Lumber just hit a 13-month low. $534 per thousand board feet as of today, down 16% in the last month alone. That’s not market volatility – that’s a market telling you something’s broken.
The problem isn’t complicated. Sawmills kept producing like it was 2021 while housing starts fell below last year’s numbers. Dealer yards are sitting on inventory they can’t move. Buyers front-loaded stock earlier this year betting on tariffs, and now they’re dumping it at a discount because nobody’s building. High mortgage rates aren’t helping, and we’re heading into the seasonal slowdown where construction basically stops.
Major producers are announcing mill closures. That’s not a sign of strength.
So why am I writing about lumber stocks? Because when an entire sector gets beaten down this hard, you start looking for who survives. Not who thrives – who doesn’t go bankrupt. December’s when you position for the eventual turn, not chase momentum that doesn’t exist.
The Macro Picture Nobody Wants to Talk About
Housing starts are below year-ago levels. Building permits are down. Active listings are elevated, which means existing inventory isn’t moving. Mortgage rates are still high enough that first-time buyers are priced out, and existing homeowners aren’t selling because they’d have to give up their 3% mortgage for a 7% one.
This isn’t a short-term blip. This is a structural problem that doesn’t get fixed until rates come down or prices adjust enough to bring buyers back. Neither of those things is happening in December 2025.
The speculative front-loading earlier this year made it worse. Buyers thought tariffs were coming, so they stocked up. Now they’re sitting on inventory they don’t need, and they’re liquidating it at a discount just to free up cash. That’s putting even more pressure on lumber prices, which were already weak.
Sawmills responded by keeping production high, which was the exact wrong move. Now they’re cutting production and closing mills, but the damage is done. There’s too much supply and not enough demand, and that doesn’t reverse overnight.
UFP Industries: The One That Works
UFP Industries makes sense to me, even at these prices. The stock’s down 21% from its highs at $89, but the company’s not just a lumber mill. They’re value-added – turning raw lumber into finished building products, packaging, and components.
UFP Industries (UFPI)
What I like about UFP is they’re not betting everything on new construction. They’ve got industrial packaging, repair and remodeling exposure, and enough product diversity that they’re not just sitting around waiting for housing starts to recover. When lumber’s cheap (like now), their input costs drop. When it’s expensive, they pass costs through.
The company’s profitable, hedge funds are buying it, and it’s consistently mentioned as the top lumber play across multiple sources. That’s not hype – that’s institutional money recognizing a business model that works in both up and down cycles.
UFP’s diversification is the key. About 40% of their business is industrial packaging – pallets, crates, and shipping materials. That’s tied to logistics and manufacturing, not housing. Another chunk is retail building materials – the stuff that goes into Home Depot and Lowe’s for DIY and repair projects. That holds up better than new construction because people still fix their houses even when they’re not buying new ones.
The stock’s not cheap on a P/E basis, but it’s never cheap because the market knows what it’s got. I own a position. It’s not exciting, but it works.
Boise Cascade: Cheap for a Reason
Boise Cascade is down 43% from its highs. The stock’s at $67, and yeah, that looks tempting if you’re into value traps.
Boise Cascade (BCC)
The problem with Boise is they’re more exposed to the building products cycle than UFP. When housing’s weak, they feel it harder. The company makes engineered wood products, plywood, and lumber – all of which are tied directly to residential construction. There’s no industrial packaging cushion, no retail DIY exposure to smooth out the volatility.
Boise is profitable and well-run. Management’s competent, the balance sheet’s fine, and the business isn’t going anywhere. But I don’t see the catalyst for a near-term recovery. Lumber prices are still falling, housing starts are still weak, and mortgage rates are still high. That’s three headwinds, and Boise doesn’t have the diversification to offset them.
The 43% drawdown looks like a value opportunity, but it’s only a value opportunity if you think housing recovers in the next 6-12 months. I don’t. So I’m sitting this one out.
If you’re more bullish on housing than I am, Boise’s the higher-beta play. When lumber turns, Boise will move faster than UFP. But “when” is doing a lot of work in that sentence.
West Fraser Timber: The Canadian Wildcard
West Fraser’s one of the largest lumber producers in North America. They’ve got scale, they’ve got diversification across Canada and the U.S., and they’re a major player in both lumber and engineered wood products.
West Fraser Timber (WFG)
The issue with West Fraser right now is the same issue with every lumber producer: too much supply, not enough demand. They’re cutting production, which is the right move, but it also means lower revenue in the near term. The stock’s been volatile, and I don’t have a strong conviction either way.
What West Fraser has going for it is scale. When the market’s weak, smaller producers get squeezed out first. West Fraser can afford to idle mills, cut production, and wait for the market to rebalance. They’ve got the balance sheet to survive a downturn, and when lumber prices recover, they’ve got the capacity to ramp back up quickly.
The Canadian angle matters too. Cross-border trade, tariffs, and currency fluctuations all affect West Fraser differently than U.S.-only producers. The Canadian dollar’s been weak, which helps their export competitiveness. But it also means their earnings in USD terms can be volatile.
I’m not buying West Fraser here, but I’m watching it. If lumber prices stabilize and housing starts tick up, West Fraser’s got the scale to benefit. But that’s a lot of “ifs” for December 2025.
