AmericanFarm.com

Christmas trees could cost more this season

By JONATHAN CRIBBS
Associate Editor

(Nov. 15, 2016) Christmas trees might be a tad more expensive this year as the nation’s first crop planted in the wake of the Great Recession finally hits the market, industry insiders said last week.
The economic downturn hurt the Christmas tree market much as it did other agricultural sectors. Tree sales slumped, revenues shrank and some operations went under. But the life cycle of the average Christmas tree — about six to eight years — can lead to delayed supply, said Ray Greenstreet, a nursery industry representative on the Maryland Agricultural Commission.
Fewer trees were planted in 2008 — and subsequent years — so there are fewer to sell now.
“A lot of (farms) went out of business or they didn’t want to take as much capital risk,” he said. “It’s just not as much availability or additional availability as there is in a typical growing season.”
It’s a trend holding across much of the country this year, said Hugh Whaley, spokesperson for the National Christmas Tree Association in Littleton, Colo. Regional drought conditions have also affected supply by slowing crop growth, he said, which may return prices to a level not seen in more than a decade. In addition to the recession, the Christmas tree industry has been dealing for more than a decade with oversupply, a problem across many agricultural sectors such as grains and dairy.
“We’re seeing a modest increase (in prices) as well. We’re anticipating prices to return to where they were around 2001,” he said. “The growers’ margins have shrunk quite a bit (over that time) primarily due to oversupply.”
Frank Koontz, owner of Fra-Mar Farm in Carroll County, Md., said the recession hit his tiny tree operation hard. He didn’t plant any trees in 2007 and 2008, he said, due to sinking consumer prices and planting costs. But he said he’s not planning on increasing prices this year. He’s got unsold stock from last year he can sell, and he’s not in a great position to charge customers more.
“I really can’t because of my exposure to the public. I’m off the beaten path, and the economy’s not all that great, and people are still looking for cheap trees,” he said.
Sarah Stockstill, who runs Linden Hill Christmas Tree Farm with her husband in Prince George’s County, Md., also said she’s not increasing prices.
“My trees are about the same they always were,” she said.
Slightly increased prices are likely to stick around for several years — about as long as it took for the country to rise out of the recession, said Vicki Smith, a Christmas tree broker in central Wisconsin who helps supply tree sellers across the country, including Greenstreet’s regional nursery business.
“It was staggering what people went through. They made no money,” she said. “A lot of people went out of business. … There was land that used to be in Christmas trees that was converted to other uses. It was tough times. Very tough.”
It’s too soon to say how wholesale price increases will reflect in the consumer market, however, industry insiders said.
“I don’t think it’s going to be ridiculous,” Greenstreet said.
There also won’t be a tree shortage, Whaley said, despite recent reports that suggest otherwise. But that doesn’t mean consumers won’t feel an effect, he said.
“The recommendation is to shop early for the best selection,” Whaley said. “Don’t wait until the middle of December to go out and try and find the tree of (your) dreams.”