Home Business Why are Christmas trees so expensive? The economics of the U.S. holiday tree industry

Why are Christmas trees so expensive? The economics of the U.S. holiday tree industry

0
Why are Christmas trees so expensive? The economics of the U.S. holiday tree industry

Christmas in the present day is a giant enterprise, and one a part of that’s the multibillion-dollar enterprise of promoting Christmas bushes. The U.S. Christmas tree trade is so massive, it even has two dueling commerce teams: one that supports natural trees and the other, artificial.

We are two business school professors whose college students requested us to elucidate the economic impact of the winter holidays. Within the vacation spirit of sharing, we’re supplying you with some information to debate whereas trimming your tree.

The place to purchase a pure Christmas tree – or chop one down your self

There are three alternative ways to get a natural Christmas tree.

First, you may go right into a nationwide forest and chop down your individual. Comparatively few People do that, though a allow prices $10 or less, as a result of government rules require that the tree you chop should be more than 200 feet from any street, campground or recreation space. Since dragging a tree destroys its branches and needles, the 200-foot rule signifies that massive, heavy bushes should be carried a good distance by means of typically snowy woods.

Your second possibility is to purchase or chop down a tree at a neighborhood Christmas tree farm. Christmas tree farms bought a giant promotional increase when Taylor Swift revealed she grew up on one, however she’s hardly alone: There are nearly 3,000 Christmas tree farms throughout the U.S., in keeping with the Division of Agriculture’s most up-to-date figures. These farms promote round 12 million bushes a 12 months.

Whereas being a Christmas tree farmer sounds idyllic, it isn’t very profitable, since Christmas bushes take over a decade to grow massive sufficient to promote. Lengthy lead occasions mixed with changing and unpredictable weather have pushed many of those farms out of enterprise. Almost 500 U.S. Christmas tree farms shuttered between 2014 and 2019, the USDA discovered.

The third method to purchase a tree is from a neighborhood retailer that imports bushes. In 2022, the U.S. imported nearly 3 million pure Christmas bushes, primarily from Canada. Imports have been rising steadily: In 2014, the U.S. imported solely half as many bushes.

Collectively, which means in 2022, roughly 15 million regionally grown or imported pure bushes had been offered within the nation.

Some individuals like to purchase their bushes from a nonprofit, like the Boy Scouts. These fundraisers are additionally provided from native Christmas tree farms or imports.

Christmas trees close-up
Picture by Annie Spratt from Unsplash

A man-made tree’s journey from China to your front room

Artificial trees are popular with individuals who don’t just like the mess and fuss of natural trees. Reproduction bushes primarily come from China, and most are made within the Chinese language city of Yiwu. The U.S. imported over 20 million synthetic bushes in 2022 alone.

They usually’re turning into more and more frequent. In 2014, the U.S. imported 11 million synthetic bushes and offered nearly 22 million pure bushes. Which means again in 2014, nearly two actual bushes had been bought for each synthetic one. A decade later, pure tree gross sales had fallen to round 15 million, however over 20 million synthetic bushes had been imported.

One results of the shift to duplicate bushes is a discount in home fires. Pure bushes that aren’t watered dry out and generally catch on hearth. In 1980, the U.S. noticed about 850 Christmas tree fires that caused 80 people to be injured. 4 many years later, the variety of annual fires fell to 180, with solely eight accidents.

In a store, a sign in the shape of a Christmas tree ornament reads 'All trees on sale.'
Welcome information for consumers. Credit score: Patrick Abouchalache
Why Christmas bushes are so costly

Some individuals get sticker shock once they see how a lot Christmas trees cost. These surprising costs don’t come from the wholesale stage. Final 12 months, wholesalers importing whole transport containers paid $22 for every synthetic tree, on common, according to U.S. government statistics. Importers of pure bushes paid roughly the identical value. Collectively, synthetic and pure importers paid over a half billion {dollars} for bushes to promote in 2022.

Sadly, there aren’t any official statistics on how a lot People pay for Christmas bushes on the retail stage. There’s a normal consensus that artificial trees cost more than natural trees, however the more money could also be value it as a result of they final a couple of season.

Shopper surveys by the 2 competing commerce teams recommend that folks paid in the range of $80 to $100 for his or her bushes in 2022. This implies the markup on Christmas bushes is round 400% to 500%. That’s about the identical as a pair of designer jeans or a drink from a hotel minibar.

Multiplying the $80 to $100 value by the 15 million pure bushes and 20 million artificial trees sold in 2022 means Christmas bushes are roughly a $3 billion enterprise yearly — with out together with any more money spent on the decorations.

So, with so many choices, how do you decide on which kind of tree to purchase? Worth, environmental factors, comfort and even allergic reactions are all essential components to think about. There’s no straightforward reply. One in every of us can’t resolve and has a number of bushes, starting from a 12-inch synthetic tree handed down from his grandmother to a 7-foot-tall pure Fraser fir bought at his native Christmas tree farm.

No matter you resolve – pure, synthetic, each or no tree in any respect – simply keep in mind so as to add a splash of cheer to your winter celebration. In spite of everything, the perfect issues concerning the season are free.

Article written by Jay L. Zagorsky, Scientific Affiliate Professor of Markets, Public Coverage and Legislation, Boston University and Patrick Abouchalache, Lecturer in Technique and Innovation, Boston University

This text is republished from The Conversation beneath a Inventive Commons license. Learn the original article.

You may also be fascinated with: 

YouTube video

The Conversation