How may the housing industry affect timber returns?
• While nearly two-thirds of the timber harvested in the U.S. is used in home construction and remodeling, three factors can serve to balance how this affects timberland return potential. First, if the market for timber is weak, trees can be “stored on the stump” to continue growing in volume and potential value until more favorable market conditions return. Second, while demand for the lumber used in housing may be weak, demand can remain strong for other products such as pulpwood and chip-n-saw, which are used to make paper and paperboard, fuel, and thousands of other wood products. Third, timberland returns don’t solely rely on timber sales; returns also may be realized through nontimber revenue sources and land sales.
