10 May 2025
,Austria
Understanding the value of an acre of timber is becoming increasingly important as forest landowners navigate changing markets, shifting demand, and new climate-related revenue streams. Timber prices no longer depend solely on the age of the tree or species - they are shaped by proximity to factories, environmental policies, and the global push for decarbonization.
Timber pricing is based on the law of supply and demand. Timber near sawmills or pulp mills has a higher price due to lower transportation costs. Similarly, the volume and type of products that a stand can produce, such as lumber or pulp, have a significant impact on the value per hectare. Plantation pine stands cut at 25-35 years of age offer some of the highest returns, while natural stands with high-quality hardwood can yield even more.
The harvesting strategy also matters. Clearcuts tend to provide the highest volume and revenue per acre. Thinning, on the other hand, produces less revenue but provides an earlier financial return, making it useful for long-term cash flow planning. Market timing and land management objectives play a large role in determining the best approach.
In 2022-2024, clearcut pine harvests on plantations over 26 years old and producing 80-105 tons per acre experienced a drop in prices in 2023 due to oversupply, but recovered in 2024 with a rebound in lumber demand. Thinning on these plantations, which produce mainly pulpwood and wood chips, yielded different returns: young plantations (16-20 years old) earned less, while plantations aged 21-25 years brought higher prices due to better wood quality.
The picture was different for natural pine stands. Clearcuts, despite having higher average tonnage per acre (90-110), faced a steady decline in prices, which is explained by the weakening hardwood and pulp markets. However, harvesting in these stands increased in value due to high demand for pulp and higher harvest volumes compared to plantations.
Compared to the historical figures of 2017-2019, when the cost of clearcutting on plantations averaged USD 1,542-1,694 per acre, in 2022-2024, the cost of plantations increased, driven by inflation and demand for lumber. Conversely, the natural value of stands has declined slightly, indicating a possible market saturation.
The new carbon economy is transforming forest land from a source of raw materials to a potential climate asset. Forest plantations can now generate income through carbon sequestration initiatives or biomass production for carbon capture energy projects. With the global carbon dioxide sequestration (CDR) market projected to reach US$100 billion annually by 2030-2035, new revenue streams are opening up.
Innovations such as biodiesel produced from wood waste to sequester carbon in the soil could shift demand away from traditional pulp and paper wood markets. Meanwhile, large-scale BECCS (bioenergy with carbon capture and storage) projects, such as the Drax wood-fired power plants in the southern United States, are creating demand for woody biomass. While these trends offer new opportunities, they also introduce uncertainty, especially if new revenue sources such as carbon credits fail to fully replace traditional market-based revenues.
Policy continues to play a key role. Initiatives such as the EU's 55% emissions reduction target by 2030 and the US investment in carbon capture ($2.54 billion by 2025) support wood's role in sustainable development. However, uncertainties, such as the expiration of the US biodiesel tax credit, could lead to volatility in biomass-related markets.
The estimated profits in 2022-2024 illustrate the profit potential of logging:
However, these figures are only a starting point. Soil quality, access to roads, and proximity to processing facilities can significantly change the value of timber at the local level.
Ultimately, forest owners must adopt balanced strategies that take into account both traditional sources of income and climate-related opportunities. Staying informed, implementing sustainable practices, and adapting to policy changes are essential to maximizing the long-term value of forests in a complex and rapidly evolving market.
