Twenty-five million Christmas trees are sold every year in the United States. At an average retail price of $80, this is a $2 billion annual business. Currently, there are 350 million Christmas trees growing on 15,000 farms in various stages of development. Two out of every three come from just four states: Oregon, North Carolina, Michigan, and Pennsylvania.
What makes a Christmas tree an unusual crop is its extremely long production cycle: one tree takes eight to 10 years to mature to a height of six feet. During that time, it’s a financial black hole for the farmer, a game of patience and unpredictability. Even if all goes well, Christmas tree farmers must still forecast what the market is going to look like 10 years out.
History has shown this industry is a classic case study of supply and demand. In the 1990s, Christmas tree farmers planted too many. The glut resulted in rock-bottom prices throughout the early 2000s, putting 500 growers out of business. During the 2008 recession, ailing farmers planted too few trees. As a result, prices have been much higher since 2016.
Noble Mountain Tree Farm, located in Oregon, is the world’s largest contiguous Christmas tree farm, with 2,000 acres. They farm an additional 2,200 acres on three other farms. Each season, they harvest close to 1 million trees in less than 30 days. Bob Schaefer, CEO said, “From cut to delivery, it only takes three to four days to get a tree to retail outlets. For a six- to seven-foot tree cut, baled, and loaded, a farmer is paid the wholesale price of around $42. Factor in expenses over the eight- to 10-year growing cycle, and profit margins are lower. Farmers net $8-10 per tree. Retailers typically mark trees up 100 percent or more to cover freight, storage, labor, and operating costs.”
The biggest threat to real trees may be the steady, incessant rise of their archrival- artificial trees. Modern plastic trees started in the 1930’s by the Addis Brush Company. They manufactured the trees using the same equipment as the company’s toilet brushes. Ever the progressive company, Addis supplied troops in WWI with toothbrushes creating a national ‘habit’ of teeth cleaning — finally. Ah, from toilets to teeth. Then during WWII, they supplied a million toothbrushes to the armed forces.
According to the U.S. Department of Commerce, 77 percent of the Christmas trees Americans display each year are artificial. Eighty five percent of the fake trees are manufactured in the Chinese city of Yiwu, sometimes called “Santa’s Real Workshop.” Yiwu is home to over 600 factories that churn out most of the world’s Christmas decorations.
While a real tree requires up to a decade to get to market, a fake tree is produced in a matter of minutes. At full steam, a factory can pump out 1,500 trees in a two-day cycle. An average six-foot artificial tree sells for $200 and up. Wholesale, they can go for as little as $30. Many Christmas tree farmers say they cannot compete with these higher margins and lightning-fast production cycles. And for some growers, the increasingly split market is an omen of larger geopolitical trends.
“Buying real trees is an issue of supporting American growers instead of overseas manufacturers,” Schaefer said. “Further, real trees are good for America’s health. Initial university studies show that each acre sequesters many tons of carbon while emitting fresh oxygen. Each acre of Christmas trees produces the daily oxygen requirement for 18 people.”
There are over 500,000 acres of Christmas trees in the U.S. providing oxygen for nine million people daily. Young fast-growing trees release more oxygen than mature trees.
“Farms that grow Christmas trees stabilize soil, protect water supplies, and provide refuge for wildlife while creating scenic green belts,” Schaefer said. “Often, Christmas trees are grown on soil that will not support other crops.”
Plantation-grown trees are a renewable resource that is environmentally superior to oil based, plastic artificial ones. Real trees decompose quickly and replenish soil nutrients. Plastic trees can contain lead, other heavy metals, and toxic chemicals, all serious health risks for children. The artificial trees dumped in landfills do not decompose and leach toxins for years. According to the Carbon Trust, a 6-foot-tall artificial tree has a carbon footprint more than ten times that of a real tree.
“But there is nothing like a perfectly sheared fir tree,” Schaefer said. “What do you think your wife would say if you came home on Valentine’s Day with plastic roses? You just can’t beat the real thing.”