Red Oak trees dominate many U.S. hardwood forests. Because of this, the value of timberland, and the profitability of regional wood product companies, depend heavily on Red Oak markets.

In recent years, export markets for Red Oak have been particularly important in generating revenue from U.S hardwood forests – growing in size from $196 Million in 2007 to $645 Million by the end of 2018 (Source: USDA).

Understanding the dynamics of these markets is important when positioning for new opportunities and hedging risks. Here are two charts that show the changing nature of Red Oak lumber export markets from 2007 through 2018.

Emerging Red Oak lumber export markets

In order to get a better picture of emerging Red Oak lumber markets, the first chart excludes the two major markets of the past ten years – China and Canada.

(Note: If you are viewing this on a mobile device, you can expand these charts by turning the phone on its side and/or using your fingers to expand the image).

You can see the rapid rise of Vietnam, the wane of European markets and their replacement by markets in the Middle East and North Africa. Note, however, that this chart only represents about 15% of the total market.

The unbelievable rise of China’s massive Red Oak market

In 2007, Canada was the largest export market for U.S. Red Oak lumber accounting for 47% of the total market.

But by 2019, China’s skyrocketing demand for Red Oak ballooned to about a half-billion dollars, and accounted for a massive 74% of the total market. In fact, the size of China’s U.S. Red Oak market at the end of 2018 was more than twice the size of all of the Red Oak lumber exported from the U.S. in 2007.

Here’s the complete picture. It’s almost hard to believe.

Wow! So, what’s the take home message? Here are a few (feel free to add yours in the comments below):

• Export markets for Red Oak lumber can change drastically over the course of a decade.
• By 2019, China accounted for nearly three-fourths of the total U.S. Red Oak lumber export market, up from 17% just a decade earlier.
• Markets, like Vietnam, can go from being fairly insignificant to a major market in just a matter of years.
• The growth of the U.S. Red Oak lumber export market from 2007 through 2018 was astounding – it more than tripled!

But the important questions now are, how will Red Oak lumber export markets change over the next ten years? What new markets will become major export destinations for U.S. Red Oak lumber? Which will fade? Is it possible that the total export market continues to grow, or will the pie get smaller for U.S. Red Oak lumber exports? What role will the re-shoring of wood product manufacturing play, if any, in the future markets for U.S. Red Oak lumber?

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