The industry’s been on a rough ride, but some silver linings point to a bright future
The years leading up to the Great Recession were merry ones for Christmas tree farmers in the United States. Consumer demand and spending were strong, prices were steady, and the supply was bountiful. The future looked bright as a Christmas star, and so farmers planted and planted — and planned. They kept on planting until there were just too many trees.
“As a state in general, Oregon used to sell about 8 million trees a year,” said Mark Arkills, general manager of Holiday Tree Farms Inc., a Corvallis-headquartered farm that, at close to a million trees per year, is one of the largest growers in the state. “And for a while there, we were planting, as a group, over 10 million a year. So, an oversupply hit.”
Unfortunately for Christmas tree farmers, that oversupply hit just before the Great Recession, the latter adding the second part of a one-two combo that knocked the industry back. Strapped for cash, consumers cut spending. Farmers had more trees than they could sell, and the ones they could sell weren’t commanding top dollar. As a result, many farmers trimmed their plantings; others switched crops or got out of the business altogether — all moves that led to an undersupply of the Noble and Douglas firs that people wanted to deck their halls with by the time the economy recovered a few years ago.
Though the Christmas tree industry in Oregon — the nation’s top state for production — and elsewhere is still navigating the fallout from those harvest seasons past, the market has steadied a bit. The lagging supply has pushed prices up, and farmers have tried to balance their planting to at least soften the blow when the next drop-off comes. New-to-the-U.S. evergreen varieties and advances in genetics are helping to fill out the supply, and targeted marketing campaigns aim to beat back the advance of artificial trees.
But the industry is not out of the woods yet. A seed shortage has some growers nervous about the future, artificial trees pose a serious threat and a younger generation may not have the same affinity for the Tannenbaum experience that their elders did. All in all, though, the tidings look glad for the future of Christmas trees.
“I think the outlook is really positive,” said Chal Landgren, a Christmas tree specialist with Oregon State University’s North Willamette Research and Extension Center. “We’ve gone through a pretty tough time, but now growers are feeling pretty happy about the prospects for the future.”
A tough run
By the numbers, the downturn for Christmas tree growers was pretty heavy. According to the United States Department of Agriculture (USDA) five-year census, in 2007 there were nearly 17,400 Christmas tree farms in the nation that cut 17.4 million trees. By 2012, the number of farms had dropped by close to 2,000, and 100,000 fewer trees had been cut. In 2017, the number of farms had slipped further to 15,000 and just above 15 million trees were cut.
In Oregon, farmers harvested close to 6.9 million trees in 2007; by 2016, it was down to 5.2 million, and in 2017 it hit 4.7 million. According to Landgren, there were 375 Oregon licensed growers in the Pacific Northwest Christmas Tree Association in 2008; now, it’s down to 166.
“That’s been a function of the oversupply bulge the industry went through,” he said. “You can only sell so many Christmas trees.”
It wasn’t just the tree growers who felt the pain. The farmers who grow the seedlings that become Christmas trees got socked, too. Kathy LeCompte, co-owner of Brooks Tree Farm, a seedling grower headquartered in Salem, said that when farmers stopped planting trees, demand for seeds dried up. And while some seed, like Douglas fir, can last for years, others, like Noble, don’t age well and don’t last.
“We dumped a million trees one year during the recession,” LeCompte said.
On top of that, Brooks Tree Farm and other seedling growers had to ration their seeds for a few years while they waited for a bumper crop of new seeds, which usually occurs every seven to 10 years. A few years ago, when that bumper crop finally came around, a heatwave struck and destroyed massive amounts of seeds in the Willamette Valley, Idaho and on Vancouver Island, all within a few days. That same heatwave also damaged some of the new plantings that were already in the ground, which has contributed to the ongoing shortage.
“I often say to people, this is a hard game to win,” LeCompte said.
