The Silent Angels that brighten up your celebrations every Holiday Season -Let's Dive into Oregon’s Christmas Tree Industry
Sinjini Dasgupta MBA
Marketing Coordinator | Digital Marketing | Social Media Management | Project Management
At a Glance
Illustrated here are the details of the Christmas tree industry, an integral part of American culture during the festive season. It is a multi-million-dollar industry comprising a wide variety of trees like Douglas-fir, noble-fir, Turkish, Trojan, and Nordmann-fir; the first two are the most popular choices. Additionally, included here are the excerpts from an interview with Lloyd Pollard, who runs a Christmas tree business in Portland, Oregon.
Let’s Get Started
I shall start with a trivia question. Do you know which state is the largest producer of natural Christmas Trees in the United States of America? Well, you guessed it! ?Oregon is, in fact, the No. 1 producer of Christmas trees in the United States, selling about 4.5 million trees annually. With a market value of $110 million, Oregon's Christmas tree industry is ranked as the 14th most valuable agricultural commodity in 2020 [1]. Not surprisingly, the state produces over 30% of all Christmas trees sold in the United States, according to the Oregon Agriculture in The Classroom Foundation (OATCF) [2].
To learn about the business in-depth, I was fortunate enough to interview Lloyd Pollard, a Patent and Trademark Attorney in Portland, Oregon, who followed his passion and, along with his wife, Megan, established Pollard Ranch in 2010. It is interesting to know that for them, it was never a plan to own a Christmas Tree farm, but it happened when in 2010, they acquired a parcel of timber ground. By 2013, with more land, the farm doubled in size. Atop Skyline Ridge in the Tualatin Mountains, Pollard Ranch is about 20 minutes northwest of Portland, Oregon, offering spectacular views of the Tualatin Valley, the Coast Range, and several peaks of the Cascades [3].
The Process and the Challenges
A Christmas tree, when planted, “takes about 6- 10 years to grow and be ready for harvesting,” according to Lloyd, and unlike any other crops, these trees take more than one season to grow, especially the taller ones. During that time, no profits can be derived from them. Yet significant costs are incurred through labor, fertilizers, pesticides, and land occupation. During that timeline, even one year of scanty rainfall or pest infestations can have massive repercussions on the business that lead to irreversible damage. Additionally, every planted tree needs particular culturing practices every alternate year of its lifecycle. Lloyd avidly believes in sustainable farming practices and vouches for using natural fertilizers and organic pesticides with minimum environmental effects.
“It also involves a complex planning process to accommodate yearly distribution,” quotes Lloyd, and it is his job to predict the market demand a decade or more in advance as overproduction or underproduction could prove disastrous. In the past, substandard predictions have resulted in business failure. For instance, in 1990, farmers overestimated the demand for Christmas trees, leading to high inventories that had a butterfly effect. Many farms went out of business by 2000 as the prices per tree kept dropping. In 2008, the recession influenced the farmers’ decision to plant fewer trees, raising prices, and demand fell due to the overall financial constraints [4].
At Pollard Ranch, Lloyd religiously collects data highlighting the distribution prediction based on the demand for the sizes (which varies between 3-12 feet in height) of trees usually purchased by customers annually. Orders are typically placed as early as in the Spring months of March- April, while bulk orders are also received during Halloween and, of course, before Christmas. Through the predictive and informed analysis of the available data, Lloyd decides how many trees should be planted and must be of what size for the coming season in December.
More About the Business
Christmas tree farming is a cyclical business, and according to Lloyd, the barriers to entry are low, so there might be intense competition in specific years. At Pollard Ranch, sales are primarily carried out through U-cut or wholesale, wherein U-cut customers can stroll through the plantation of 35,000 trees and select and cut their centerpieces for the holiday season. This is a complete experience where families can witness the estate’s natural wildlife ambiance while enjoying a cup of hot cocoa. Whereas in wholesale, larger orders of the trees from warehouses are custom harvested based on their specifications where both pick-up and delivery options are available.
Farmers usually maintain around a 30% profit margin in the Christmas tree industry, which brings about $10 in net profit per tree [4]. Lloyd agrees it has been a profitable and fulfilling business. The competition from other farmers is medium within Oregon, as each farming estate has its base of loyal customers. Competition from other states like North Carolina and the Upper Mid-Western States is low as most of the customers in the Western states prefer the farms in the Pacific Northwest for sourcing their Christmas trees. Lloyd exclaimed that customers drive from as far as New Mexico and California to purchase the trees from his Ranch.
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Artificial trees pose the most prominent competition threat, as these trees made up 81% of American Christmas displays in 2020, as they are manufactured extensively and incredibly quickly in factories in China. The artificial-Christmas tree market is worth around $1.2 billion compared to real trees’ $2 billion [4]. 32.8 million real trees were sold in the U.S. last year, despite a significant increase in people buying fake trees. This shows that despite the rise in the sales of plastic trees over the past decade, sales of natural trees have remained reasonably stable [5].
Conclusion
Although the Christmas tree industry has seen a 27% decline in harvested trees over the last 15 years, with 15 million trees harvested in 2017 compared to 21 million in 2002, the market is estimated to grow at a CAGR of 4.52% and increase by USD 777.73 million by 2027. Therefore, the demand for natural Christmas trees is increasing as they are more environmentally friendly; these trees create approximately 16 kilograms of greenhouse gas emissions if disposed of in a landfill and less than 4 kilograms if burned, compared to 40 kilograms of emissions from plastic trees [5]. So, this holiday season, splurge guilt-free on a natural Christmas tree and make your celebrations more meaningful and memorable with your family at Pollard Ranch. For more information, visit their website https://www.pollard-ranch.com/.
References
[1] OSU research keeps Oregon Christmas tree industry No. 1 in the nation, https://ourimpact.oregonstate.edu/story/osu-research-keeps-oregon-christmas-tree-industry-no-1-nation#:~:text=1%20producer%20of%20Christmas%20trees,Oregon%20agricultural%20commodity%20in%202020.
[2] Christmas trees are big business in Oregon, and this year, prices are up, by Casey McCabe, October 4, 2022
[3] Our Ranch ?https://www.pollard-ranch.com/our-ranch
[4] The Economics Of a Christmas Tree, by Hannah Bryan for Leaders, December 8, 2022
[5] Christmas Tree Industry 2023: Insights And Statistics by Gitnux, March 7, 2023
Business Development | E-commerce Specialist | Problem Solver | Mandarin | Taiwanese
1 年It's amazing to hear that the market is growing, but they are also more environmentally friendly. I am also shocked by how fast the tree grows and how it must predict the future market to fulfill its needs. Thank you for sharing. Amazing post. :)
Workplace Processes: From Chaos to Clarity ??
1 年Very interesting! I've noticed dramatic shifts in price and supply over the last few years and was curious about the factors involved. At first, it seems counter-intuitive that cutting down natural trees would be better for the environment, but it makes complete sense. Great read.
Employee Relations | Learning & Development | Risk & Compliance Manager
1 年Wow, I didn’t know there’s so much more to this industry than my yearly tradition of going to a u-cut farm every year. Thank you for sharing!
Senior Accountant
1 年Wonderful read, Sinjini! It still amazes me how many trees go out from Oregon for the holidays!