Every year in late November, in central Padua, Italy, a spectacular Christmas tree goes up.
Heavy with baubles and aglow with lights (and the neon-lit signs of that year’s corporate sponsors), it not only marks the official start of the Christmas season. Being more than 20 meters tall, it quickly became a local landmark, a beacon for visitors who have lost their bearings in the middle of the city’s streets.
Such a beautiful Nordmann fir, which has grown for more than twenty years, it could cost the city more than $200,000 harvesting, transportation and decoration. Not everyone buys 20-foot trees, but it wasn’t long ago that this variety was so popular in Europe that the head of the Danish Christmas tree growers’ association at the time called it the “Rolls-Royce of Christmas trees,” capable of fetching double the price of other varieties. cheap ones.
But today, across the street from Padua’s glistening tree, you can find a two-meter (6½-fir) Nordmann fir for the low price of 15 euros ($22), tucked away in the corner of a dimly lit grocery store.
This fact shows that something is changing in Europe, where the prices of the Christmas tree they have been falling for the better part of the last decade – in sharp contrast to Canada, where the price is in other regions for a six-foot (1.8-meter) tree it is $75 or more.
While concrete data on European Christmas tree markets can be hard to come by, it seems to be the case nonetheless shrinking forestssmall farms and many people to supply, their trees today are more expensive than in Canada. Why?
It’s a vicious cycle
Like Canada, only a few regions in Europe are responsible for the production of many Christmas trees.
Quebec, Ontario and Nova Scotia to dominate Canadian industrywhich produces 80 percent of the country’s Christmas trees. In Europe, Denmark and Germany are the leaders, producing almost half of the trees sold in this continent.
Growing a Christmas tree looks romantic on the screen, but in reality, this is a cruel business.– Jay Zagorsky, economist at Boston University’s Questrom School of Business
Historically, in both areas, these producers are mostly small farms, planting trees on an area of just a few hectares. After all, Christmas trees keep farmers with idle fields busy, a slow-growing crop that generates agritourism in the off-season.
“In Austria, you can live on two hectares [five acres] of Christmas trees,” said Claus Jerram Christensen, managing director of the Danish Christmas Tree Association. “You add sheep, and the family can live on that alone.”
That means that “when there are good prices, there are more farmers,” said Christensen. Farmers are jumping on the bandwagon and planting a few stands to get cash when they need it most.
But trees like Nordmann firs take about ten years to reach maturity.
“Eight to 10 years later … we have a lot more trees,” he said. “Prices are going down and people are saying this is not a good business anymore.”
“Christmas tree planting looks romantic on the screen, but in reality, it’s a brutal business,” said Jay Zagorsky, an economist at Boston University’s Questrom School of Business. “You have a diversified industry… [with growers] to make independent decisions, many years into the future, at the margins of low profits.”
When you do that, he says, you get more price flexibility.
In other industries facing similar problems, Zagorsky said, the solution is often consolidation – the emergence of large players who can’t absorb more losses due to supply fluctuations.
It looks like the trend is continuing – and Padua’s 15 euro grocery store trees are one manifestation.
“That was a market changer,” Christensen said. “Supermarkets take a large share of the market from the younger participants, who are usually the elderly [for whom] it’s hard to get their kids to take over.”
In the 20 years of operating the Bastien Christmas Tree Farm in Essex, owner Ovide Bastien says he has seen climate change firsthand. To combat it, Bastien has been planting climate-resistant Christmas tree varieties and using special non-volatile and long-lasting bonded fertilizers. But Bastien says that means more installation costs.
That challenge is made worse by European Union policy, which makes many Christmas trees ineligible for agricultural subsidies. With severe competition for land, many small farmers are abandoning tree planting to pursue more profitable activities.
In Canada, too, many smaller operators are finding it difficult to plan successions – leading to reduced supply.
“I [average] the age of a Christmas tree grower is between 65 and 85,” said Shirley Brennan, executive director of the Canadian Christmas Tree Growers Association. “We’ve lost, in 10 years, 20,000 acres of Christmas tree growing — and that was because of retirements . “
Unlike in Europe, where demand is stable, Canada’s demand for Christmas trees is increasing at the same time that supply is decreasing.
Just 10 years ago, the value of the Canadian market dropped from $53 million to $160 million.
“We couldn’t have predicted that,” Brennan said.
As Christmas tree growers retire, who will take over? The average age of the industry is 59 years — about 14 years older than the average Canadian, Statistics Canada said.
Canadian farmers are under other price pressures, too: Rising machinery and fertilizer costs have driven inflation across the economy.
“Demand is going up and prices are going up, but so is everything else,” he said.
How tax threats can affect tree values
That won’t change anytime soon. Zagorsky points out that the high prices of Chinese goods proposed by the incoming American president Donald Trump will blow up the cost of plastic trees in the US, which have been eating into the market of real trees for decades and are now available in the US. more than three-quarters of US households.
If that happens, he said, “there will be a big shift toward new trees. And where do most of our new trees come from? They come from Canada.”
In Europe, on the other hand, the glut of the past few years seems to have split the market. Retailers and chains offer discount trees for next to nothing – less than 20 euros ($30) in most stores – while small farms, such as Padua’s Azienda Agricola Berton Giuseppe, can charge three times the price of the same variety.
But Giuseppe Berton, the owner, says they can sell theirs with a guarantee of quality.
“Grocery stores take broken, second-hand trees,” he said. “It’s a completely different quality … They don’t really compete with us.”
It’s a strategy that seems to be finally working. European trees are still a long way from Canadian prices – but after a decade of decline, the average cost of a tree is expected to rise by a few euros this year.
“We’re still at the bottom of the curve,” Christensen said, “but we’re moving in the right direction now.”
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