Making it even more difficult for the Christmas tree industry: fake trees. According to a 2016 study from the American Christmas Tree Association conducted by Nielsen, close to 100 million households across the U.S. display Christmas trees. More than 80 percent of those are artificial. The National Christmas Tree Association (NCTA) reported that in both 2016 and 2017, Americans bought 27.4 million real trees; in 2016, they bought 18.6 million artificial trees, and in 2017 that number rose to 21.1 million.
“There’s been a significant shift to artificial trees, particularly among aging Baby Boomers,” said Tim O’Connor, executive director of the NCTA. “Many of them grew up knowing that they wanted a real tree experience for their kids, but once their kids were older or moved out, they immediately switched to an artificial tree, and they’re not coming back to a real one.”
Another impact of growers not planting as many trees during the recession is a present lack of taller trees, those that hit 10 to 12 feet. That’s a void that fake trees have been able to fill, especially as more new construction homes are featuring taller ceilings.
“One of our biggest requests was for 12-foot trees, specifically in (wealthy Portland suburbs) Sherwood and Wilsonville, with all the big new houses and apartments that have higher ceilings,” said Candace Moffatt, home décor buyer with Al’s Garden & Home. “We could charge more than $2,000 for a pre-lit one. They didn’t care.”
Though the fallout from Christmas tree seasons past continues to influence the present and future, there is still plenty of silver lining that suggests the industry is returning to a healthy state.
“The optimistic part is, the guys who have stuck through the tough years are in a great position, and that’s great for them,” said Marsha Gray, executive director of the Christmas Tree Promotion Board (CTPB).
Perhaps the biggest positive from the shortage of trees is an accompanying rise in prices as demand has outpaced supply. According to the USDA’s Northwest Regional Field Office, in Oregon, the average price per tree sold in 2010 was $14.21; by 2015, the average was up to $17.90. The NCTA found that U.S. retail consumers paid an average of $75 for a real tree in 2017. Similarly, though down slightly from $91.1 million, the estimated sales value of Oregon’s 2016 Christmas tree harvest was still a healthy $90 million.
“There have been some significant price increases in the last few years,” said Holiday Tree Farms’ Arkills. “We went up about 3 percent this year. But we think prices are leveling off — and that they need to. If prices get too high, then we make the artificial tree more attractive.”
The rough stretch for the industry has also led to some innovation. Some relatively new species have been introduced from oversees, including Turkish and Nordmann firs, to help beef up supply. The trees seem to grow well here and require less spraying, if any at all, according to Arkills.
Holiday Tree Farms has also been working with Oregon State University on some genetics projects, and it’s invested in its own seed orchard as well as one with the Bureau of Land Management in Colton, Oregon. In addition, Arkills said Holiday Tree Farms has been continually looking for ways to improve its land, whether that be fallowing fields for a year in between production, planting cover crops to restore nutrients or using track-based tractors to lessen compaction.
O’Connor said there’s also no discounting the rise in “agritainment” as many farmers have added new draws to get families to come to their farms and generate new revenue; think corn mazes, hayrides, live music and appearances by Santa Claus.
The industry as a whole has also come together to support marketing and promotional efforts spearheaded by the CTPB. Farmers and importers pay 15 cents per tree to fund what’s called a checkoff program, which aims to spread the good word about real Christmas trees. The primary campaign, called “It’s Christmas. Keep it real,” takes largely to social media to target young families with the benefits of real trees, from the memories made when choosing and cutting a tree to the environmental and business realities.
“There is such a misunderstanding out there about real trees when the person off the street thinks that we are taking trees off the planet,” Gray said. “These are farm-grown. We put more in when we take them out. When you’re not buying a real tree, you’re not saving a real tree, you’re putting a farmer out of business.”
At the end of the day, O’Connor said Christmas tree growers have been through a rough cycle, but, as in agriculture in general, it is just that: a cycle. He’s seen it in other ag sectors; Arkills said this is the second oversupply cycle that he’s experienced in his 33-year career.
The market should continue to level out and the industry will iron out its wrinkles while also trying to sow the seeds for increased future demand. After all, people have been celebrating the Yuletide with fir trees in their homes for nearly 500 years and aren’t likely to stop anytime soon.