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Explore the latest annual estimates to better understand pallet circulation, production trends and lumber consumption across the US market.
Given how opaque some aspects of the US wooden pallet market can be, the Wood Products team at Fastmarkets has embarked upon creating annual estimates for pallets in circulation, pallet production, and many other metrics, dating back to 2002 and forecast up to 2040.
Due to the sheer scale and dynamic nature of the pallet economy, it’s challenging to know exactly how many pallets are in the US at a given point. However, due to Fastmarkets’ proprietary datasets from Random Lengths, Hardwood Market Report (HMR), and Lumber Commentary, alongside the pallet market surveys diligently collated by Virginia Tech every 5 years, we’ve been able to triangulate our estimates with a high degree of confidence.
These datasets have a wide array of applications for participants in the pallet market. For pallet producers, it can support capacity planning and for buyers, it provides context on whether pricing pressure is coming from new-pallet demand, recycled supply, core availability, or changes in wood input costs.
Our estimates begin with benchmarks taken from the Virginia Tech pallet market surveys conducted in the years 1999, 2006, 2011, 2016 and 2021. These surveys are filled out by hundreds of pallet manufacturers and recyclers across the US, enabling Virginia Tech to create estimates of total US pallet production by multiplying the average production number by the quantity of manufacturers in the country.
Using our own estimates for hardwood and softwood demand for the pallet sector in all of these years, coupled with data published by the government, such as the industrial production index for pallets, the manufacturing index and data for real retail sales excluding automobiles and gas (this variation of retail sales is most pertinent to pallets), we’ve been able to create consistent ratios for the main drivers of pallet demand which we can use to fill in the years where there isn’t Virginia Tech data.
This is a very broad overview of our methodology, but if you have any questions or would like more clarity, please email antonio.gallotta@fastmarket.com. Forecasts from 2026 to 2040 for the indicators below, along with many others, can be found in our monthly US Pallet Analytics Commentary. If you’d like to subscribe to this commentary, fill out your details at this link.
Here are a few key findings from our models that help shed some light on the US pallet market.
Our model’s estimates showed that there were 3.7 billion pallets in circulation in 2025, with a large acceleration seen since the pandemic. This was caused by the prevalence of e-commerce, which demands that there are more pallets circulating in the system to facilitate the fast turnaround of goods bought online.
This series gives us a better sense of the pallet stock supporting US goods movement, rather than only showing how many pallets are produced in any given year. If the number of pallets in circulation continues to grow, retrieval rates, repair discipline, and core availability become even more important for the balance of the market. If growth slows, it suggests the market is leaning more heavily on the existing pallet pool instead of adding new stock. This helps explain why pallet prices can remain supported even when demand for new pallets is not accelerating at the same pace.
Moreover, producers and recyclers can use our future circulation estimates found in our commentary as a guide to decide whether to invest in more repair capacity, new pallet assembly lines, sortation systems, automation, labor or regional expansion.
Similar to our estimates for pallets in circulation, we also saw total pallet production increase during the pandemic. There were around a combined 800 million pallets produced in the late 2010’s, before ramping up to almost 1 billion pallets once pallet demand from e-commerce ballooned.
Our estimates also show that during the aftermath of the 2008 recession, new pallet production dwindled due to falling demand for goods, but recycled pallet production remained strong as there was an abundance of unused pallets available for cheap from the preceding years, where there had been a boom of pallets produced to satiate the demand for the transport of goods throughout the country.
A large pallet pool can support recycled pallet availability, but if many pallets are being lost, exported, damaged or held inside private systems, the recycled market can still tighten. Circulation estimates help explain why new pallet demand can recover even when the total number of pallets in the economy looks high.
This chart shows the total amount of lumber consumed to make pallets every year, combining both softwood and hardwood. As with the previous 2 indicators shown, the huge surge in goods demand in 2021 and 2022 is evident, with 9.3 and 11.0 billion board feet being used, respectively.
For our historical estimates we used our own proprietary data, combining hardwood data from our HMR publication with softwood data from the authors of our Lumber Commentary, providing a comprehensive picture of the annual lumber consumption used for constructing pallets.
