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WHAT'S INSIDE
EXECUTIVE COMMITTEE
Bucky Pescaglia, Chairman Missouri-Pacific Lumber Co., Inc.
Stephanie VanDystadt, Vice Chairman Hull Forest Products
Jon Syre, Past Chairman 2022-2024 Cascade Hardwood, LLC
MISSION LEADERS
Sam Glidden, ITS and ITSEF GMC Hardwoods, Inc.
Ray White, Lumber Services Harold White Lumber, Inc.
Joe Pryor, Education Services Oaks Unlimited, Inc.
Rich Solano, Convention Pike Lumber Company, Inc.
Bill Courtney, Membership & Networking Classic American Hardwoods
Rob Cabral, Market Impacts UCS Forest Group
DEPUTY MISSION LEADERS
Chris Rider, Membership & Networking AHC Hardwood Group
Tom Coble, Market Impacts Hartzell Hardwoods, Inc.
Greg Fitzpatrick, Convention Fitzpatrick & Weller, Inc.
Tom Oiler, Lumber Services Cole Hardwood, Inc.
Trent Yoder, Lumber Services Yoder Lumber
Brant Forcey, ITS and ITSEF Forcey Lumber Company
George Swaner, Education Services Swaner Hardwood Co., Inc.
COMMITTEE CHAIRMAN
Sam Glidden, Rules GMC Hardwoods, Inc.
HARDWOOD MATTERS
THE VOICE OF THE HARDWOOD INDUSTRY
National Hardwood Lumber Association PO Box 34518 • Memphis, TN 38184-0518 901-377-1818 • 901-382-6419 (fax) info@nhla.com • www.nhla.com
THE MISSION OF NHLA
To serve NHLA Members engaged in the commerce of North American hardwood lumber by: maintaining order, structure and ethics in the changing global hardwood marketplace; providing unique member services; promoting North American hardwood lumber and advocating the interest of the hardwood community in public/private policy issues; and providing a platform for networking opportunities.
ADVERTISER INDEX
NHLA STAFF
Dallin Brooks, Executive Director dallin@nhla.com
John Hester, Chief Development Officer j.hester@nhla.com
Dana Spessert, Chief Inspector d.spessert@nhla.com
Natalie Thelen, Chief Marketing Officer n.thelen@nhla.com
ACCOUNTING
Desiree Freeman, Controller d.freeman@nhla.com
Jens Lodholm, Database Manager j.lodholm@nhla.com
Carol McElya, Staff Accountant & Administrative Assistant c.mcelya@nhla.com
INDUSTRY SERVICES
Mark Bear, National Inspector m.bear@nhla.com
Tom Byers, National Inspector t.byers@nhla.com
Kevin Evilsizer, National Inspector k.evilsizer@nhla.com
Simon Larocque, National Inspector s.larocque@nhla.com
Brooke Pajkurich, Hardwood Technical Design Director b.pajkurich@nhla.com
Benji Richards, Industry Services Sales Manager b.richards@nhla.com
Drew Snider, National Inspector d.snider@nhla.com
Marty Westeen, National Inspector m.westeen@nhla.com
INSPECTOR TRAINING SCHOOL
Roman Matyushchenko, Instructor of the Inspector Training School r.matyushchenko@nhla.com
MARKETING/MEMBERSHIP
Melissa Ellis Smith, Creative Director m.ellis@nhla.com
Brennah Hutchison, Content Strategist & Editor b.hutchison@nhla.com
Ashley Johnson, Convention and Events Director a.johnson@nhla.com
Darci Shannon, Communication & Outreach Specialist d.shannon@nhla.com
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BALANCING TRADE AND INDUSTRY GROWTH AMID TARIFFS
Tariffs introduce significant uncertainty to our industry. A recent New York Post poll indicates that 70% of Americans believe President Donald Trump has fulfilled his campaign promises. Regardless of individual opinions, he has acted on many commitments, including revisiting trade agreements between the U.S. and other countries. However, our industry still bears the scars from the previous trade war during President Trump’s first term.
On February 1st, President Trump signed executive orders imposing 25% tariffs on products imported from Canada and Mexico and 10% on selected products from China. He acknowledged that Americans may feel the pain from his tariffs, but it will be worth the price to secure U.S. interests. Our industry, however, is concerned about enduring further hardships.
The domestic hardwood lumber industry relies heavily on free trade, with approximately 50% of our furniture-grade hardwood lumber produced in the United States exported globally. During the 2018 trade war, our industry suffered as our products became targets of retaliatory tariffs, leading to a swift market decline. Even years after that trade war ended, hardwood lumber exports to China remained at about 50% of their previous levels.
As of this writing, there is a 30-day pause on implementing the tariffs with Canada and Mexico. However, this delay has led to heightened tensions between the U.S. and its neighboring trading partners. Concerns over trade policies have resulted in strained relations, discussions of potential boycotts, and public expressions of discontent. These challenges reflect the complexities of international trade, and both sides are working toward agreements that address economic concerns while maintaining strong partnerships.
The National Hardwood Lumber Association (NHLA) has received numerous inquiries from media outlets worldwide seeking our
perspective on the economic impacts of these tariffs. In our responses, we strive to represent our diverse membership, recognizing that some view tariffs as a negotiation tool while others value our longstanding partnerships with Mexico and Canada. The term “fluid” frequently arises in our discussions, reflecting the rapidly changing situation. Rest assured, the NHLA remains actively engaged.
We are collaborating with the Hardwood Federation to protect our industry from the potentially harmful effects of tariffs. The Federation is proposing a $450 million relief package to mitigate potential losses due to the enactment of tariffs. Stay informed about tariffs and the work your association is doing by subscribing to our newsletters and visiting our website, nhla.com, for the latest news from the NHLA. You can also connect with the Hardwood Federation at hardwoodfederation.com.
