Quarterly Economic and Revenue Forecasts

UPDATED: July 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/mbf. However, in the last couple of months, they have increased substantially, to around $580/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. Log prices haven’t risen in the last couple of months, but it’s likely they will rise if lumber prices remain high.

The outlook for both log and lumber prices is, on balance, that they will increase somewhat. However, as discussed at the end of this forecast summary, there have been multiple policies enacted or proposed that may meaningful affect lumber or log prices, or both. While the policy uncertainty exists, we expect there to be price volatility, 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 volatility in their prices.

Timber Sales Volume

The FY 25 timber sales volume forecast is increased from 430 mmbf to 445 mmbf. There have been fewer no-bids and legal delays to planned sales than we had forecast in March.

The volume forecast from FY 26 and onward is unchanged. However, the pause on timber sales with certain forest characteristics remains a significant source of uncertainty. The policy outcome at the end of that pause could have a substantial effect on the timber sales volume, particularly in FY 26.

Historically, a buffer of around 10 percent of planned sales volume has been adequate to account for the typical risks to sales. However, for the last several years there has been increased opposition to DNR timber sales, both through challenges to sale approval and through lawsuits. Given these continued challenges and the uncertainty around the pause on certain sales, the FY 26 sales volume forecast lower than outlying years. Additionally, this forecast volume does not include any of the FY 25 sales that have been paused — there is no assumption that they will be moved into FY 26 or any of the outlying years.

Timber Sales Prices

The forecast timber sales price for FYs 25 is increased from $375/mbf to $405/mbf. This substantial increase is 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 unchanged at $340/mbf. This is lower than the outlying years because the reduced sales volume forecast is from sales that are typically higher value. Fewer high value sales will tend to reduce the average sales price. This will, of course, be reevaluated in the next forecast, but given the recent timber sales prices, it seems likely that this FY 26 price forecast will be too low.

Outlying years’ prices are unchanged at the long-term average of $350/mbf. This is based on the assumption that current opposition to DNR sales will resolve in such a way that prices will return to their long term average. This may be optimistic.

Timber Removal Volume and Prices

Forecast harvest volume is unchanged for all forecast years.

However, while the current forecast for FY 25 is possible, the risk is heavier to the downside. Harvests on DNR lands were slower than expected throughout FY 24. This was apparently largely due to readily available private logs, though weather issues likely contributed as well. And this trend continued in FY 25, where harvests have been much slower than previous years. The harvest volume forecast was reduced substantially in March.

To be clear, this is entirely unconnected to the pause on some types of timber sales.

Forecast removal volumes in FY 26 and 27 are unchanged.

Forecast timber removal prices are largely unchanged.

Timber Revenue

The timber revenue forecast is largely unchanged.

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 down from $47.2 to $46.1 million for FY25 with a recovery back up to $47.3 by FY27.

This is primarily caused by some orchard/vineyard lessees failing to meet their payment obligations. As a result, revenue is projected to temporarily decline in FY25 and partially in FY26 as DNR takes action to collect past due payment. Full recovery is expected shortly thereafter. However, this remains a significant risk to uplands revenue. The temporary decrease in orchard/vineyard revenue is partially offset by an increase in the forecast for the "other leases" category, mostly driven by the steady increases in revenue from renewable energy leases and other special uses going forward.

Aquatic Revenues 

Water dependent lease revenue forecast is increased from $7.5 million to $7.8 million for FY25 and onward. This reflects the consistent performance of water dependent leases over the last 3 years and is projected to continue.

Non-water dependent rent forecast is increased by $0.5 million in FY25 which is a one-time back payment on a lease. There was about $0.5 million higher than average amount of non-recurring revenue from easements and various special uses. This is incorporated as a one time increase in FY25 revenue.

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 in FYs 25-27, by $1.5, $2.8 and $1.4 million respectively. Prior to the December 2024 auction, auction prices were expected to average

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. 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.

The geoduck price model was 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 2026. These assumptions translate into a larger decrease in the FY 26 forecast, compared to FY 27.

The June 2025 geoduck auction — held as this report was being written but not included in the price forecast — had an average price of. This is about 20 percent lower than our current average price forecast of around $8.50/lb. While this lends further weight to the hypothesis that there is a new average price level, there was a confounding issue where one of the tracts didn’t clear it’s arsenic test until after the auction.

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 2023-25 biennium is essentially unchanged at $500 million, and decreased slightly by $2.1 million to $487 million for the 2025-27 biennium.

Other notes to the Forecast

At the Departmental level, while the impact of the six-month pause on timber sales on select mature forests is relatively clear for FY 25, there remains uncertainty about what will happen in FY 26 and beyond. Since the previous forecast, there have been no substantive changes or updates on the pause, so the underpinning logic and numbers presented in the previous forecast continue to hold steady.

At the federal level, this past quarter has seen a flurry of policy announcements, amendments, pauses, retractions, and reimpositions. This has resulted in a volatile operating environment that directly impacts DNR revenue. Most notable is the unprecedented tariff rate hike on Chinese imports to nearly 130 percent, with China retaliating with tariffs rates at nearly 150 percent. Since that peak, U.S. and China have agreed to lower tariffs to 51 percent and 32 percent respectively, but these rates are still very high.

As discussed above, the high tariff on U.S. goods directly impacts Washington’s geoduck industry, in particular, which is highly dependent on markets in China1. While there are secondary markets for Washington’s geoduck, the high tariffs and volatility in tariffs appear to be resulting in substantial losses to both industry profits and DNR revenues. Additionally, a significant portion of the wheat produced in Washington is marketed overseas. These will likely also see some effects.

It is unclear if and when these tariffs will deescalate or 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 some 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 lumber could increase lumber prices in the U.S. and lead to timber price increases. But there could be countervailing pressures that nullify the effect.

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.

As uncertainties around the policy environment persists, forecasts continue to be made based on the most likely scenarios with a reasonable degree of certainty, 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 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. 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 Kansas.

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 Sector.

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''