAL TO THE ENTIRE HARDWOOD SYSTEM.

The July announcement that Finch Paper would end pulp production at its Glens Falls, New York, facility demonstrates what happens when one disappears. Its decision to stop producing pulp from local wood and instead purchase pulp from outside the region left loggers and foresters across New York and New England worried about losing one of the area’s largest buyers of lower-value material.

Although Finch is a paper producer, its decision has consequences for the hardwood supply chain. A hardwood harvest does not produce only high-value sawlogs. It also produces lower-quality trees and material that must have somewhere to go if the economics are going to work for the landowner and logger.

The value of an FAS board does not begin at the grader’s table. Its economics are connected to what happens to lower-value material removed from the same forest. Without viable markets for that material, land-owners also have fewer economic incentives to conduct improvement harvests and make investments that support the forest’s future quality.

Every closure can eliminate a market for landowners, extend hauling distances for loggers, reduce competition for timber, and leave secondary manufacturers with fewer domestic suppliers. Once that infrastructure disappears, it is difficult and expensive to rebuild.

That is how a region can have hardwood trees in abundance yet have less hardwood economically available to the market.

PRESSURE FROM BOTH DIRECTIONS

When I met with NHLA’s National Inspectors on July 22, what I heard was not encouraging.

Log costs remain high. Lumber prices remain low. For many mills, there is very little margin between the two.

One inspector described seeing mill sheds filled with lumber that had nowhere to go. At the same time, inspectors are encountering more claims and disputes over lumber quality. Buyers appear to be examining grades more closely, challenging relatively minor issues and, in some cases, seeking price reductions or reasons to reject material entirely.

These behaviors may be symptoms of the same market pressure. When margins are already thin, every board and every grade is subject to greater scrutiny.

National Inspectors also reported severe pressure in the white oak and stave markets. In one case, a stave producer had shifted toward selling white oak logs rather than processing them into its traditional product.

Hardwood demand is highly specific, and conditions vary substantially by region and facility. Still, when a company determines that selling a log may be more viable than manufacturing a higher-value product, it raises an important question: Where in the process is value being lost?

THE FORCES MILLS CAN’T CONTROL

Recent news shows that factors beyond supply and demand increasingly determine market access.

Trade policy is one influence. The Kitchen Cabinet Manufacturers Association has supported the Coalition for Fair Trade in Hardwood Plywood’s trade case involving imports from China, Indonesia, and Vietnam. The case demonstrates how pressures in one segment move throughout the hardwood value chain. Policies intended to protect domestic production can strengthen one part of the industry while changing costs and sourcing decisions for another.

Export markets provide another outlet. The American Hardwood Export Council reported that U.S. hardwood lumber exports to India reached a record in 2025, increasing 46 percent in volume and 37 percent in value from 2024.

India remains a comparatively small destination for American hardwoods, but that growth matters. It demonstrates that new demand can be developed through sustained promotion, education, and relationship-building.

At the same time, exports do not automatically resolve the industry’s problems. Strong log exports may provide an outlet for landowners and exporters but can also intensify competition for raw material without supporting domestic manufacturing. The greater long-term opportunity is to expand demand for value-added American hardwood lumber and products, allowing more of the economic benefit to remain with domestic mills, manufacturers, workers, and rural communities.

Regulation will also determine which markets remain accessible. The European Union Deforestation Regulation will impose new traceability and due diligence requirements on timber and wood products beginning December 30, 2026. A business can have the right lumber at a competitive price and still lose access to a customer if it cannot provide the required documentation.

A mill cannot set interest rates, rewrite trade policy, reopen a closed customer, or create overseas demand overnight. What it can control is how much value it recovers from the material already entering the facility.

FINDING THE VALUE HIDDEN INSIDE THE MILL

Hardwood businesses can develop a more precise understanding of where they are capturing—or losing—value inside their own operations.

Resistance to new technology and processes remains another burden on the hardwood industry. NHLA National Inspectors report that yield studies are most likely to produce lasting improvements when a mill incorporates the findings and follows through on their recommendations. Collecting information alone does not increase profitability. Applying it does.

Here comes the shameless—but highly relevant—NHLA plug: Our National Inspectors conduct on-site Yield Analyses designed specifically to identify waste, improve recovery, and help hardwood facilities turn more of their raw material into usable, sellable products.

Inspectors can evaluate operations at the headsaw, resaw, gangsaw, edger, trimmer, green yard, dip tank, and dry kilns. They look for problems such as incorrect machine setup, inconsistent thickness, over-edging, under-edging, trimming errors, and missed opportunities to recover higher-value lumber.

A yield analysis can also help a facility answer larger strategic questions. Is the mill recovering the grade and value it should from the logs it purchases? Is the equipment calibrated for the species and products being processed? Is the operation producing what customers currently want, or maximizing volume in products that are becoming more difficult to sell?

Those questions are especially important when log costs represent such a large portion of a mill’s investment. In a market with little room between raw-material costs and lumber prices, even a modest improvement in yield can make a meaningful difference.

Yield analysis will not create industrywide demand, and efficiency alone cannot compensate for the loss of customers or processing capacity. But it can reveal where a mill is leaving money on the floor and ensure scarce margin is not being lost through preventable errors.

THE LARGER SOLUTION REQUIRES WORK BOTH INSIDE AND OUTSIDE THE MILL.

Inside, businesses need accurate information about recovery, grade, cost, and the products their operations are best equipped to manufacture profitably. They must be willing to act on that information, calibrate equipment, reconsider product mixes, train employees, and adopt technology where it produces measurable value.

Outside, the hardwood industry needs more outlets for underused species, lower grades, residues, and byproducts. It needs investment in domestic secondary manufacturing and continued export development to diversify the industry’s customer base.

Finally, the industry must communicate the connection between hardwood markets and healthy forests. When consumers, designers, and policymakers understand that active markets give landowners reasons to retain and manage forests, sustainability becomes part of the value proposition rather than merely another compliance requirement.

None of these efforts offers a quick or complete solution. Together, however, they suggest a more productive way to think about current conditions.

The industry cannot control every force compressing today’s market. But it can become much more precise about where hardwood gains value, where it loses value, and which products justify the cost of producing them.

For Q3, perhaps the most useful question isn’t how much lumber a mill can produce. It’s how much value that mill can recover from every log—and whether the market will pay for what comes out the other side.

Sources

• American Hardwood Export Council. “Record Year for U.S. Hardwoods to India in 2025.” Feb. 26, 2026.

• European Commission. “Delay Until December 2026 and Other Develoments in the Implementation of the EUDR Regulation.” Jan. 28, 2026.

• Kitchen Cabinet Manufacturers Association. “KCMA Submits Letter in Support of Coalition for Fair Trade in Hardwood Plywood.” July 22, 2026.

• National Hardwood Lumber Association. “Yield Analysis & Quality Control.” Accessed Aug. 5, 2026.

• National Hardwood Lumber Association National Inspectors. Staff discussion with the author. July 22, 2026.

• Oliver, Charlotte. “A New York Paper Mill Is Closing Part of Its Operation. Vermont Loggers Are Sounding the Alarm.” VTDigger, July 20, 2026.

By BRENNAH HUTCHISON, Hardwood Industry Liaison & Content Director