Just as many strive to strengthen America, we hope that together, we can strengthen American hardwoods in the coming years.
Bucky Pescaglia NHLA Chairman
| Missouri-Pacific Lumber Co., Inc.
Persistence Over Insanity: How NHLA is Evolving to Serve You Better
You’ve probably heard the phrase, “The definition of insanity is doing the same thing over and over and expecting different results.” I’ve always disliked that saying because it completely disregards the value of persistence. Yes, in extreme cases, doing the same thing repeatedly with no adjustments will lead to failure. But history proves that great achievements come from those who persistently refine their approach until they succeed.
I’ve been with NHLA for nearly three years, working to create change despite being underfunded and overworked. Progress has been slow, but persistence is paying off. NHLA is improving, and we’re making significant strides to better serve our members.
STRENGTHENING NHLA FROM WITHIN
Success starts with the right people in the right roles, and NHLA now has a strong, dedicated team. We have established core values to guide us:
• Passion Leads to Excellence: If you care deeply about something, you will find ways to improve and grow it.
• Creativity Leads to Innovation: Solutions should accompany problems. Finding new ways to operate fosters progress.
• Hard Work Leads to Integrity: Following through on commitments build trust and strengthens relationships.
• Collaboration Leads to Success: No one can do everything alone—leveraging our collective strengths leads to growth.
• Be Servant Leaders: True leadership is about lifting others and setting an example that encourages improvement.
These values aren’t just words—they guide how we work. To ensure accountability, we’ve implemented weekly scorecards, set quarterly goals, and refined our processes to do more with less. Our mission is clear: to support our members in overcoming industry challenges, such as high production costs and low demand.
OPERATIONAL SUPPORT: MAXIMIZE EFFICIENCY AND REDUCE WASTE
NHLA plays a crucial role in helping members optimize their operations. Our expertise covers every step of the hardwood production process, from tree harvesting to shipping finished products.
We provide essential services, including:
• Rules and certifications
• Lumber inspections
• Quality control consulting
• Grader training
Without NHLA’s guidance, many companies risk losing money and wasting valuable wood. Our team offers expertise in:
• Log bucking, scaling, and grading
• Mill management and optimization (sawing, edging, trimming, and yield recovery)
• Inventory management and benchmarking
• Kiln drying, thermographic scanning, and facility grade certification
Additionally, many of these services are included in our Yield Studies, with 75% of costs covered by the U.S. Forest Service (USFS)—a valuable opportunity for members to take advantage of.
SALES & MARKETING SUPPORT: GROW YOUR BUSINESS
NHLA isn’t just about operations—we also help members expand their market reach. We promote hardwood products to designers and architects, advocate for the industry with legislators, publish key industry materials, and host trade shows and conventions.
Our expertise extends to:
• Sales training and networking opportunities (NHLA Convention, industry events, strategic connections)
• Media management, video production, and social media marketing
• Industry publications, newsletters, and buyer guides
• Collaboration with allied associations (AHEC, HF, RAHC, state and regional organizations)
• Government relations and grant opportunities
By tapping into NHLA’s resources, members can enhance their sales and management strategies, ensuring they don’t miss out on potential growth opportunities.
NHLA IS HERE FOR YOU
NHLA offers more value than many members realize, and we are committed to providing support every single day. If you have questions or need assistance, ask us. You will get a response, excellent customer service, and solutions tailored to your needs.
Our core values ensure that we are not just repeating the same actions, hoping for different results. We are persistently refining and improving to serve our members better. That’s the common ground we all share—not insanity, but determination.
Dallin Brooks NHLA Executive Director dallin@nhla.com
| 901-377-0182
NHLA Inspector Training School’s 208th Graduation: Forging the Future of Hardwood
On February 28, 2025, the National Hardwood Lumber Association (NHLA) celebrated the 208th graduating class of the Inspector Training School. Held at NHLA headquarters in Memphis, Tennessee, the ceremony marked the culmination of eight weeks of intensive training, equipping graduates with the skills needed to succeed in the hardwood industry.
A Message of Encouragement and Industry Impact
John Hester, NHLA’s Chief Development Officer, opened the ceremony by emphasizing the power of a dedicated group. He shared a quote from anthropologist Margaret Mead:
“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it’s the only thing that ever has.”
Hester related this to NHLA’s origins, highlighting how 37 industry leaders came together in the late 1800s to establish lumber grading rules still in use today. Though this graduating class is small, its potential impact is significant.
Commencement Ceremony Highlights
The ceremony featured speeches from industry leaders and NHLA executives, offering guidance and encouragement to the graduates.
In the photo, from left to rIght: peyton mctaggart (pIke lumber co., Inc), braden rees (Independent), roman matyushchenko, nhla Its Instructor and Jeremy lawrence dunn (Independent)
Program Overview:
• Welcome Address – Dallin Brooks, NHLA Executive Director
• Instructor’s Message – Roman Matyushchenko, NHLA ITS Instructor/Associate Dean
• Graduation Address – Drew Snider, NHLA National Inspector, Class #193
• Class President’s Message – Jeremy Lawrence Dunn
• Graduate Introductions & Certificate Presentation –Roman Matyushchenko
Industry Outlook and Career Opportunities
Throughout the ceremony, speakers stressed the growing demand for skilled professionals in the hardwood industry. With an aging workforce and increased automation, trained lumber inspectors play a key role in maintaining quality standards. Graduates were encouraged to continue learning, stay engaged with NHLA, and explore career paths in grading, forestry, wood science, and carbon technology.
Dallin Brooks highlighted the industry’s resilience and the importance of NHLA-trained inspectors in ensuring sustainability and product quality. With selective harvesting and efficient production techniques, North American hardwoods remain a renewable and essential resource.
Words of Advice from Industry Leaders
Instructor Roman Matyushchenko reminded graduates to always keep their Rules books with them, emphasizing that knowledge of grading standards is key to their success. Drew Snider encouraged
them to be confident, soft-spoken, and to work with integrity— qualities essential for building a strong reputation in the industry.
The 208th Graduating Class
The 208th NHLA Inspector Training School class now joins a network of professionals dedicated to upholding industry standards.
2025 Graduates:
• Jeremy Lawrence Dunn (Independent)
• Peyton McTaggart (Pike Lumber Co., Inc.)
• Braden Colby Rees (Independent)
Despite being a small class, these graduates have demonstrated commitment and expertise, preparing them for rewarding careers in the industry.
NHLA’s Commitment to Training and Excellence
The NHLA Inspector Training School remains a cornerstone of the organization’s mission to support and grow the hardwood industry. This program trains professionals who not only master lumber grading but also contribute to sustainability, conservation, and industry innovation.
Looking Ahead
Graduates now enter an industry rich with opportunity, backed by a network of NHLA alumni and professionals. Whether they pursue careers in grading, quality control, or leadership, their knowledge and skills will help shape the future of hardwood.
Congratulations to the 208th graduating class—your dedication and hard work have laid the foundation for a bright future in the industry!
SUPPORT THE NEXT GENERATION OF INDUSTRY LEADERS
The NHLA Inspector Training School Educational Foundation (ITSEF) is dedicated to providing scholarships and opportunities for aspiring professionals. Your contribution helps invest in the future of the hardwood industry. To learn more or make a donation, visit our ITSEF webpage or scan the QR code below.
Together, we can shape the future of the hardwood industry!
The Power of Influence
My daughter, Maddey, graduates high school in May. She’s going to Pepperdine University and wants to pursue a career in the film industry. Now, I will probably never set foot on a Hollywood set, but through the values, work ethic, and principles my wife and I have instilled in our daughter, I could possibly have an indirect impact. Or at least I’m going to tell myself that.
We can apply this thought to our industry. An industry that, much like a parent, shapes the world in ways that aren’t always immediately visible. Hardwood is the silent foundation of countless industries, influencing spaces, experiences, and even storytelling in ways that most people never stop to consider.
When we watch a movie, we focus on the actors, the cinematography, and the storyline. But how often do we notice the hardwood that surrounds the scene? Whether it’s the rustic hardwood floors of a cabin, the walnut desk in a high-powered office, or the oak paneling of a grand library, hardwood plays an unspoken role in storytelling. It adds warmth, history, and authenticity to a scene, silently shaping the emotions and aesthetics of a film.
My daughter is planning on entering a completely different industry. But the discipline, integrity, and purpose she carries with her are rooted in what her mom and I have taught her. In the same way, the
hardwood industry doesn’t just sell lumber. We provide the materials that shape homes, businesses, and even the entertainment industry in ways people rarely acknowledge.
As industry professionals, we should take pride in the fact that our influence extends far beyond the direct customers we serve. The choices we make in sustainability, craftsmanship, and advocacy flow into areas we may never expect. Maybe even onto a film set where hardwood becomes part of a story told for generations.
In the end, whether through a child stepping into the world or through the materials we provide, our impact is never just our own. It stretches far beyond us, shaping the future in ways both seen and unseen.
Oh, and congratulations, Maddey! We love you, and we’re so proud of you.
Love, Dad
John Hester Chief Development Officer
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The Hardwood Federation Fly-in 2025
Join Us in D.C. and Make Your Voice Heard!
By DANA COLE, Executive Director of the Hardwood Federation
The annual Hardwood Fly-In to D.C. is quickly approaching! This year, we will meet in Washington D.C. from May Tuesday, 13 through Thursday, May 15, to take our story to the Hill. Please make plans to join us as we advocate for the U.S. Hardwood industry in Washington, D.C!
An advocate is a person who publicly supports or recommends a particular cause or policy. Advocates are also known, in government and politics, as lobbyists. Whether you call it advocating or lobbying, the goal is still the same: to educate or persuade government members, including members of Congress, to enact legislation and policies that benefit their group.
Advocacy can take place at any level of government. Have you ever disputed a parking ticket? Signed a petition for a new stop sign? Met with a school principal about a bully who pushed your child during recess? What about applying for and defending a permit for your business? You are an advocate for yourself and for the things you care about—your family, your community, and your business.
As the level of government moves up, the role of the advocate becomes more critical. The higher the office . . . local to state to federal . . . the more issues elected officials and full-time government workers must handle daily. Not only are there more matters to consider, but they also become increasingly complex the closer to Washington one gets.
Trade associations, like the Hardwood Federation, are essential to the business community because they can focus day in and day out on a specific set of problems and consistently communicate with and educate policymakers on the impacts proposed legislation and regulation can have on employers and employees in their communities. Trade associations also develop consistent messaging representing general industry agreement on important issues. In a perfect world, everyone in the industry can deliver the same message and strengthen the argument to make policy that best supports hardwood businesses. Your day-to-day focus is on business, not on politics. The Hardwood Federation focuses on politics to make your job easier.
The Hardwood Federation team is proud to represent the industry in Washington. But we can’t and don’t do it by ourselves. The Hardwood Federation Fly-In to Washington D.C. has always been a highlight of our advocacy program. The second Trump Administration is moving at a blistering pace, making decisions and initiating policies that could significantly impact the U.S. Hardwood industry. The noise in D.C. is loud and unending, but we continue to raise our voices over the din. We urge you to join us in May. Meet your federally elected officials. Tell your story—network with your peers. Please help us make the case for policies that work FOR the hardwood industry, not against it.
The Fly-In is an excellent opportunity for members of the hardwood industry to educate members of Congress about the U.S. hardwood industry and let their Members of Congress know just how businesses and employees are affected by the decisions being made on Capitol Hill. The impact of Trump’s trade policies and tariffs on our sector will undoubtedly be our top priority. A close second will be restoring essential tax cuts that support our hardwood businesses. Regulatory and transportation issues could also rise to the top. In this fast-paced environment, it is difficult to say for sure. But we are confident the most current concerns will be on the list.
From experience, direct communication with knowledgeable industry members is key to establishing and growing legislative contacts and their awareness of the Hardwood industry. Your participation is essential . . . and very much valued. You can learn more about the Hardwood Federation, priority issues, and the Fly-In at www.hardwoodfederation.com Please reach out to us if you have questions or thoughts.
The Fly-In is an excellent opportunity for members of the hardwood industry to educate members of Congress about the U.S. hardwood industry and let their Members of Congress know just how businesses and employees are affected by the decisions being made on Capitol Hill.
Forest Products Market Impacts
By DR. JOHN HATCHER, JR., PH.D., CF, Executive Director, North Carolina Forestry Association
New tariffs and the European Union Deforestation Regulation (EUDR) are reshaping the hardwood industry. This article examines their immediate impact on trade, pricing, and market access—and what businesses must do to adapt.
The forest products industry in the U.S. is currently monitoring several factors that will undoubtedly affect our collective market outlook. The two most pressing factors are the current administration’s impending tariffs on imports from Canada, Mexico, and China and the implementation of the European Union Deforestation Regulation (EUDR). In this article, we explain these factors and their role in potential market impacts.
TARIFFS
The details surrounding the tariff decisions are rapidly developing. In early February 2025, President Trump announced a 30-day delay in tariffs targeting all imports from Mexico, China, and Canada with a 25% rate, except for a 10% rate on energy imports from Canada. In late February, he announced that the tariffs would proceed once the 30-day reprieve expires.
WHAT WILL THIS MEAN FOR THE FOREST PRODUCTS INDUSTRY?
If these tariffs proceed as planned, many individuals in the forest products industry who regularly conduct business in these countries will
be impacted. The hardwood industry is specifically concerned as the potential of history repeating itself gets closer to becoming a reality.
In 2018, these very same tariffs severely impacted the hardwood industry. In response to the first Trump administration’s tariffs on Chinese goods, China imposed retaliatory tariffs of up to 25% on American hardwood products exported to China. The hardwood industry was immediately impacted, suffering an immediate loss of more than $1.045 billion in lumber sales to China during the trade war years and a lasting trade reduction valued at over $730 million every year, even after the tariffs were removed. Domestic prices also plunged due to a lack of export markets, creating additional pain and long-term damage to the industry. The hardwood industry has yet to recover from the market loss that accumulated throughout this time. There is concern that the industry won’t be able to sustain a similar situation that negatively affects its ability to manufacture and export products and provide much-needed jobs to individuals in rural America.
“As a member of the forest products industry, our stakeholders and staff hope tariffs are not increased, as a significant percentage of lumber products are exported,” said Jess Parton, Timber Procurement Manager, Gilkey Lumber Company. “If significant tariffs are placed on hardwood lumber exported to China, the effects could be catastrophic. Currently, approximately 50% of my company’s kilndried grade lumber is shipped into China, and any significant tariffs placed on U.S. exported lumber to China could dramatically impact company profits, sustainability, employment security, and growth.”
Industry experts share that the full impact of these impending tariffs on lumber markets won’t be felt immediately. Still, we should be prepared for the long-term effects that could reshape the dynamics of our industry.
EUROPEAN UNION DEFORESTATION REGULATION (EUDR)
The EUDR is a regulation targeting deforestation and forest degradation by demanding rigorous supply chain transparency. Companies importing or trading forest products in the EU must demonstrate that their commodities—such as pulp, paper, wood, and biomass—do not contribute to deforestation or degradation. This requires geolocation data, due diligence statements, and proof of sustainable harvesting practices. The EUDR, which was initially scheduled for implementation in December 2024, was delayed by one year to allow companies more time to prepare.
However, preparing for compliance isn’t a quick fix. These tasks often require custom development, extensive testing, and deployment timelines that can extend over several months or more.
panies and suppliers in the U.S. forest industry to comply with, especially small operations in remote areas,” said Parton. “Forest industry operations often cannot collect, store and analyze detailed information related to the origin of the supply, or provide detailed documentation on their land use practices.”
For many companies, these regulations are an added burden that can affect market impacts. If you are a forest products company conducting business with any companies in the EU, you must plan to comply with these new regulations. Failure to comply could lead to negative revenue impacts, severe penalties and fines, and reputational damage that could affect long-term business relationships.
STAY INFORMED AND PREPARED
This year is off to an interesting start, to say the least, but it’s not uncommon for the forest products industry to face a few curveballs now and then. In a time when the economic landscape is constantly evolving, the best thing we can all do is to stay informed and prepared so that we are equipped to adapt to any changes that come our way. Tariffs and new regulations might unleash fears of the unknown. Still, they also introduce opportunities for companies to pivot business strategies and work in innovative ways they haven’t thought of before.
Trade policies directly affect hardwood exports, but broader economic forces also shape the industry. For a wider look at market trends, see the "Steady Growth or Economic Shock?" article in this issue.
