Get ready for a Christmas tree shortage, as supply chain issues and climate change team up – CNBC
Want to buy a Christmas tree this year? You might have better luck asking Santa to bring you one.
Christmas tree vendors say they will have fewer trees available for sale this holiday season due to a double whammy of supply chain troubles and climate change.
The shortfall in supply compared to expected demand will affect the markets for both natural and artificial trees, according to sellers.
“The demand this year is going to be extremely strong and so I think from a consumer perspective people definitely shouldn’t wait,” explained Chris Butler, CEO of National Tree Company, a top importer and wholesaler of artificial Christmas trees and holiday decorations.
“Consumers should buy now because by the time we get to Thanksgiving, which is a peak week for us, I think there’s going to be a lot of empty shelves. We’re seeing pretty strong growth right now already versus last year and so, I do think that we’re in for a big, big season this year,” he added.
Richmond Township, Pemployee at Beck Tree Farms, carries a wrapped tree.
MediaNews Group | Reading Eagle | Getty Images
Butler said a steady increase in consumer spending on home goods throughout the pandemic, overall fatigue from two years of Covid-19, as well as larger gatherings this winter due to vaccinations were indicators of higher demand this season.
“If you see something you like, buy it,” advised Jami Warner, the executive director of the American Christmas Tree Association. Warner explained that ongoing supply chain disruptions have particularly affected artificial trees, which are mostly imported from Asia and taking longer than usual to get to the U.S.
“The quantities this year will be fewer than usual and of course the consumer will have to take the brunt of higher prices. They won’t be hugely higher but they will be higher,” she added.
The world’s supply chain – a connective tissue for commerce – is under pressure from surging consumer demand, labor shortages and overseas manufacturing delays. Supply chain disruptions, which were further exacerbated by the coronavirus pandemic, have led to higher freight costs, delivery times and inflation.
“The goal of a supply chain is to get the right products to the right place at the right time in the right condition. If there’s a disruption, one of those things isn’t happening,” explained Cheryl Druehl, a supply chain expert and professor at George Mason University’s School of Business.
A shopper pushes a cart past a display of artificial Christmas trees at a Home Depot Inc. store in Newark, New Jersey, U.S., on Saturday, Dec. 10, 2011.
Emile Wamsteker | Bloomberg | Getty Images
“Our supply chains tend to be fairly long and have always been vulnerable but the pandemic made it more apparent. We had shutdowns across the world at varying times which caused significant delays and shortages and now as production recovers, the ports, logistics and trucking are all stressed,” Druehl added.
Butler said every year he pays for thousands of shipping containers to move product from manufacturing facilities in China to the United States.
“Since May, due to backups from Covid-19, it’s been a real struggle to just get containers,” Butler said, adding that he saw prices begin to climb in June.
“Last year we paid $2,000 to $3,000 for containers and this year we’re paying in the region of $20,000. We decided that we would pay the exorbitant rates that were being charged to make sure we got as many containers as we could,” Butler said, adding that he was short 1,000 containers but nearly 90% of his orders were fulfilled.
Butler said that this year consumers will potentially see a 25% price increase this year due to the hike in transportation costs.
Climate disruption a factor for real trees
Christmas trees loaded onto a truck for shipping at Downey Tree Farm and Nursery in Hatley, Quebec, Canada November 12, 2021.
Christinne Muschi | Reuters
Warner says it will also be difficult this year for consumers in the market for real Christmas trees thanks to a combination of supply chain disruptions and weather disasters influenced by climate change.
“Christmas tree growers also have shipping issues as well because they can’t find trucks to take the trees that they do have to market,” Warner explained when asked about potential tree shortages.
What’s more, while Christmas trees are farmed across the nation, the majority of America’s trees are from Oregon and Washington and have taken the brunt of extreme weather events.
“Floods, heat waves, wildfires and smoke from the fires has really, really hampered growers in the Pacific Northwest and the Midwest,” Warner said.
Christmas tree farmer Frans Kok, owner of Middleburg Christmas Tree Farm in northern Virginia, echoed similar concerns over the changing climate.
“Climate change is impacting all agriculture and in different ways,” he explained, adding that certain trees he once grew prevalently are now under siege by a fungus that emerged with changing weather conditions.
“And so, the price of trees is clearly going up and that’s in part because we are low on them,” he said, adding that this year he will pass on a $50 increase to consumers.
Still, Warner says not to panic.
“There will be a Christmas tree both real and artificial for everyone who wants to celebrate with one. It just may not be the exact kind, size or color you want,” she said, adding that consumers should aim to get their holiday shopping done as soon as possible.