DNR economists present revised timber forecast; fund balances at risk as removals and prices fall; board adopts small conservation transfer

DNR staff told the Board of Natural Resources on March 3 that timber revenues and volumes are now forecast materially lower than earlier estimates, a trend that is straining fund balances used to manage trust lands.

Christopher Larson, DNR lead economist, presented the February forecast (based on data through January) and summarized major revisions: "We're reducing the forecast to 400,000,000 board feet," he said, noting an associated timber-sales price reduction to about $340 per thousand board feet. Larson described timber-sales volume moving from an earlier 500 million estimate toward a lower outcome and said timber-removal forecasts were cut by roughly 9% as of the February table. He and staff cited a combination of weak demand, export-market changes and blowdown salvage as factors driving lower prices and removals.

Larson also discussed inventory under contract, saying the data he last reviewed showed about 520,000,000 board feet under contract with roughly 250,000,000 board feet expiring in the 2027 fiscal year — figures he described as preliminary. In response to board questions about international factors, he said exports and domestic supply both play roles and that the team is running models to parse causes.

Candace Montoya, uplands budget manager, presented quarterly revenue and fund-balance projections across asset classes. She said uplands revenue for quarter 1 was about $29,000,000 and that quarter 2 historically produces more, but the updated forecast is driving RMCA and the Forest Development Account downward. "These are the management tools we use to plan our business operations," she told the board, and described short-term management options (e.g., timing changes, targeted early distributions from contract harvest accounts and slowing nonessential expenditures) to manage cash flow.

Board members and staff discussed the consequences for county beneficiaries and for management accounts; several county representatives had earlier described dramatic declines in trust receipts. The board then approved a consent-item land transfer: Vice Chair Dan Brown moved adoption of Resolution 16-73, which adds 5.6 acres to the Stavis Natural Resource Conservation Area; the resolution was adopted by voice vote.

Larson and Montoya said the forecasts remain subject to revision as newer harvest and market data arrive, and the board scheduled further consideration of timber sales at its March 16 meeting after staff adjustments to comply with the court ruling.