Tuesday, December 05, 2017

Is There A Christmas Tree Shortage?

See No Tannenbaum! There’s a Christmas-Tree Shortage by Valerie Bauerlein of The Wall Street Journal.

They seem to be saying that there has been a decrease in supply. That will cause prices to rise and quantity to fall. But just because there are fewer trees for sale than there used to be does not mean there is a shortage. That requires that quantity demanded is greater than quantity supplied. They are equal, although at a lower quantity than before.

"This Christmas, supplies of live trees are tight. Some Christmas tree lots are closing almost as soon as they open, citing a shortage of trees and presaging a potential national run on firs this weekend, traditionally the busiest of the tree-buying season.

Some suppliers blame extreme weather this past year. Some blame changes to agriculture, like small farmers in Oregon, the biggest tree-producing state, turning to grapes and cannabis instead.
But most growers blame the Great Recession.

It takes seven years to 10 years to grow a tree. Many farmers planted fewer seedlings or went out of business altogether in the years after the housing bust, when consumers pulled back spending. At the same time, total acreage in production declined 30% between 2002 and 2012, according to the latest federal data available.

The ensuing tightening of supply started last year and live-tree buyers spent an average of $74.70, more than double the average in 2011, according to the National Christmas Tree Association, a trade association for the live-tree industry. To meet 2016 contracts, some growers cut trees from this year’s crop early, making the 2017 supply even leaner.

The lack of supply is being felt most acutely in states including Florida, Arizona and Illinois—those farther from Oregon and North Carolina, which account for 37% and 25%, respectively, of Christmas tree production.

Customers are likely to pay at least 10% more than last year for a 5-foot to 7-foot tree, and up to 20% more for a taller tree, said Steve Troxler, agricultural commissioner for North Carolina."
Previous Christmas posts:

Are Homemade Gifts Better Or More Special?

What Anthropologist Melvin Konner Fails To See When He Criticizes Economists And Their Views On Gift Giving 

Is Christmas Gift Giving Inefficient?

No comments: