Christmas trees will be more expensive this year amid shortages
SALEM, Ore. — Americans will pay more for pre-cut Christmas trees this year as shortages deepen from the country's top two producers, Oregon and North Carolina.
Joe Territo sells Oregon trees in San Jose, Calif. But he’s becoming increasingly frustrated with rising costs, from the trees to labor. Territo says the only figure going down is profit.
“It seems like every year, it’s harder and harder,” Territo said. He expects to sell 6-foot Noble firs for about $75 a piece this season, up from about $69 last year.
The problem is one of supply. Christmas tree growers are coming up short as their 2017 harvest enters its critical period, with trees being shipped coast-to-coast and abroad.
Around the time of the Great Recession, growers had an oversupply of trees after planting too many in the early 2000s. Subsequent low prices forced many farmers out of the Christmas tree business, leaving other growers to tend to the market.
But now, with only so many trees to go around, remaining farmers can't keep up with demand — and they might not catch up for years. It can take nine years before some trees are ready to be cut and sold.
Oregon farms harvest the most trees in the United States, exporting them to places like Asia and California. Trees from North Carolina are generally shipped to states east of the Mississippi River, such as Florida.
Supply is tight
Casey Grogan is a manager at Silver Bells Tree Farm, a few hundred acres outside Oregon's capital city, Salem. He reckons the farm has received 20 times its normal number of customer inquiries.
“We just have enough to supply the customers we’ve been supplying, so we’re not able to help them,” Grogan said.
But Grogan is optimistic for fellow Oregonians who should be able to find fresh fir trees. And there are many u-cut tree farms.
"The people that are really gonna suffer from this, I think, are going to be people in Southern California, Arizona, Texas, places like that," he said.
Tim O’Connor, executive director of the National Christmas Tree Association, denies there is a shortage but acknowledges, “Supply is tight.”
“Everyone who wants a tree will be able to get one,” O’Connor said.
Christmas tree farmers aren't so confident.
"Right now, there's a tree shortage. It's been coming down the line for the last eight or 10 years, or so," said Jason Hupp, who helps manage Hupp Farms near Silver Falls State Park in Oregon.
“So our biggest challenges are having enough trees to supply customers and just getting phone calls after phone calls after phone calls of people desperate for trees that don’t exist,” he said.
One recent morning, a helicopter piloted by Terry Harchenko swooped over Hupp Farms, snatching up bundles of trees after Raul Sosa, a lone worker clad in high-visibility orange, connected them to a hook on the chopper's dangling line.
It's dangerous work — the hook could swing and strike Sosa — but worker and pilot worked gracefully in concert.
"It's like air ballet. It's crazy," Hupp said beforehand.
The helicopter dropped the heavy trees in a nearby lot, where other workers pulled away ropes holding them together. Many Hupp Farms trees will head down south to California.
Wholesale growers estimate they’re raising prices at least 10% year-over-year. Growers don’t expect normal harvest levels for Christmas trees to return until at least 2021 or 2025.
Like Hupp Farms in Oregon, Barr Evergreens in North Carolina can fulfill wholesale orders for its existing customers but has to turn away new ones, said owner Rusty Barr.
Barr expects to raise prices $2 to $3 for pre-cut Fraser fir trees at his retail outfit. That’s on top of the $60 to $80 they’ve sold for in the past, depending on size.
North Carolina harvested an estimated 3.5 million trees in 2016, according to the Pacific Northwest Christmas Tree Association. The state was followed by Michigan (3 million), Pennsylvania (2.3 million) and Washington (1.5 million).
By contrast, Oregon cut down approximately 5.2 million trees.
For Oregon growers, popular Noble firs are especially lucrative — but they only grow so fast, often spending nine years in the ground to grow to 6 feet in the Pacific Northwest.
“That’s the Cadillac of the industry," said Bob Schaefer, general manager of Noble Mountain Tree Farm. The Salem area wholesaler is massive, usually harvesting about half a million trees a year from the more than 4,000 acres the company grows on in the Willamette Valley.
One of the factors driving the shortage was a practically nonexistent crop of Noble fir cones for 15 years, with a good crop finally returning in 2016, Schaefer said. Without cones, there are no seedlings and no trees.
Limited supplies of the Noble fir seedlings led Noble Mountain to fill production holes with Douglas firs, assuming customers would still want a Christmas tree of some sort. But some buyers aren't eager to branch out.
“There’s a lot of pent-up demand for Noble fir that, you know, probably, to some extent, won’t be met this year,” Schaefer said.
He expects Noble fir harvest levels to return to normal in 2025 or 2026.
California is Noble Mountain’s biggest customer, but the company sends trees elsewhere in the U.S., and even down to Mexico, where the market is hot for its abundance of Douglas firs.
“This year, we’re shipping more to Mexico than we’ve ever shipped before,” Schaefer said.
Not worried about the competition
Even as shortages affect the Pacific Northwest, competitors in North Carolina don’t keep Schaefer up at night.
For starters, cross-country freight prices tend to keep the competition at bay. “I won’t say it’s prohibitive, but it pretty much prices their product out of the realm of reason for the consumer in most cases,” he said.
Barr, the North Carolina wholesaler, agrees. With freight costs, “it’s getting pricey to go to Denver,” he said.
There's also a rule of thumb among Christmas tree farmers: West Coast trees remain west of the Mississippi, and East Coast trees stay east of the river. Scattered exceptions crop up, such as when wholesalers compete for Lone Star State customers.
“We kind of bash heads in Texas,” Schaefer said.
Fending off fake trees
Shortages and rising prices are fueling concerns among growers that customers will turn to artificial trees, whose shelf lives long outlast those of their natural competitors.
Oregon growers sold 4.7 million real trees in 2015, falling more than a quarter from sales five years earlier, according to the U.S. Department of Agriculture.
Artificial trees accounted for nearly 81 million Christmas trees displayed in the U.S. in 2016, while nearly 19 million were real, according to estimates from the nonprofit American Christmas Tree Association.
With a dramatic shortage that's not expected to reverse for another six or eight years — if not longer — Hupp, in Oregon, is worried customers will buy artificial because they can't find the real thing.
"Their families will get used to that being the norm," he said.