Steady Growth or Economic Shock? The Hardwood Industry in 2025
The hardwood industry’s future depends on more than just trade policy. Inflation, labor trends, and consumer demand also drive market conditions. This article explores the economic outlook for 2025 and what businesses should anticipate.
By DR. BILL CONERLY, Business Economist
Recent political changes contrast with a fairly stable economy. The United States had solid economic momentum entering the year, and policy turmoil will probably have less impact than news reports would suggest. The hardwood industry will likely see relatively steady conditions, with tariffs constituting the greatest uncertainty about the outlook.
Last year’s economic growth surprised many people who had expected higher interest rates to sock the economy. Instead, most key measures, including GDP and employment, looked fine relative to their long-run trends. Major forces of expansion and contraction, as well as inflationary pressures, appeared balanced. Without political change, the forecast would be a simple extrapolation of recent trends. But, of course, politics has complicated the outlook.
This article will begin with key political issues but strictly from a forecasting perspective. After that, the article will roll into the major economic sectors that affect the hardwood lumber industry.
POLICY EFFECTS
Although political zealots of either side will claim that good policies will have hugely positive effects and bad policies hugely negative effects, the forecaster must quantify just how good or how bad policies will be. Usually, the effects are much smaller than the claims of politicians on both sides.
Tariffs will likely have the biggest impact on the hardwood lumber industry of any policy change from the Trump administration. Unfortunately, we do not know how the tariff controversy will play out. When tariffs are imposed by one country, other countries usually retaliate. Sometimes, the retaliation is broad-based, affecting all of a country’s products. Frequently, though, it is targeted at a key industry with strong political support. For example, in 2018, China retaliated against U.S. tariffs by adding tariffs on U.S. soybeans (our largest agricultural export to China), automobiles, and aircraft. China also set lower tariffs on all goods or a wide range of goods. The hardwood lumber industry was hurt by over one billion dollars worth of sales.
Last year, the total lumber and mill product (including softwood) exports came to $3.4 billion. Our top three export destinations are the countries targeted by President Trump: China, Canada, and Mexico. Together, these nations bought 59 percent of our lumber exports. It’s impossible to know the ultimate tariff impact on hardwood lumber, but it could swing industry sales dramatically. Most likely, tariffs will have a harsh impact and then be dialed back somewhat, but with a lasting change somewhat milder than the initial effect.
Immigration restrictions will likely reduce the growth rate of the labor force, though an actual reduction of available workers seems unlikely. This will have the greatest impact on agriculture, construction, and hospitality businesses.
Deregulation will make business a little easier in some sectors, partly because of Trump’s administration policy and partly because of recent Supreme Court decisions about government rule-making. The greatest effects will be on energy, transportation, and construction activity.
Layoffs of government employees will have minimal impact on the aggregate economy. Although some individuals will have a difficult time transitioning to the private sector, the economy is generally labor-constrained. Most laid-off workers will find employment elsewhere.
GENERAL ECONOMIC OUTLOOK
In the last two years, the U.S. economy has moved from pandemic recovery to trend growth. Employment surged with increased immigration during the middle of President Biden’s term of office. Then, immigration declined in 2024, even before the election. Now, the economy runs with constrained labor force growth.
Higher interest rates brought inflation down, but not entirely to the Federal Reserve’s target. That last little bit of inflation is proving stubborn. With solid job growth and unemployment steady at a low rate, the Fed sees no reason to ease interest rates any time soon.
“Business leaders will generally find that in this environment, improving their own activities is more important than monitoring the economy, except for the tariff issue. ”
This pace of growth, inflation, and interest rates could continue for quite a while. The resolution of the tariff issue will likely determine whether the economy accelerates or slows, with steady growth the most likely path.
ECONOMIC OUTLOOK FOR KEY SECTORS
The industrial sector of the U.S. economy has run flat for the last two years. Total manufacturing production has hardly changed. Consumers have prioritized services in recent years, meaning that the need for pallets and crates has not changed much. A drop in interest rates would be needed to boost industrial activity, and that’s unlikely this year.
Exports, in general, will edge upward slightly, absent the effect of tariffs mentioned above. Global economic growth is running at a stable three percent, inflation-adjusted. However, the dollar has been strong on foreign exchange markets, which raises the price that our foreign buyers must pay in terms of their own currency. Thus, U.S. exports have not grown as much as global spending. The base case indicates continued sluggish export growth, but any forecast must be taken with the tariff uncertainty in mind.
Residential construction will likely be level with last year until interest rates drop. The industry suffers from the lingering effects of the low mortgage rates of 2020 and 2021. First-time home buyers typically find houses offered for sale by move-up home buyers—people looking for bigger, better, or newer homes. But selling a house with a three percent mortgage to buy a house with a seven percent mortgage leaves little room for improving one’s home. Thus, existing homeowners stay put,
and the first-timers are stuck in apartments. The bright news for the hardwood lumber industry is that remodeling makes more sense than it ever did. People can keep their low mortgages and use their home equity to borrow what they need to upgrade their current home. That could likely stimulate demand for flooring, cabinets, and new furniture.
Finally, domestic furniture sales could be boosted by U.S. tariffs. That would hardly offset the loss to our export market, but it could cushion the downturn.
BUSINESS IMPLICATIONS
Business leaders will generally find that in this environment, improving their own activities is more important than monitoring the economy, except for the tariff issue. Given that huge uncertainty, hardwood business leaders should think through how their own particular lines of business would be impacted by both U.S. tariffs and retaliatory tariffs. Flexibility to handle what comes next should permeate an organization, ranging from sales to purchasing to finance and personnel. Industry veterans have survived some wild rides in the past. With focused attention, they will survive 2025.
