Christmas tree shortage causes higher prices this year
The Christmas tree industry has experienced both feast and famine recently and depending on whether you are the grower or the consumer that could be either a good thing or not.
Christmas tree prices are rising this year due to a shortage of trees nationwide. This year the large farms sold out before the season began and will benefit from the higher prices because of the shortage, but the consumer pays the price. Artificial trees are another option and are a factor in the decrease in the number of Christmas tree growers.
Growers have years invested before they can reap their harvest. It takes an average of seven years to grow a Douglas-fir, one of the most popular Christmas trees on the market. Another popular tree, the Nobel fir, takes nine years to reach maturity and industry officials say it's likely there will be a seedling shortage until 2019. This means that there will be fewer Nobel trees until the year 2028.
Supply and demand determines the price of trees: either there are too many trees on the market, which brings the price down, or the supply can't stand up to demand the prices go up, which is what is going on today. The average price for Christmas trees was $36.50 in 2008 and $41.30 in 2009, compared to $74.70 in 2016, according to the National Christmas tree Association.
This Christmas tree story started in the 2000s with a surplus of trees.
"The surplus was so great in Oregon that tree growers could not make a profit and were forced to sell their trees at cost to come out even," said Bob Werfelman, owner of Norlen Acres, a large wholesale Christmas tree company near Newberg.
"Then the Nobel fir became popular and the farmers started growing Nobel's to make money and there was a tremendous oversupply in 2000," Werfelman said. "There was too much competition and too many large tree farms. The result is that many of the tree farms went out of business and they switched to different crops."
Unknown too many, there was another factor lurking in the shadows: the demand for artificial trees was on the rise. Competition from artificial trees chipped away at consumer purchasing of live trees in 2002. The artificial tree industry is dominated by Chinese companies who produce more than 85 percent of the artificial trees with revenues of around $1 billion. That surpassed real tree sales in 2011 and continue to climb, according to the American Christmas Tree Association website.
In 1990, about 35 million live Christmas trees were sold nationwide, compared to 22 million live trees in 2002, according to the association. The combination of the increasing demand for artificial trees and an overstock of trees helped create the tree surplus that forced growers out of business or to scale back.
The amount of trees cut and sold by Oregon growers dropped more than 30 percent and farms decreased from 699 to 485 between 2010 and 2015, according to the Oregon Department of Agriculture data. Nationally, around 3,300 Christmas tree farms operated in 2016 compared to about 17,500 in 2006, according to research from the Freedonia Group.
Oregon Christmas trees remain popular outside the state. According to the Pacific Northwest Christmas Tree Association, about 92 percent of the state's trees are exported out of Oregon.
"I sold out in June," Werfelman said. "All my trees were pre-sold before the harvest. Most of my trees go to California and Texas."
In 2016, Oregon produced 5.2 million trees and the Pacific Northwest is the largest growing area in the country, according to the PNWCTA. Oregon ranks No. 1 in the production of trees and was Oregon's 11th largest commodity in 2016, with an estimated value of $90.8 million, according to the Oregon Department of Agriculture estimate.