Few recent periods capture the changing direction of North America's forest products sector as clearly as the past several weeks. Within a short span of time, companies announced permanent mill closures, manufacturing investments, acquisitions, production curtailments, timberland transactions and major industrial projects across the United States and Canada. Viewed individually, these developments stem from different business decisions and local market conditions. Together, however, they provide a timely snapshot of an industry that continues to evolve well beyond the traditional cycle of rising and falling lumber prices.<\/p>\n
Mill closures continue across North America<\/strong><\/p>\n One of the latest announcements came from Hunt Forest Products, which confirmed the permanent closure of its hardwood sawmill in Olla, Louisiana. The shutdown affects around 30 employees and reflects the combination of declining hardwood lumber prices, weaker demand and the limited scale of the operation. The mill had occupied a niche position by processing oversized pine logs that many modern sawmills cannot efficiently handle, reducing marketing options for landowners harvesting larger timber.<\/p>\n A much larger closure was announced by Hood Industries, which will permanently shut its plywood mill in Wiggins, Mississippi, by the end of August. Approximately 260 employees will lose their jobs after Tropical Storm Arthur caused extensive damage to the 56-year-old facility. According to the company, rebuilding the mill would require investment levels that could not be economically justified.<\/p>\n In Oregon, Nordic Veneer also decided to permanently cease operations after more than seven decades of manufacturing. Despite investments in improving efficiency, management concluded that current market conditions no longer supported economically viable production.<\/p>\n Operational reductions have extended into Canada as well. Western Forest Products has prolonged the curtailment of its Cowichan Bay sawmill in British Columbia through September, citing persistently weak market conditions. The suspension affects 54 employees and comes while the company's Chemainus operation remains under indefinite curtailment that began last year.<\/p>\n Meanwhile, International Paper announced the closure or conversion of four North American packaging facilities as part of a broader manufacturing optimisation programme. Rather than reflecting weaker demand alone, the move is intended to consolidate production within a more efficient network while directing investment toward higher-performing operations.<\/p>\n Production capacity continues to contract<\/strong><\/p>\n Recent production data indicate that these announcements are unfolding against a backdrop of gradually declining manufacturing capacity.<\/p>\n In the United States, sawmill production declined during the first quarter of 2026, marking the second consecutive quarterly decrease. While overall output has remained relatively stable since 2023, installed production capacity has continued to shrink as older mills leave the market. Employment has followed the same trend, with sawmill and wood preservation jobs falling for the twelfth consecutive quarter to their lowest level since 2010.<\/p>\n Canada is experiencing similar conditions. Statistics Canada reported that lumber production in April declined both month-on-month and year-on-year. Shipments increased modestly from March but remained below April 2025 levels, suggesting that demand has yet to recover sufficiently to reverse the downward trend in production.<\/p>\n The contrast between shrinking capacity and relatively stable production also points to more intensive utilisation of the remaining manufacturing base, as output becomes increasingly concentrated in larger facilities.<\/p>\n Investment shifts toward higher-value manufacturing<\/strong><\/p>\n Despite the wave of closures, investment activity has remained active, particularly in engineered wood products and downstream manufacturing.<\/p>\n LP Building Solutions has broken ground on a new 350,000-square-foot LP SmartSide ExpertFinish manufacturing facility in North Branch, Minnesota. Scheduled to begin production in the first quarter of 2028, the project will create approximately 125 jobs and become the company's largest ExpertFinish operation. The investment underlines LP's confidence in the long-term growth of prefinished siding products despite softer residential construction markets.<\/p>\n Canfor has also expanded its value-added manufacturing platform by completing the acquisition of PinkWood, Western Canada's largest producer of I-joists. The transaction adds approximately 120 employees and 46 million linear feet of annual production capacity, strengthening Canfor's position in engineered wood products and complementing its existing manufacturing footprint in Alberta and British Columbia.<\/p>\n Mass timber construction also continues to gain momentum. In New York City, the seven-storey Timberburg condominium project in Brooklyn is approaching completion and is expected to become the city's largest mass timber residential development. The project illustrates the gradual expansion of engineered timber into larger urban housing developments, where shorter construction schedules and lower embodied carbon are becoming increasingly attractive.<\/p>\n Timberland investment continues to expand<\/strong><\/p>\n While manufacturers continue restructuring their production networks, institutional investors remain active in the forestry sector.<\/p>\n Gresham House completed its acquisition of a majority interest in Molpus Woodlands Group, creating one of the world's largest timberland investment managers with approximately US$8 billion (EUR 6.8 billion) in forestry assets under management. The enlarged platform spans the United States, the United Kingdom, Ireland, Australia and New Zealand, reflecting sustained interest in forestry as a long-term investment class.<\/p>\n Industrial sites find new purpose<\/strong><\/p>\n Not every shuttered mill disappears from the industrial landscape. In British Columbia, four First Nations acquired Canfor's former Plateau sawmill in Vanderhoof and plan to redevelop the property into a multi-purpose industrial park. The site, which includes rail infrastructure, a quarry and former sawmill facilities, will initially support construction associated with BC Hydro's North Coast Transmission Line before being developed for broader industrial use.<\/p>\n The transaction highlights another emerging trend within the sector: former manufacturing sites are increasingly being repurposed rather than abandoned, allowing communities to retain valuable industrial infrastructure after wood processing operations have ceased.<\/p>\n Weather and operational disruptions add further pressure<\/strong><\/p>\n Operational challenges continue to extend beyond market fundamentals.<\/p>\n Extended drought across Arkansas has allowed harvesting in hardwood bottomlands that are normally inaccessible during wetter years, increasing log supply and contributing to downward pressure on prices as mills introduced purchasing quotas to manage inventories.<\/p>\n Elsewhere in the southern United States, a dust explosion and fire temporarily disrupted operations at Arauco's MDF facility in Arkansas, while another fire caused significant damage to remanufacturing equipment at RFP Lumber in California. Although no serious injuries were reported in either incident, both events illustrate the additional operational risks facing wood processing facilities.<\/p>","protected":false},"excerpt":{"rendered":" Few recent periods capture the changing direction of North America’s forest products sector as clearly as the past several weeks. Within a short span of time, companies announced permanent mill closures, manufacturing investments, acquisitions, production curtailments, timberland transactions and major … Continue reading