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Optimism for Local Christmas Tree Industry as New 10-Year Cycle Begins, Wholesale Glut Declared Over

By Jesse Wood

Jan. 8, 2014. Extension officials have good news for resilient Christmas tree growers who withstood the wholesale glut and recession over the past several years.

And it’s not just the slight increase in wholesale prices “after the dark gloom of the last six or seven years,” as described by Doug Hundley, an integrated pest management technician with the Avery County Cooperative Extension who has worked with growers for the past 23 years.

“We expect that we’ll be able to sell trees without a problem. There’s not an oversupply,” Hundley said. “It wasn’t really clear that the glut was over until this year.”

A family takes home a tree for the holidays. Stock photo by Ken Ketchie
A family takes home a tree for the holidays. Stock photo by Ken Ketchie

To explain the supply-demand issue regarding the Christmas tree industry, Hundley began talking about the infancy and boom of the Fraser fir market, which he said turned 50 years old in the past decade. For the first three decades of the local industry, regional Christmas tree growers sold as many trees as planted because expanding markets were able to absorb the product.

“In our area, the Christmas tree industry is a young one, only 50 years old. When we started introducing Fraser firs on the market in the 70s and 80s, it just grew and grew and grew and grew. It didn’t matter how many were planted and we managed to develop markets up through the Northeast, Southeast and out west towards the middle of the country,” Hundley.

With growers receiving a favorable price for trees, Hundley said that from about 1995 to 2005, growers in Western North Carolina and particularly Virginia took part in what he described as “speculative planting” – mass planting without a buyer lined up.

“As these trees began to come on to the market, we found ourselves with more trees than we had sales,” Hundley said.

Hundley said prices were “fine” until about 2000, but with an oversupply, the prices began to fall from 20 to as much as 50 percent.

“I’ll tell you,” Hundley said. “Once you start going down to 50 percent, you are no longer making a profit.”

Hundley said that the Christmas tree industry, like many crops, operates on a cycle, this one being 10 years. As prices began to fall with the glut in the mid 2000’s, growers stopped planting new trees. In addition, Fraser firs don’t take to heavy shearing, and growers can’t keep a Fraser fir at certain height or weight that may be suitable for a majority of living rooms.

So without the option to prune to curb growth, growers were cutting trees down and burning them, for one to prevent them from growing into and thus ruining the quality of other trees, and two because well trees were getting to big for those living rooms.

“The bad news was the oversupply that we had for a number of years. Then the bright side to that, now that we have not enough trees, prices are going rise,” Hundley said.

The good news? “Hopefully times will be good for several years.”

Watauga County Extension Director Jim Hamilton said he agreed with Hundley’s assessment and also noted a shortage of seedlings. He said this past year was the first time folks couldn’t find Christmas tree seedling, something he said was another factor that would influence the market.

Hamilton mentioned that wholesale prices increased “slightly” and choose-and-cut prices were up 20 percent in Watauga County.

“I think it will continue to increase,” Hamilton said.

He mentioned that with the increase in prices, comes more growers wanting to get in on the action.

“I am hoping the industry doesn’t fall into that trap again as prices go up, too many trees go into the ground,” Hamilton said.