Tariff uncertainty is a key factor in 2025. For a deeper dive into trade policy’s immediate effects, refer to the "Forest Products Market Impacts" article in this issue.
Dr. Bill Conerly is a business economist and Forbes senior contributor with a Ph.D. in economics from Duke University. Learn more at www.ConerlyConsulting.com
THE ROLE OF NHLA IN STANDARDIZING HARDWOOD LUMBER GRADING
By DANA SPESSERT, Chief Inspector
The National Hardwood Lumber Association (NHLA) plays a crucial role in the hardwood lumber industry by establishing standardized grading rules. These rules have helped bring consistency and fairness to the market and contributed to the sustainable management of hardwood resources. By ensuring a uniform system for evaluating lumber quality, the NHLA has stabilized the industry while promoting the efficient use of raw materials.
Before the NHLA was founded in 1898, the hardwood lumber industry faced significant challenges due to the lack of a standardized grading system. Lumber buyers and sellers often had conflicting definitions of quality, leading to disputes, inefficiencies, and financial losses. Inconsistent grading also led to waste, as valuable hardwoods were sometimes discarded or underutilized.
Industry leaders recognized the need for uniformity and established the NHLA to create a common set of grading rules. These rules provided clear definitions for various grades of hardwood lumber, ensuring that all stakeholders—from sawmills to manufacturers— could operate fairly and transparently.
In more recent years, a few practices have confused hardwood consumers about the grading system and created issues within the hardwood industry. One of the most spoken about is the wane limitations on FAS, FAS 1 Face, and Selects. The common theme seems to be that the customers will not buy lumber with “all that wane.”
This is an important issue, and while I never want to alienate hardwood customers, my experience grading disputed lumber and resolving issues has shown me that customer feedback is usually valid.
For example, wane limitations are to be applied to the boards only after the grade has been established; this is a step that leads to many mis-graded boards. Also, although it's technically possible to have exactly half the length of wane on both edges of a FAS board, achieving this is more challenging than meeting the required 10/12 yield—which is what customers are actually paying for (83 1/3% clear).
There is not much difference in the 1 Common side of F1F or Selects, so to allow all the wane you can have, the required yield and cutting sizes must be achieved, and then you would apply the wane limitations. Example: 5 ¾” x 8’ FAS on the better face, reverse side does not exceed wane limitations of 1/3 width x ½ length, but 1 Cutting would need to be 4” by 8’ to get the 32 C.U. required to achieve 1 Common, and there is only 30 2/3 C.U., so the board is a 2a Common.
The issue is not a lack of hardwood inspectors. It is a lack of skilled hardwood inspectors. Over the past 20+ years, the NHLA Inspector Training School has dramatically decreased in attendance, resulting in lower-skilled inspectors. While someone can learn to grade hardwood by simply reading the Rules Book, that doesn’t mean they can correctly apply the Rules to the boards.
EDUCATIONAL OPPORTUNITIES
APR
April 21-May 2
Inspector Training School Online Program MODULE 1 (Hybrid course)
A flexible, hybrid learning program combining online instruction and on-site hardwood lumber grading training. Designed for self-motivated students looking to minimize travel while gaining hands-on experience.
Week 1: Online instruction covering foundational grading concepts.
Week 2: On-site training at Yoder Lumber Company, focusing on hands-on grading with species like oak, maple, cherry, and poplar.
Venue: Yoder Lumber Co., Inc. Location: Millersburg, OH
Instructor: Roman Matyushchenko, NHLA ITS Instructor
MAY
May 12-23
Spanish Language
Intro to Hardwood Lumber Grading
For Spanish speakers an Intro class to gain a basic understanding of the NHLA hardwood lumber grading rules and how the rules affect the value of lumber. Housing and week-day meals are included.
Venue: NHLA Headquarters Location: Memphis, TN
Instructor: Roman Matyushchenko, NHLA ITS Instructor
JUNE
June 16-19
Intro to Hardwood Lumber Grading
Intro class to gain a basic understanding of the NHLA hardwood lumber grading rules and how the rules affect the value of lumber.
Host: Ohio Forestry Association Venue: Yoder Lumber Co., Inc. Location: Millersburg, OH
Instructor: Benji Richards, National Inspector
JUNE
June 25-27
Lumber Drying Class
A 3-day course focused on Kiln Drying. You will develop an understanding of drying wood for value and defect reduction. Speakers include Dr. Adam Taylor, University of Tennessee Extension, Mr. Dana Spessert, NHLA Chief Inspector; as well as kiln drying expert Bob Pope from SII Dry Kilns. Yard personnel, kiln operators and supervisors should attend.
Venue: NHLA Headquarters Location: Memphis, TN
AUG
August 4-6
Walnut Grading Rules
Walnut is one of those species with a number of exceptions to the Rules. It is also one of the most highly valued species. Join us in Memphis for instruction on getting the most value out of your walnut production.
Who should attend: Experienced graders and inspectors, who grade walnut or will grade walnut.
Venue: NHLA Headquarters Location: Memphis, TN
AUG
August 11-22
Inspector Training School Online Program MODULE 1
Two weeks of hands-on training.
Venue: NHLA Headquarters Location: Memphis, TN
Module 2: Online study Module 3: Three weeks handson training and final testing at NHLA headquarters.
Instructor:
Roman Matyushchenko, NHLA ITS Instructor
August 27-29
Intro to Hardwood Lumber Grading
Intro class to gain a basic understanding of the NHLA hardwood lumber grading rules and how the rules affect the value of lumber.
