The Forestry Outlook for 2026: Markets, Innovation, and Long-Term Opportunity

By Jennifer Hunt (Content Writer) and Brent Keefer (CEO)

One month into the new year, and we’re thinking about the outlook for 2026. It’s natural to be curious about the future, and industry leaders and economists are shaping their predictions for what lies ahead. We had a conversation with Brent Keefer, our CEO, and he shared his thoughts about the forestry and timberland sector, touching on details about timber markets, forestry pivots, the global economy, and his optimism for American Forest Management (AFM) and the industry as a whole. In a time marked by economic uncertainty and shifting global dynamics, understanding where forestry is headed and how landowners and managers can adapt is more important than ever. Below, Keefer shares his perspective on where the industry stands today and what gives him confidence about the road ahead.

Economic Signals to Watch in 2026

Many forecasters predict a slowdown in overall economic growth, but this does not necessarily point to a recession. Keeping a watchful eye on inflation is wise, and while it has largely stabilized, prices remain high. These broader economic conditions directly influence timber markets, particularly those tied to residential construction. Lumber demand for home construction, specifically housing starts, is sluggish. Although mortgage rates were initially pointed to as a cause for concern, the major headwinds are supply and affordability. The country is still in an underbuilt mode for housing, but the cost of home prices and procuring a sizeable down payment remain a significant challenge for homebuyers, especially younger generations who came of age during the 2007 recession and endured the pandemic. Repair and remodeling activities continue to help stabilize the industry and support lumber demand. While housing-related lumber demand remains uneven, timberland itself continues to tell a different story.

Timberland Markets

In terms of buying or selling timberland, 2025 was a strong year, and that trend is expected to continue in 2026. Large and small tracts remain attractive, both for market durability and wealth preservation. While buyers continue to be selective in specific land attributes and location, demand remains strong overall. There does not appear to be any significant softening in land prices. Of course, timber is not the only revenue stream available to landowners, and options like recreational leases, forest carbon markets, mitigation banking, renewable energy development, and conservation easements provide opportunities to diversify income. While timberland investment remains strong, not all segments of the wood market have shared the same momentum.

Pulpwood Pressures and the Push for Innovation

It is no secret that pulpwood markets have taken a significant hit in recent years as demand for pulpwood-based products has declined. Mill closures have continued to impact certain regions (parts of the southeast, Maine, and the west), but Keefer is optimistic that lower-quality wood markets will successfully evolve with new uses. In addition to exporting pulp logs to other parts of the world, investments in Research and Development are exploring other uses for this market, including biofuels, biochar, Sustainable Aviation Fuel (SAF), and biocarbon (a wood substitute for metallurgical coal used in steelmaking). The challenge can be in scaling up to larger production levels and developing cost efficiencies.  Many of these opportunities and challenges are playing out on the global stage.

Global Shifts Reshaping Wood Markets

Brazil continues to invest in new world-class pulp mills, steadily adding to its production levels.  China has quietly built capacity in the production of containerboard and integrated pulp mills, which will also have an impact on the global trade of packaging materials. Of course, this doesn’t mean the sector will disappear from the United States, but there is a rationalization happening as companies become more selective on where to make capital improvements. The U.S. has the benefits of a world-class fiber supply, robust infrastructure, and an experienced workforce. In order to stay competitive, we need to see capital investments in existing pulp mills and in alternative products to consume and utilize pulpwood to gain traction and scale. Against this backdrop of market shifts and global change, Keefer remains confident, not just in the industry but in the people guiding it forward.

Why Long-Term Thinking Still Wins in Forestry

At AFM, we’re excited about the people who have decided to join our team, and their knowledge and talent will equip them to provide the solutions we need in the future. As our workforce continues to be resilient and innovative, they will find answers to difficult questions, like: “How do we make this better?” “How do we deal with the challenges?” These skills also allow our team to help landowners with effective adaptive management by adjusting silvicultural regimes, optimizing market strategies, mitigating climate-related risk, enhancing forest resilience, and addressing other challenges to maximize the long-term health and value of their timberland.  We’re developing the right solutions and management recommendations to support a changing landscape. The industry has always excelled at dealing with economic cycles, but forestry is a long game, and many solutions are long-term efforts. We are confident that AFM and the industry at large will continue supplying high-quality wood and paper products around the world, while promoting responsible stewardship and sustainable management of our most valuable natural resources.