By Samuel Scott
As we flip the calendar to 2026, Montana’s forest products industry sits at a crossroads of uncertainty and opportunity. Table 1 provides a snapshot of the sector in 2025. While final harvest numbers are not yet available, current estimates indicate a 12% decline in statewide timber harvest between 2024 and 2025, with decreases occurring across all ownerships. Harvest from private lands has continued its multiyear downward trend, and state lands saw a slight reduction as well. On the U.S. Forest Service side, timber harvest fell approximately 7% in 2025 to about 154 MMBF Scribner, including volume reported under Good Neighbor Authority management. Several pending policy changes, however, may influence 2026 outcomes.
A White House executive order and accompanying agency memo issued in March 2025 calls for a 25% increase in national forest timber harvest over the next four to five years. Nationally, this proposal would likely have a minimal effect on total harvest, lumber production, or broader economic activity. For regions like Montana – where roughly half of the timber originates on national forest lands – the implications could be more meaningful. A 25% increase in federal harvest could translate into a 10 – 15% boost in statewide volume. A BBER analysis of mill capacity across 12 western states suggests the industry could absorb the proposed increase, though several important constraints remain.
Constraints on expanded harvest
Supply-side bottlenecks, including labor shortages and high housing costs, will continue to limit growth. Expanding timber harvest would require additional in-woods and in-mill labor, which has proven difficult to secure across the West. Reduced mill infrastructure in certain regions, including Montana, also poses challenges, as longer haul distances increase costs and erode competitiveness. In addition, an executive order alone may not provide mills and contractors with the long-term certainty needed to justify significant investment. Finally, continued volatility in the housing market may keep wood products demand – and prices – subdued.
“Montana’s forest sector is entering 2026 with more
questions than answers, but also with room for
strategic adaptation.”
Trade policy and market uncertainty
Tariff policy remains another wildcard. A combination of softwood lumber and broader trade-related tariffs has been proposed and implemented to bolster domestic demand by raising the cost of Canadian lumber. It is still too early to tell whether these measures will meaningfully shift trade flows or market behavior (Table 2) but import volumes and lumber prices will be important indicators to watch throughout 2026.
Residual Markets and Mill Infrastructure
Meanwhile, low lumber prices and rising production costs continue to pressure mills. The closure of Roseburg Forest Products’ particleboard facility last year has affected nearly every mill in the state by reducing outlets for residuals. The former mill site in north Missoula has since been purchased and is being redeveloped into a movie studio, manufacturing hub, and housing complex. Elsewhere in Missoula County, the former Pyramid Mountain Lumber site remains vacant, though discussions continue regarding the potential for a new mill in the coming years.
Outlook for 2026
Montana’s forest sector is entering 2026 with more questions than answers, but also with room for strategic adaptation. The speed at which policy, markets, and infrastructure can realign to dynamic conditions will determine whether this year brings renewed momentum or continued headwinds.
Samuel Scott is a forest economist at the Forest Industry Research Program in the Bureau of Business and Economic Research at The University of Montana.
