Timber markets across Michigan and northern Wisconsin have faced significant volatility in recent years, following a stretch of relatively strong performance.
According to Corey Fanslau, vice president of traditional lending at GreenStone Farm Credit Services, the sharp fluctuations in timber markets stem from a combination of interrelated factors—rising interest rates, shifting housing demand, changing supply levels, trade policy uncertainty and uneven performance across wood product segments. Higher borrowing costs have dampened both home purchases and new construction, with housing starts down 11% year over year as of August 2025.
“In the COVID years, a lot of people had nothing better to do, so they went to the local lumber store, and purchased products for remodeling or additions. It gave the industry a spark for a couple of years, but that has since tapered off as both interest rates and inflation increased,” Fanslau said.
At the same time, the cost of fuel, tires, filters, equipment, maintenance and labor costs all increased. “Like farming, timber is a commodities-driven market where price is driven by demand,” he added.
In Wisconsin, forest products jobs fell sharply from 25,607 in 2001 to 6,947 in the third quarter of 2024 — a 46% decrease — according to the Wisconsin Council on Forestry’s 2024 Industry Trends Final Report. Michigan has lost about 1,100 forestry jobs since 2019, according to The Timberland Investor.
Wisconsin also had mill closures in Goodman, Mattoon and Rice Lake in August 2024, as reported in the Wisconsin Council on Forestry’s December 2024 final report.
State of the market
The timber market has been oversupplied. Mills are operating below capacity due to excess inventory, which is contributing to lower prices for loggers.
“Papermills and sawmills have reduced production in response to market conditions,” said Fanslau. “There is some hope that the recent federal interest rate cut announcement may help stimulate economic activity and housing demand. “Additional pulp production could help offset the dip in demand for hardwood. That was the hope for Michigan’s Upper Peninsula when it’s largest timber buyer, Swedish pulp and paper company Billerud — formerly Verso Corporation — announced a $1 billion investment to convert its Escanaba, Mich., plant into a cartonboard production facility.
The conversion was later canceled, and the investment was trimmed to $127 million due to economic factors and construction challenges. Billerud also has paper converting facilities in Quinnesec, Mich., and Wisconsin Rapids, Wis. “This left loggers with excess expensive equipment and little to no income,” said Dalton Hanchek, a GreenStone financial services officer based in Escanaba.
Recent investments by the Escanaba paper mill — though smaller than initially planned — have renewed demand for wood, supporting logging businesses, Hanchek explains.
“There is continued demand for cardboard and paperboard, which benefits the industry. However, challenges remain, such as inconsistent cash flow, high equipment and repair costs, and the industry's dependency on the paper mills’ operational decisions,” he said. “The recent pickup in demand for wood has helped some loggers recover financially.”
The industry is cautiously optimistic, according to Hanchek. Industry experts expect modest price increases of between 3-5% roughly in line with inflation — according to Miller Wood Trade’s 2025 Hardwood Purchasing Handbook. Limited supply capacity may drive prices higher in the second half of 2025.
However, short-term obstacles have also caused upheaval. “In the northern U.P., Baraga, Houghton, Ontonagon and Gogebic counties, heavy rain and wet conditions have hindered loggers' ability to access the woods and haul wood, particularly in Baraga and Ontonagon,” Hanchek said. “Those conditions have traditionally come during the breakup season in the spring, not in late summer and fall.”
Other factors impacting the market were a massive ice storm in Northern Michigan that damaged or destroyed more than three million acres of public and private forest. Clean-up efforts have provided some opportunities but have been hindered by excess inventory.
The smaller mills and hand cutting crews of central and southern Michigan specialize in high-value hardwoods. Like their neighbors to the north, they too have begun to feel the negative impact caused by uncertainty in global markets.
“Michigan’s forest products industry continues to demonstrate resiliency during these volatile times,” said Julie Judge, a GreenStone financial services officer based in Cadillac, Michigan. “The mill and logging industries are deeply rooted in our state’s history and culture and will continue to provide jobs and economic opportunities despite these challenges.”
New uses for timber
Mass timber buildings are structures that “are constructed with large pre-manufactured, multilayered, solid wood panels resulting in solid timber floors and walls typically ranging from 5 to 12 inches in thickness, according to the American Wood Council. Mass timber is gaining popularity in commercial construction where cross-laminated timber (CLT) panels replace concrete, brick and steel.
Michigan State University recently built the state’s largest mass timber building, the STEM Teaching and Learning Facility, on the site of the former Shaw Lane Power Plant next to Spartan Stadium. The two new mass timber wings provide 117,000 square feet of modern teaching labs and collaborative space.
“It’s a more environmentally friendly, renewable resource that can go up quite quickly, which also provides a better work environment with better aesthetics and acoustics,” Fanslau said. “It’s an exciting new avenue that could use up a lot of our wood product.”
Workforce investments
Logging is much like the farming industry. The average age of loggers continues to climb.
“We need more new blood in the industry, but it's hard because there are a lot of barriers to entry, particularly from a capital perspective. Equipment is expensive, and attracting labor is difficult,” said Fanslau.
GreenStone is partnering with the Michigan Association of Timbermen and the Great Lakes Timber Producers Association to provide simulator machines in high schools, providing students with a unique opportunity to learn about the timber industry.
“It simulates sitting in a harvester and harvesting timber,” he said. “It's a 3-D experience with video – giving kids a real-life simulation.”
According to Fanslau, educating the next generation about the timber industry, and the career opportunities it presents, couldn’t be more important.