When creating our forecasts all the way up to 2040, we’ve compiled this using our HMR and Lumber Commentary datasets. We then blended this with data we were able to derive from Virginia Tech’s survey from 2016 for how many board feet, on average, are needed to repair a used pallet (1.84 board feet) and to build a new pallet (16.69 board feet).
Historically, estimates for the total number of billion board feet used by the pallet sector have been generally underreported and hard to come by. By combining our datasets, this gives the wood products sector a more complete picture of how much lumber is used by the pallet industry in the US every year.
Our annual pallet model indicates that total lumber consumption for wood pallets, which makes up the lumber for new pallet production and the new lumber used for pallet repair, reached about 9.9 billion board feet in 2025.
Breaking down the previous graph by species type, softwood accounted for about 8.1 BBF and hardwood about 1.8 BBF. What is particularly striking is the evolution of the mix. Softwood has steadily taken share from hardwood, because, despite having less robust properties than hardwood, it is cheaper and far more abundant in large swathes of the US. During the pandemic, when pallets were scarce and prices were soaring, availability was far more important than strength, and this allowed softwood to embed itself into new parts of the market.
However, we don’t predict that hardwood pallets will completely crater. Automated warehouses and robotics are raising the bar on consistency and durability, and this is something hardwood pallets have over softwood pallets. Unmanned warehouses that don’t have people overseeing the assembly line will covet pallets that don’t break over cheaper pallets that are more likely to break, in turn causing far greater costs from downtime on the assembly line. For that reason, we forecast that hardwood’s decline plateaus due to its strength qualities.
This is especially relevant for pallet producers that are in areas that produce both hardwood and softwood lumber, as our forecasts will help manage exposure to the two competing supply chains.
However, the main impediment for hardwood pallets isn’t demand, but supply of low-grade which is derived from higher-margin end-uses. Leaning on our HMR data, we can see that the amount of hardwood lumber used for pallets has fallen by 43% from 2022 to 2025.
This is because, just like in the softwood market, the low-grade lumber used to make pallets is a profit-reducing byproduct for sawmills that are trying to extract as much higher-quality “grade” or “on-grade” lumber as they can, as this is where the biggest margins are.
Unfortunately, the hardwood sector has faced difficulties since the 2008 housing crash, which led to less demand for hardwood flooring, which was more lucrative. The industry recovered slightly in the mid-2010s, but demand cratered again as preferences shifted to cheaper laminated flooring, and the property market in China – which had been a boon for the US hardwood industry – collapsed.
Because there has been far less high-grade hardwood lumber being produced, this has eventually choked off the supply of low-grade lumber used in pallets, as this was only ever a byproduct of the quest to extract as much high-margin hardwood from the log. We see this fall in the availability of low-grade lumber used for pallets as the biggest obstacle to the share of hardwood in the pallet market.
Despite block pallets being more durable, they still make up far less of the pallet market. A lot of this comes down to the cost advantages of stringer pallets, and this discrepancy in price culminated in there being 402 million new stringer pallets and 116 million new block pallets made in 2025.
Stringers have historically dominated the pallet market, primarily because they use fewer board feet of lumber per pallet than block pallets. With the increase in automation, our forecasts expect to see a higher percentage of block pallets due to mandates from large retailers, such as Sam’s Club and Costco. The increased automation in distribution centers requires more reliable and robust pallets as downtime caused by broken pallets becomes more expensive.
The proliferation of distribution centers, often with increasingly fewer staff, has led to more block pallets in the last decade or so, stealing some share from stringer pallets. Skids – which have no bottom deck – remain a small part of the market and have seen their share fall since 2002.
Fastmarkets will continue to update the estimates as new market intelligence and survey data become available. This analysis would not have been possible without the dedication and assiduousness of the authors of the Virginia Tech studies, and we look forward to their next instalment.
Get ongoing US pallet market analysis, datasets, and 2026–2040 forecasts in our monthly US Pallet Analytics Commentary.