Pine. Or any kind of wood.
MDF will work, but you may see nail pops later on if not done correctly.
If humidity is an issue, use cedar or cypress. But inside a conditioned space, pine will work fine.
I used 1/8" v-grooved pine boards for a rustic look. Looks great, but you've got to buy 3x more than you need because it's extremely knotty and fragile and warps easily if not left perfectly flat. Once glued and nailed, it's fine.
Of course, you don't have to use 1/8" v-groove