The Real Story About the Price of Christmas Trees in 2019

 

This is not a one-year story, it has taken more than 20 years to arrive at this point. No doubt, the media will be highly interested in this story; understanding the history that shaped the current price is critical to reporting it correctly. It begins with the fact that Christmas trees take 7 – 10 years on average to grow from seedlings to harvestable trees. There is no shortcut to speed up the number of trees available, once planting is completed by growers each season, the number of trees available in the future is fixed. The fixed nature of the supply of trees cuts both ways; if there are too many planted, as was the case in the 1990s, they don’t go away until they are harvested with the oversupply pushing prices downward. If the supply is tight to market demands there is no way to have more trees available until they are planted and grown in future years, causing more aggressive buying.

The 1990s was a period of an oversupply of Christmas trees. Growers were competing with each other for the same buyers and as a result prices declined substantially, often below the cost of production. Wholesale buyers got used to a market where they could purchase trees anytime they wanted them at cheap prices from sellers who were desperate to sell. The industry got smaller as growers exited the business and those who remained planted fewer trees. However, prices remained low then a recession hit.

Those were not signals telling growers it was a good business decision to plant more trees. Prices for trees averaged $37.79 from 2008 – 2014, as measured by the NCTA Consumer Survey, with an average of 28.26 million trees sold each year. Things changed in 2015, fewer trees were sold (25.9 million) at an average price of $50.82. This was the first year in a long time that growers made a reasonable profit. It was also the trigger for the media to begin a story line of a “Christmas tree shortage” as the 2016 Christmas season approached. A “shortage” of Christmas trees has been a major media story reported every Christmas season 2016 – 2019.

Due to smaller planting levels in earlier years the supply of harvestable trees has been tight since 2015, particularly with strong demand for real Christmas trees, however there has never been a true shortage where consumers were unable to buy a tree. Wholesale buyers were more aggressively seeking trees to ensure they had a good supply, particularly as the media stories highlighting a “shortage” of trees were reported every year.

Statistical snapshot:

NCTA’s 2019 Christmas season consumer survey was conducted within the United States by Nielsen/Harris Poll on behalf of NCTA January 28-30, 2020 among 1962 adults ages 18 and older. The data was recently analyzed for NCTA by Dr. Timothy J. Richards, Marvin and June Morrison Chair of Agribusiness, Co-Editor American Journal of Agricultural Economics, Morrison School of Agribusiness, W. P. Carey School of Business, Arizona State University.

Survey respondents were balanced for age, sex, race/ethnicity, education, geographic region and household income to match the actual proportions of the US population.
The survey participants’ responses as analyzed by Dr. Richards were then projected to the 128.7 million US households, as identified by the US Census. Based on those projections:

  • 26.2 million real Christmas trees were purchased in 2019
  • The median price of real Christmas trees purchased by survey respondents was $76.87 in 2019
  • The median price of real Christmas trees purchased by survey respondents in 2018 was $66.43 and $74.30 in 2017.

Where Real Christmas trees were purchased in 2019

  • Choose & Cut Farm: 32%
  • Nursery/Garden Center: 13%
  • Chain Store (Walmart, Home Depot, Loews, etc.): 24%
  • Retail Lot: 17%
  • Non-Profit Group (Boy Scouts, churches, etc.): 7%
  • Online: 6%
  • Other: 1%