Venue: NHLA Headquarters Location: Memphis, TN
Instructor: Roman Matyushchenko, NHLA ITS Instructor
HARDWOOD MARKETS MATTER
Hardwood Markets Matter, and it is important for NHLA to share market details of the entire Hardwood Industry. We appreciate the support of allied associations and publishers in gathering and sharing this important market information that can help you understand the complete hardwood industry picture.
www.hardwoodreview.com
U.S. hardwood lumber export volumes rose just 6% in 2024, after falling to a 13-year low in 2023, making 2024 the second-slowest year for exports since 2010. However, U.S. hardwood lumber exports did rise in 2024 to Canada and every major trading region. Vietnam was far and away the fastest growing market for U.S. hardwood lumber in 2024, by volume, expanding at 10 times the rate of China, even though it remained just 43% the size of the Chinese market. Except for Japan, other secondary Asian markets also grew nicely in 2024, with a combined net increase of 10 million board feet (MMBF) (26%), three times the volume increase to China. Shipments swelled to Mexico in the summer, but fell back in each of the last five months of the year, leaving the year-end total just 6 containers higher than in 2023. Combined shipments to secondary Latin American markets were up 1.5 MMBF (14%) from 2023 levels. Volume growth to the UK in 2024 was eight times larger than to
2024 Change in Lumber Exports, by Region
Ireland, the next fastest-growing European market. In fact, the volume growth to the UK was 50% larger than the combined loss to the 12 regional markets that contracted in 2024.
Red and White Oak accounted for 90% of the net increase in global exports in 2024, including 92% of the growth to Europe and 88% of the growth to Asia. Oak also dominated growth in shipments to Canada and the Middle East/North Africa (MENA), though to a slightly lesser extent. Red Oak was the faster grower to most markets, but White Oak accounted for most of the growth to Canada and Europe.
www.hmr.com
The HMR Demand Index (HDI) is a feature in HMR Executive® that illustrates monthly trends in reported demand from 10 major domestic markets for hardwood lumber. Components of the index are color coded with various shades of blue when demand is slow, they transition to gray when demand is fair, and then to light red and deep red when demand moves from good to strong.
Index for February, which is published the first week of March.
HMR Demand Index (HDI)
Cabinets
Residential Flrg.
Truck Trailer Flrg.
Upholst. Furniture
Wood Furniture
Moulding/Millwork
Wood Components
Board Road
Pallets
Railroad Ties
RTA 2025 Wood Tie Outlook: A Strong Finish to 2024, Uncertainties That Could Shape the Market Ahead
By Nate Irby, Ph.D. and Kristen McIntosh, Railway Tie Association
The wood crosstie and timber market closed out 2024 on a high note, driven by robust purchases, increased production, and a recovery in inventory levels (Figure 1). Looking ahead, the Railway Tie Association’s (RTA) 2025 outlook projects steady wood tie demand through 2026. However, a mix of potential headwinds and tailwinds still presents uncertainties that could shape the market’s trajectory (Table 1).
Table 1
New Wood Crossties (in thousands)
LABOR MARKET TRENDS IN 2024
In 2024, the job market stabilized with an unemployment rate around 4.1 percent over the last several months, while the labor force participation rate finished the year at 62.5 percent. In total, the U.S. economy added about 2.2 million jobs. But the manufacturing sector—and wood manufacturing specifically—lost about 1 percent of its workforce (Table 2).
Table 2
Employment Change: Dec. 2023 to Dec. 2024
KEY DRIVERS OF A STRONG 2024
Several factors contributed to a strong 2024:
• The U.S. economy is strong, with a predicted annual GDP growth rate of about 2.8 percent for 2024.
• Interest rates also moderated due to disinflation.
• A strong demand for ties was timely for many hardwood saw mills, as they experienced less than ideal demand for many other commodities: flooring, pallet stock, lumber, etc., through out 2024.
• Additional demand, partly attributable to Consolidated Rail In frastructure and Safety Improvements (CRISI) grants for short line railroad improvements and unforeseen natural disasters forcing railroads to rebuild to restore service.
THE ROLE OF TARIFFS AND EXCHANGE RATES
Tariffs aim at creating more jobs in domestic manufacturing. However, this intention may not work if the U.S. dollar appreciates against the currencies of the United States’ trading partners. If the dollar depreciates, consumers will face increased prices not only due to tariffs but also due to dollar depreciation, as they must spend more dollars for the same foreign product. This may cause inflation to spike more than anticipated from the import duties themselves, potentially forcing the Federal Reserve (FED) to change course from lowering interest rates to holding or even increasing their rates.
CHALLENGES FACING HARDWOOD SAWMILLS
Long-term hardwood sawmill health is a formidable concern as the number of operators that closed in 2024 is a direct reflection of the contraction of the marketplace, overall. Total domestic consumption of hardwoods for 2024 is estimated at just below 6 billion board feet (Source: Hardwood Market Report), compared to double that at the turn of the century (1999=12.9 billion board feet). Figure 2 illustrates the stagnation of hardwood sawmill outputs via the Hardwood Market Report Demand Index. With fewer operators in place today, and with any slight change or disruption in tie demand, remaining operators will not be able to respond rapidly, thus creating a potential for a shortterm shortage is plausible.
IMPACT OF THE CRISI PROGRAM
Additional questions with a direct impact on tie demand remain about the CRISI program. Early RTA estimates suggest that this program contributed to tie demand of more than 0.5 million ties in 2024. It is not clear to what extent the new administration will alter the CRISI program. Railroads in the Southeast lost nontrivial portions of their network with the potential to disrupt shipping to some manufacturers. It is unclear whether these railroads will rebuild and to what extent. But if they do, there could be a higher demand for ties due to that reconstruction.
