Christmas tree growers enjoy lucrative year as demand outstrips supply

Investing in the business of growing Christmas trees could be a savvy move as demand for ‘greener’ real Christmas trees continues to outstrip supply.

There has been much media coverage, this festive season, of the continuing shortage of Christmas trees. The supply problems stem from the fact that growers had less cash to spend on planting during the recession and it’s these trees that are now reaching maturity, ready for harvesting for the Christmas tree market. However, as there are fewer of them than usual, prices are sky-rocketing and investors are reaping the rewards.

The US-based National Christmas Tree Association (NCTA) explains that the recession was tough on everyone’s finances but Christmas tree growers were, at the time, also suffering from the impact of over-supply, which resulted from a period of over-planting eight to twelve years beforehand. The NCTA’s Tim O’Connor told the Huffington Post: “Prices fell off the roof and growers were losing money, so they didn’t have the incentive – and in some cases they didn’t have the equity – to invest in planting seedlings.”

Now, another ten years down the line from the Great Recession and things are very different indeed. Several regions across the US have serious shortages in trees, meaning that prices have risen by around ten per cent in areas like the Pacific Northwest. Exports from the region will be down 1.5 million trees in 2017, says one experienced Christmas tree farmers who adds that he expects the shortage to carry on for ten years.

The shortage is, of course, teamed with an increase in demand stimulated by the move towards more environmentally friendly choices during the holiday season. Real trees, as opposed to fake ones are favoured by greener consumers as they tend to be sold locally rather than shipped across the world and, perhaps most importantly, provide habitats and absorb carbon from the atmosphere as they grow.

The US-based Nature Conservancy’s Bill Ulfelder, explains: “Real trees are much more green than fake ones.
They’re also really important to our economy. There are more than 15,000 tree farms in the country, generally family owned. Growing and harvesting Christmas trees can provide 100,000 jobs a year. It’s a billion dollar industry.”

As a result of the above trends, forestry firms who have continued to grow Christmas Trees throughout the harder times are now seeing great returns on their investment. Their trees are selling fast and at higher prices than before, and investors are also grateful that they put their cash into sustainable tree growing.

GWD Brazil‘s spokesperson, James Barrett, responded to the reports. “Some tree growers moved into other crops when times were good in order to diversify or to cash in short-lived trends for certain foods and these same farmers are unlikely to be enjoying the levels of success as that those who remained loyal to Christmas Trees, which is a much more stable market,” he commented.

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