The Retired Investor: Are Christmas Trees Worth It?
As Christmas arrives around the nation this weekend, tardy consumers are hitting the neighborhood Christmas tree lots and farms in droves. Late-coming artificial tree buyers are finding slim pickings at big-box stores as well. This is despite an average price increase this season of between 5 percent-15 percent.
Americans will spend nearly $6.6 billion on Christmas trees this season, according to the National Christmas Tree Association (NCTA). NCTA predicts consumers will pay an average of $86.59 for a live tree, and $122.60 for an artificial tree. Many shoppers could pay much more than that.
Last year, 75 percent of U.S. households, or 94 million homes, displayed a Christmas tree during the 2021 season, according to the American Christmas Tree Association (ACTA). This year, ACTA predicts Americans will purchase almost 21 million live trees, which is on par with last year's total. In addition, 6.5 million households displayed both live and artificial trees.
Supply chain issues had snarled artificial tree sales last year, so retailers ordered early this year and stocked up on inventory. It has turned out that they still sold out early in many locales.
As for living trees, there could be shortages of inventory depending on the region. In 2021, live tree farms were walloped by environmental conditions, which continued into this year. Wildfires, lack of irrigation, elevated temperatures, and drought were the main drivers of the loss of young Christmas trees in certain parts of the country. Experts expect climate change conditions will continue to bedevil farms in the future.
As a result, whether you choose a live or artificial tree this year expect to pay more. Nearly all of the 55 largest U.S. Christmas tree wholesalers are raising prices this year by as much as 5 percent-15 percent. Some wholesalers intend to raise prices even more. But don't blame the Grinch, blame inflation — rising prices for diesel, fertilizers, and chemicals. Supply chain issues and labor have contributed to higher prices, in addition to the weather problems for live trees.
Despite the prices, and lack of selection, 85 percent of consumers found that Christmas trees are worth it, according to the Real Christmas Tree Board, an industry marketing and research firm based in Michigan. Who can blame them, especially when buying a real tree?
For many in society who have become increasingly aware of the environment, Christmas trees can be guilt-free. Just one acre of trees provides enough oxygen for 18 people every day. One Christmas tree alone can absorb one ton of CO2 during its lifetime and with over 350 million trees growing at any one time, the environmental benefits are enormous.
So are Christmas trees worth it? My answer is a resounding yes. Just sit back for a moment, close your eyes, and remember the scent of that blue spruce, Scotch pine, or Douglas fir in your living room or den. I can almost feel that sticky sap on the branch, as we hung that special ornament. How much is that worth?
And that's not all. Picking out the perfect tree, hauling it home in the car, or through the field, and then wrestling it through the front door has become one of those yearly family traditions most families cherish. The actual decoration of the tree, whether real or artificial, becomes a work of art that even the youngest of us gets to experience and create.
I would like to wish all my readers a happy holiday season, with or without a Christmas tree. Take some time off, cherish your family and friends and hug someone.
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at firstname.lastname@example.org.
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