Pricey Christmas trees traced back to 2008 financial crisis
Supply shortage expected to last at least a couple years
Consumers on the hunt for a Christmas tree have little to cheer about this year, as prices are through the roof due to a shortage of trees that can be traced back to the 2008 financial crisis.
Analyst Paul Quinn of RBC Dominion Securities says the Great Recession put thousands of American Christmas tree farmers out of business, resulting in far fewer seedlings being planted.
As trees have a maturity cycle of 10 years, the lack of supply is just now beginning to bite, pushing up U.S. demand for Canadian trees and causing higher prices for consumers across the continent.
The U.S. National Christmas Tree Association says the average price of a tree rose to $78 US in 2018 from $35 in 2013.
Price growth has also occurred in Canada, Quinn said, with sales at Christmas tree farms up by an average of 15 per cent annually for the last five years. In central Canada a conifer costs between $50 and $90, depending on height, quality and species.
Jimmy Downey, head of the Christmas tree producers association in Quebec, says consumers unwilling to shell out more than last year may have to settle for timber that's shorter, scragglier or a notch below the "Cadillac" varieties, like the Fraser fir.
Stephanie Quinn, who co-owns a direct-to-consumer farm in the Montreal area, says two dry summers as well as renewed interest in natural trees rather than artificial ones have compounded the problem, prompting her to raise prices by $10 this year.
The supply shortage is expected to last at least a couple years as Tannenbaums continue to fetch top dollar.