If you’ve been shopping for a Christmas tree you might of noticed a trend. They have been progressively more expensive the last few years. The average cost of a live Christmas tree this year went up to $77 from $75 last year and well above the $46 average price tag of seven years ago. So, what’s really up with Christmas tree inflation?
The American Christmas Tree Association, yes there is one, just released an annual report that provided some insight into what is really going on. Plus, there is also a little additional research on my end. Here is what’s really going on. The average time it takes to grow a live Christmas tree is nine years. Walk back nine years ago and you had Americans, and Christmas tree farmers reeling from the Great Recession. Demand for trees declined and prices crashed lower as farmers were simply trying to sell what they had to get what they could. That often meant selling at a loss. Many farmers went under and others could not afford to plant crops as abundantly as they would have in normal conditions. Even though the recession technically ended in 2009, the Christmas tree industry did not bottom out until 2010.
Now, let's fast forward to today. We have the best economy in a generation and the lowest unemployment rate in 49 years. This only means that the demand for trees is the highest it’s ever been. That one-two punch is what is behind this trend.
Yes, wildfires have not helped the west coast but that really does not appear to be anywhere near a major catalyst. Here’s the bad news, expect prices to continue to rise through Christmas of 2019. However, there is better news, prices should begin to balance out after 2019 and likely will start coming down as post-recession trees make their way into your home.
Interestingly what’s started to happen is an increase in fake trees. In 2010, 77% of trees purchased were real. We’re currently pacing about 56% this year. The average cost of a fake tree is running at $107.
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