Where I live in Florida, we plan our fall around the hurricane cone. Out West, it is red flag days. A Red Flag Warning does not mean a fire will start. It means heat, dry air and wind have lined up in a way that makes one more likely. Nobody waits for smoke on the ridge to clear the brush or pack the go bag. You read the conditions and you get ready.
I have been thinking about that a lot as budget season starts. Most of us are sitting down to plan 2027 around the numbers we can see, such as lumber prices, what demand is going to look like, and what payroll costs could be. The problem is that what usually wrecks a budget is not in that spreadsheet at all. It is a tariff announcement, or a packaging law in a state your customer ships into, or a federal rule that has been "pending" so long everyone stopped paying attention.
To me, that is really all regulatory forecasting is. You are not going to guess every outcome right. I certainly do not. But you can usually see when things are starting to line up, and that is enough to start getting ready.
So, what should we actually be watching as we head into 2027?
For me, lumber is the one I would be watching most closely. Imported softwood lumber has carried a 10 percent Section 232 tariff since October, on top of the duties Canadian lumber was already paying. The same proclamation also gave the Commerce Department until October 1 to update the President on hardwood imports, so the administration can decide whether additional duties on hardwood and related products are warranted. By the time you read this, that update should be in, and we may have a much better idea of what comes next. In July I wrote about a company in the South struggling to keep up as lumber prices swung, while customers bid pallets out down to mere cents.
Packaging is another one I would be paying attention to. In June I shared how California's SB 54 can exclude reusable wooden pallets from the covered-material requirements. California's program moves into a major new phase in 2027. But California is one of seven states with packaging EPR laws, and they do not all treat pallets the same way. Oregon carved out a narrow exemption for rigid pallets. Other states treat transport packaging more broadly, and several more states have active packaging EPR bills. Even where pallets are excluded, your customers are figuring out what they have to report, and some of those questions will land on your desk.
Heat is a little different. OSHA's proposed federal heat rule has been sitting since 2024, and the Labor Department is now pointing to a supplemental proposal in December. It would be easy to look at that and think you can wait. I understand why. But OSHA also updated its heat emphasis program this spring, and that program is expected to stay in place through 2031. Inspectors can also cite recognized heat hazards today without a final federal heat rule on the books.
Then there is the labor side of it. The H-2B cap filled again this year, and I have not had a single conversation with an owner where workforce did not come up.
So what does getting ready actually look like?
From the conversations I have had with smaller operations, a few things seem to help. Some are building two budgets instead of one, one at today's lumber cost and one with a real increase baked in. That way, if there is a bad announcement, they have already talked through what they are going to do instead of trying to figure it out at the last minute.
They are pulling out their customer agreements and looking at what those contracts say about raw material costs. If the answer is nothing, they are having that conversation in November, not March. They are putting the known dates on a calendar and giving someone thirty minutes a month to check on them. And they are spending a little now on what they already know is coming, like a written heat plan, fans and training, because that is a lot easier to deal with before you have an inspection or an injury.
In May I called this regulatory friction. I still think that is the right way to look at it. These things are not always going to turn into a major problem for your business. But you are going to be in a better position if you know what is coming and have at least talked through what you would do.
That is why the Advocacy and Insights Committee exists. When I was on Capitol Hill in June, the moments that mattered most came when a staffer heard something from our industry for the first time. Some of our best early warnings come from members: a customer comment, a call with a supplier, a notice from the county. If you are seeing something in your market, let us know.
A lot of this starts with simply paying attention. We may not know exactly what is going to happen in 2027, but we can make sure we are not caught completely off guard when something changes.
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October 2026