Weyerhaeuser: The REIT Play
Weyerhaeuser is different. They’re a timberland REIT – they own the trees, not the mills. That means they’re less exposed to lumber price volatility day-to-day, and more exposed to long-term timber values and land appreciation.
Weyerhaeuser (WY)
The dividend yield’s attractive (it’s a REIT, so they have to pay out most of their income), and the business model’s more stable than a pure lumber producer. Weyerhaeuser owns about 11 million acres of timberland in the U.S. They harvest timber, sell it to mills, and collect rent on their land. It’s a real estate play as much as a lumber play.
The advantage of the REIT structure is consistency. Weyerhaeuser doesn’t have to deal with the operational complexity of running mills, managing labor, or dealing with commodity price swings on finished products. They just grow trees and sell them. That’s a simpler, more predictable business.
The downside is they’re not immune to lumber market weakness. When lumber demand’s weak, timber demand follows. Mills don’t need as much raw timber if they’re cutting production. So Weyerhaeuser’s revenue and cash flow still decline in a downturn – just not as sharply as a mill operator.
I like Weyerhaeuser as a long-term hold if you want exposure to lumber without the operational risk of running mills. It’s not a December 2025 trade – it’s a “own it and forget about it” position. The dividend’s nice, the land’s valuable, and the business model’s durable.
Louisiana-Pacific: The Outlier
Louisiana-Pacific is up 78% over the past year. That’s not a typo. While everyone else in the sector’s getting crushed, LPX is somehow working.
Louisiana-Pacific (LPX)
The reason is product mix. LP makes engineered wood products – OSB (oriented strand board), siding, and specialty building materials – not just commodity lumber. OSB is used in residential construction, but it’s also used in repair and remodeling, which holds up better than new construction in a downturn.
LP’s siding business is particularly strong. SmartSide siding is a premium product that competes with fiber cement and vinyl. It’s higher margin than commodity lumber, and it’s tied to the repair and remodeling market, which is less cyclical than new construction. Homeowners still replace siding even when they’re not buying new houses.
Earnings estimates for 2025 are $5.37 per share. The stock’s expensive relative to the sector, but it’s expensive because it’s actually performing. LP’s not waiting for lumber prices to recover – they’re making money right now with products that aren’t tied to the commodity cycle.
I don’t own it (I missed the run), but if you’re looking for a lumber stock that’s not correlated to the commodity price collapse, this is it. The risk is that the stock’s already priced in a lot of good news, so any disappointment could hit hard.
Simpson Manufacturing: The Tools and Connectors Angle
Simpson Manufacturing doesn’t get talked about as much as the pure lumber plays, but it’s worth mentioning. They make structural connectors, fasteners, and building materials – the stuff that holds wood together.
Simpson Manufacturing (SSD)
Simpson’s business is tied to construction activity, but it’s less volatile than lumber prices because their products are essential. You can’t build a house without connectors and fasteners, and Simpson’s got strong brand recognition with contractors and builders.
The company’s profitable, the balance sheet’s clean, and they’ve got pricing power because their products are a small percentage of total construction costs. If a connector costs $2 and saves a contractor an hour of labor, nobody’s negotiating on price.
I don’t own Simpson, but it’s on my watchlist. It’s a way to play construction activity without taking direct lumber price risk.
What I’m Actually Doing
I’m holding UFP Industries because it’s diversified, profitable, and positioned to benefit when lumber prices eventually stabilize. I’m not adding to it here – I’m just not selling. The 21% drawdown from highs is painful, but the business model still works.
I’m watching Boise Cascade and West Fraser, but I’m not buying until I see lumber prices bottom and housing data improve. Catching a falling knife in a commodity downturn is a good way to lose money. I’d rather miss the first 10% of the recovery than lose another 20% trying to time the bottom.
I like Weyerhaeuser conceptually, but I don’t own it. If I wanted long-term timber exposure with a dividend, I’d buy it. I don’t, so I haven’t. But it’s a solid choice if you’re looking for something less volatile than the mill operators.
Louisiana-Pacific is interesting, but I’m not chasing a stock that’s already up 78%. If it pulls back 15-20%, I’ll take another look. The product mix is right, the execution’s been strong, but the valuation’s stretched.
Simpson Manufacturing is on my watchlist. If the stock pulls back or if I see signs that construction activity’s stabilizing, I’ll consider it. But it’s not urgent.
The Bottom Line
The lumber market’s a mess right now. Oversupply, weak demand, mill closures – none of that’s bullish. But markets don’t stay broken forever. The companies that survive this downturn will be the ones worth owning when housing eventually recovers.
December’s when you figure out who those companies are. It’s not about buying the dip – it’s about identifying the businesses that can weather a prolonged downturn and still be standing when demand comes back.
UFP Industries is my pick because they’re diversified enough to survive and positioned to benefit when things turn. The others have merit, but they’re either too cyclical (Boise, West Fraser), too expensive (Louisiana-Pacific), or too niche (Simpson) for me to commit capital right now.
Position sizing matters more than picking the perfect stock. If you’re wrong about the timing, you want to be wrong in a way that doesn’t blow up your portfolio. That’s why I’m holding UFP but not adding, and watching the others but not buying.
Disclaimer: This is not investment advice. I own positions in some of these companies. Do your own research.