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“Starting a Christmas tree farm is nearly impossible because there are so many years of investment in that crop before you get a cent back,� said Casey Grogan of Silver Bells Tree Farm near Silverton.

Fewer trees planted

As a result, the state’s Christmas tree industry seems to be defying the economic principle that rising prices spur production, according to the USDA’s latest report.

On average, Oregon farmers received more than $37 per tree in 2023, a 19% increase since 2020 and the highest price on record in USDA’s Christmas tree surveys.

To compare, trees fetched an average $14.20 in 2010, when the state’s industry was suffering from a severe glut.

However, the survey found Oregon growers planted fewer than 5.5 million Christmas trees in 2023 and 5.4 million in 2024, down from the most recent peak of 6.2 million in 2022.

Two decades ago, up to 9.8 million trees were planted annually in the state, swamping the market when they reached maturity years later.

“That last oversupply we went through really burned a lot of people,� Grogan said.

“It was not fun for those who went through it.�

Shell shock from that downturn may still be deterring farmers from tree plantings, he said.

Though costs for land, fertilizer and labor have been climbing, it’s unknown if consumers will be opening their wallets as willingly come harvest time.

“You don’t really know where the price is going to be eight years from now,� Grogan said.

Some farmers have simply been harvesting their trees without replanting, he said.

“They get to the point they don’t have anything left and that’s the end of their farm,� he said.

Nearly 34,000 acres remained planted to Christmas trees in Oregon in 2023, a 21.5% decline since 2015, according to USDA.

High mortality

Farmland is more expensive. Many farmers prefer crops with a quicker return on investment than Christmas trees, which require hand labor for pruning and harvesting.

The USDA’s report also found the mortality of newly planted trees has roughly doubled in recent years, rising from an average 12% in 2020 to 25% in 2023, which is another likely factor in discouraging expansion.

Up to 40% of newly planted trees in some fields succumbed to a spring spike in temperatures several years ago, likely contributing to a surge in plantings in 2022 as farmers sought to compensate for the losses, said Mike Jones, business manager of the Kirk Co., a Christmas tree grower and equipment supplier near Oregon City.

“You’d just see everything start turning crispy and brown,� he said.

Faced with the prospect of spending additional money on replanting after a hefty initial investment, farmers may not be as enthusiastic about the crop’s outlook, said Tom Norby, a farmer near Corbett, Ore.

“People may decide that’s too much risk,� he said. “That heat dome a few years ago really scared a lot of people.�

Some growers are experimenting with irrigation to help young trees survive, as they’re generally most vulnerable in the first year after planting, Norby said. However, trees are often grown on slopes that render overhead sprinklers impractical, while drip systems can be too costly to pencil out.

Farmers may find ways to improve seedling establishment without installing long-term irrigation systems — for example, Norby used a water tank pulled behind a tractor — but such methods will vary according to their individual circumstances, he said.

The specific numbers reported by USDA may be less reliable than the general trends that can be divined from the statistics, farmers say. The agency’s surveys necessarily select for growers who are willing to participate, potentially skewing the results.

“If you know anything about farmers, they don’t like doing anything to give the government more information,� Norby said.

Pricing varies

That uncertainty may particularly apply to the price data in the USDA report, which appears to combine figures from smaller U-Cut retailers and large-volume wholesalers, said Jones.

“You have different pricing levels and structures that have to be taken into consideration,� he said.

Even so, farmers said it’s undeniable the number of operations has shrunk dramatically in Oregon in spite of improved economic conditions. The survey found the state had only 380 Christmas tree farms in 2023, down from 490 farms in 2020 and 690 farms in 2015.

Farmers said the sharp drop in Christmas tree farms has resulted from major producers buying mid-sized operations and smaller growers changing crops or retiring.

The possibility that Christmas trees are becoming a more niche, luxury product is concerning if more consumers switch to fake trees, growers say. In that sense, high prices are a double-edged sword because they could threaten the market share of real trees.

“We’re competing against artificial trees made in China,� Norby said.