Demand expected to drive further recovery over the next two years – Housing demand in the United States was a key reason for the lumber market crash in 2009. As U.S. housing, and more importantly housing starts, continue to recover, the North American softwood lumber industry is expected to see both demand and price increases. This is according to a new report from the Rabobank Food & Agribusiness Research and Advisory (FAR) group, titled “North American Softwood Lumber: Industry Outlook Solid, But Not Out of The Woods Yet.”

As indicated in the title, the bank’s current outlook is very optimistic but notes a number of potential challenges. “U.S. lumber production and imports are constrained at the moment,” noted Rabobank analyst James De Jong, the report’s author. “This limited supply, in addition to overall economic recovery, is the reason we expect to see softwood lumber prices increase 10 to 15 percent over the next two years.” The report goes on to outline the biggest challenges for the industry. “The biggest challenges we see are the headwinds in the Chinese economy and the U.S. housing market transition,” notes De Jong. “The housing market in particular is still in a significant transition. The adjustment from an investor-led recovery to one driven by ‘real’ homebuyers will create bumps in the road but our expectation is that this will affect, but not derail, the lumber recovery. ” The full report is available exclusively to clients of Rabobank and to media upon request.

CONTACTS: FAR Report Requests/Media Inquiries Lynne Burns Rabobank North America Wholesale D: 212-808-2581 Lynne.Burns@rabobank.com Jessup Wiley Rabobank, N.A. D: 559-353-4608 North American lumber industry looking solid again