new York
CNN business
—
In the spirit of Christmas cheer, here’s the good news first: Christmas tree farms say this year’s harvest is looking good and they don’t expect any shortages.
But here’s the reality check. Expect more for the perfect fir, pine or spruce compared to last year.
As with so many products lately, inflation is to blame.
Operating costs of tree farms — from labor and raw materials to shipping the trees to retailers — have also increased over the past year.
How much more does this 2022 Christmas spirit cost?
In August, the Real Christmas Tree Board industry group surveyed 55 wholesale growers of Christmas trees, which account for about two-thirds of the nationwide supply.
They found that 71% of respondents expect to increase the wholesale prices they charge retailers by 5% to 15% year-on-year, and some others cited increases of up to 20%.
At the store level, larger retail chains could potentially absorb some of the price increase, but they will likely have to pass some of those costs on to shoppers.
“We asked consumers separately in July about their tree price expectations this year. They told us they were likely to pay more for trees due to headline inflation, but they would still buy their tree,” said Marsha Gray, executive director of the Real Christmas Tree Board.
But while consumer price inflation hovers above 8%, farmers’ production costs are skyrocketing as labor, fuel, seed and fertilizer fees continue to rise.
“Farm inflation has far outstripped consumer inflation,” said Bob Shaefer, CEO of Noble Mountain Tree Farm, a 4,000-acre large-scale farm in Salem, Oregon that produces half a million trees annually.
Shaefer said Noble Mountain expects its wholesale prices to rise 8% year over year this holiday season. Oregon and North Carolina are the two largest US Christmas tree producers.
“We want to be as sensible as possible with our pricing in the face of these challenges,” Shaefer said, while acknowledging that the crisis is happening across the farming industry.
For Noble Mountain, Schaefer anticipates that the biggest increase in costs will be related to freight.
That aligns with the outlook for the entire industry: The Real Christmas Tree Board survey showed growers’ top concerns this year are freight and shipping costs, followed by a slowdown in the supply chain and the impact of inflation on consumer spending.
“Our trees are mainly transported by truck. The trucking industry is facing a shortage,” Gray said. “Our farms are all facing the challenge of getting their produce from A to B for the holiday season and how much more it will cost them.”
