Quarterly Economic and Revenue Forecasts

UPDATED: March 23, 2023
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. Lumber prices have been exceptionally volatile throughout the past three years. In 2021, prices peaked at around $1,600/mbf in May, then plummeted to a low of $414/mbf in August (West Coast standard or better 2x4, Douglas-fir/Hemlock). Prices rebounded over the next several months to peak at $1,400/mbf in March 2022, but again fell dramatically to $640/mbf in August. Since then, prices have continued to decrease and were around $440/mbf in December 2022. Prices are expected to remain above $400/mbf — the average price for several years prior to 2019 — and are unlikely to rise again until late in the calendar year at the earliest. Obviously, there is still meaningful downside risk to prices.

High lumber prices appear to have pulled up log prices, with the price of a "typical" DNR log rising from a low of $500/mbf in April 2020 to peak at $720/mbf in April 2021. Prices then softened to a trough of $600/mbf in October 2021, before increasing again to peak at $790/mbf in July 2022. However, the decline in lumber prices hasn’t pulled log prices down as much. July log prices seem to have been the peak, with prices falling to a range between $690/mbf and $730/mbf from August to December. This is still meaningfully higher than the $580/mbf average from 2015-2019.

Timber Sales Volume. DNR currently plans to offer around 530 mmbf for sale in FY 23. Building in likely no-bids and sales falling off for various reasons, our sales volume forecast is unchanged at 500 mmbf for FY 23 and outlying years.

Currently, there is no expectation that the timber sales program will be able to recoup the sales delayed in FY22. Additionally, it is possible that future forecast volumes will be reduced due to the Department’s Carbon Project, which will remove 10,000 acres of forest land from the planned harvest schedule and instead generate revenue through carbon offsets. However, the current 500 mmbf forecast in outlying years is typically quite conservative, so it is also possible that the new program will have no meaningful effect on the forecast sales volumes.

Timber Sales Prices. The forecast timber sales prices are increased to $380/mbf for FY 23. Sales prices have averaged $412/mbf through the January auction — a $380/mbf forecast is on the lower end of a reasonable middle ground, reflecting both the continued strength of prices and the likely decline in prices due to slower housing construction and some lower value timber expected in the latter half of the fiscal year. The outlying years’ forecast prices are unchanged at the long-term average of $350/mbf.
Timber Removal Volume and Prices. The removal volume forecast for FY 23 is decreased to 500 mmbf (from 510 mmbf) due to slower than expected harvests in the first half of the year. Outlying years’ forecast volume removal is unchanged.

Removal prices are increased slightly in FY 23. Removal prices in outlying years are increased more substantially due to both higher sales prices to-date (leading to a higher value inventory) and the increase in the forecast sales price.

Timber Revenue. Timber revenue in FY 23 is reduced slightly due to lower timber harvests to date, while outlying years’ revenue is increased due to the increase in the FY 23 forecast average sales price.

Timber revenues for the 2021-23 biennium are $358 million — around $7.0 million lower than previously forecast. Forecast revenues for the 2023-25 biennium are increased to $383 million — around $10.7 million higher than the previous forecast.

Non-Timber Revenues. In addition to revenue from timber removals on state-managed lands, DNR generates sizable revenues from managing leases on uplands and aquatic lands.

Forecast uplands revenue for FY 23 is decreased by $0.4 million due to lower irrigated agriculture revenue expectations more than offsetting an increase in minerals and hydrocarbon revenue. Forecast revenue in outlying years is unchanged.

The aquatic lease forecast for FY 23 is increased slightly, while outlying years’ forecasts are decreased slightly.

The geoduck forecast revenue for FY 23 is decreased to $19.5 million. This is purely due to a decrease in the prices received for the November geoduck auction. The price forecast is typically on the lower end of the likely range of geoduck prices, due to geoducks historical volatility. There were a number of coincident issues that appear to have suppressed the November auction price to below the forecast that do not seem likely to affect upcoming forecasts. Therefore, the price forecast in the future is unchanged for now.

In addition to the normal risks that can swing geoduck revenue wildly — including paralytic shellfish poison closures, compliance vessel availability, and sewage contamination from flooding run-off — there are concerns about the ongoing strength of geoduck demand from China. In the lower revenue, but still possible, scenarios, a drop in geoduck demand will lead to a market more like FY 20 and FY 21, with revenue in the $10-$13 million range.

Additionally, geoduck are still covered by tariffs initiated during the trade war between China and the U.S. from 2018. These have been suspended during the COVID-19 pandemic, but, as far as we can tell, they are still on the books.

Total Revenues. The forecast revenue for the 2021-23 biennium is decreased to $516 million, and the forecast revenue for the 2023-25 biennium is increased to $536 million.
Other notes to the Forecast. There are, as always, a number of sources of uncertainty around DNR revenue specifically, and the overall economy more broadly. These include:
  • increasingly frequent legal challenges to timber sales;

  • uncertainty about the type and quality of stumpage DNR is able to bring to market more than six months out; and

  • the ongoing (but apparently dormant) trade war and political tension with China directly affecting timber, agricultural products and geoduck exports and price.

Additionally, although timber sales volume estimates are based on the best available internal planning data, they are subject to adjustments due to operational and policy decisions.

Climate change has emerged as 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. More recently, 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 Kansas1.

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 Sector2.


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
Fax 360-902-1775