CONSUMER DEMAND AND RAILROAD PERFORMANCE
Consumer demand is important for railroads. Demand for finished goods translates to intermodal traffic, transporting vehicles, and building materials for housing—such as lumber—among others. During the last decade, the share of intermodal carloads rose from 47 percent to 55 percent, while share of industrial materials (coal, metallic and non-metallic materials) declined from 31 percent to 21 percent. With coal production predicted to be only marginally up in 2025 and 2026, as well as other industrial activity, the shipment of consumer-related products becomes an increasingly larger portion of the railroads’ revenue. This in turn provides funds for track maintenance and tie demand.
In 2024, strong consumer spending manifested itself in higher intermodal traffic on the railroads, increasing by 9.3 percent and more than offsetting the decline in shipments of coal and other industrial materials (Source: Association of American Railroads, week 52 report).
UNCERTAINTIES FOR 2025 AND BEYOND
However, with the incoming administration, uncertainty rises for the future course of inflation, interest rates and, potentially, economic growth. While there is increased uncertainty about to what extent the proposed policies will be implemented, RTA assumes the following in its outlook:
• Only selective “surgical” tariffs.
• Minimal disruption from workforce immigration policies.
• Continued Federal Reserve policies, including two interest rate cuts in 2025 (Source: FED dot plot).
• A reduction in CRISI funding to half of 2024 levels by 2026.
OUTLOOK FOR TIE DEMAND
In 2026, RTA incorporates the reduction of the funds available through the CRISI program to about half of 2024 levels. RTA’s tie demand forecast is outlined in Table 1.
Figure 2
www.nwfa.org
EXPECTED DEMAND BY DOMESTIC SPECIES IN 2025
For domestic species, white oak remains the dominant selection, with nearly 70 percent of respondents to Hardwood Floors magazine’s NWFA Industry Outlook survey expecting demand to increase in 2025.
www.ahec.org
2024 US Lumber Exports up 6% Globally from 2023
By Tripp Pryor, International Program Manager, AHEC
The Year-End Export Statistics have just been released, and while we didn’t reach the trade levels of 2022 or even 2020, it looks like global lumber markets started to turn the corner in 2024. Several of our largest export markets: China, Canada, Vietnam, the UK, and the Middle East all increased their imports of American hardwood lumber. China is only up 1% in total, but significantly increased their imports of red oak lumber (+23% to 171 million board feet total). This increase was countered a bit by a drop in white oak (-14% to 37 million board feet) as China buys more white oak from Russia and Europe.
Canada is up 7% thanks to a 61% increase in white oak exports from 35 million in 2023 to 56 million board feet in 2024. The United Kingdom is another country that significantly increased their imports of American white oak lumber last year. 32.5 million board feet of white oak went to the UK in 2024, a 50% increase from last year. Total US hardwood lumber exports to the UK were up 20% last year.
Vietnam had a strong performance in 2024 and imported 177 million board feet of American hardwood lumber, a 23% increase
and the best year since 2021. Every species of lumber saw growth, including a 27% jump in white oak (to 44 million board feet), 47% increase in red oak (25 million bf), and 48% for alder (15 million bf).
AHEC is planning a busy schedule of events to promote the American hardwood industry in 2025, and we look forward to creating opportunities for your company to develop your international markets. For more information on AHEC events, please feel free to reach out to me at tpryor@ahec.org , and check out our website, www.ahec.org for a full event calendar.
NHLA JOB BOARD
Here you will find current industry job listings. To see more details of the job or to post a job, visit www.nhla.com/resources/careers-center
CNC GRINDER OPERATOR – SAW FILER
KAHOKA, MO
Yoder Saws Inc. is seeking a CNC Grinder Operator for a saw filer position involving hammering saws. No prior experience is required, as all training will be provided on the job.
HOW TO APPLY
Please send your resume to yodersaws@yahoo.com. For inquiries, call 660-956-2064.
HARDWOOD LUMBER INSPECTOR
GALETON, PA
Patterson Lumber Co., Inc. is a fourth-generation family operated hardwood sawmill producing 10 million feet annually. Its North Central Pennsylvania location is ideal for outdoor enthusiasts, making it a top destination for hunting, hiking, fishing and star gazing.
We are seeking to add a Lumber Grader for our kiln dried inspection line. The Hardwood Lumber Grader is a vital position in the lumber production process. They accurately inspect and properly grade hardwood lumber to the standards set by the NHLA and in-house standards.
HOW TO APPLY
Please send all questions, resumes & applications to plclbrpa@penn.com.
HARDWOOD LUMBER INSPECTOR
INDEPENDENCE, VA
Woodgrain is looking for an experienced Hardwood Lumber Inspector for our Independence, VA sawmill to join our team! The Hardwood Lumber inspector is a vital position in the lumber production process. They accurately inspect and properly grade hardwood boards to the standards set by the NHLA and in- house standards. The Grader is responsible for sorting through the lumber on the grader chains and marks out the common boards, oversize, and any special trimming that is needed. Grader examines both faces of a board then assigns and marks a grade on the board so that correct trimming decisions are made to increase the value of each board.
HOW TO APPLY
Please send all questions, resumes & applications to michael.anderson@woodgrain.com.
SAWYER
BEACH LAKE, PA
Reining Forest Products is a family run sawmill that has been operating since 1944. We specialize in Softwood industrial and wholesale lumber but cut both soft and hard woods. We are seeking a sawyer with 3-5 years of experience cutting softwood or hardwood. Ownership of saw maintenance is a must. If interested, give us a call to discuss joining our team.
HOW TO APPLY
Please send all questions, resumes and applications to steph@reiningforestproducts.com.
