Christmas Tree Production

McKenna Tucker

Mr. Reuter

Economics

10 Dec. 2016

Christmas Tree Production  

Christmas is typically the largest economic stimulus for many nations around the world as sales increase dramatically in almost all retail areas. The United States' retail industry generated over three trillion U.S. dollars during the holidays in 2013. The holiday sales reflected about 19.2% of the retail industries total sales that year (Mortenson). The economic impact of Christmas is a factor that has grown steadily over the past decades.   

The economic impact of Christmas is a factor that has grown steadily throughout the world and will continue to be a significant event and key sales period for retailers and businesses. This can be evidenced in the fact that 29% of respondents in a 2016 survey stated that they expect to spend over 500 U.S. dollars on gifts for the holiday season. Christmas tree production occurs worldwide on Christmas tree farms, in artificial tree factories and from native stands of pine and fir trees. In the United States, between 35 and 40 million trees are sold during the Christmas season.  

According to the National Agricultural Statistics Service, the number of growers has decreased during the past decade (Mortenson). Christmas tree farms are seeing a reduction in supply while the demand remains high. In 2015 there was a change in harvesting trees causing prices to increase, which worried retailers that there might not be enough trees available later in the season (Burke). Kathleen Burke, reporter, indicated that “Last year, the number of businesses was getting slimmer… This year, we had people coming from other lots saying they don’t have trees anymore or don’t have a good selection (Burke). Due to the lack of tree supply, more and more people are having trouble finding Christmas trees.  

Oregon is one of the top producers in the nation for Christmas trees. In 2015 Oregon sold 4.7 million trees and 6.4 million in 2010, however the supply and demand has expected to grow this year. Due to the law of demand, more real trees are bought than artificial trees. A substitution effect also occurs since the price of artificial trees increases making consumers buy less of that product and more of real trees as a substituted good. “The drop in production has been met with increased demand” (Mortenson). The industry will most likely be shipping fewer trees overseas this year because the domestic demand is strong.

Overall, the supply of Christmas trees are expected to grow over the years. The economic impact of Christmas is a factor that has grown steadily over the past decades. So even if one year isn’t good for tree production, it doesn’t mean that the following years will be too.  

Works Cited

Burke, Kathleen, “Why You Might Need to Buy a Christmas Tree Early This Year.” Market Watch, 5 Dec. 2015, http://www.marketwatch.com/story/why-you-might-nee d-to-buy-a-christmas -tree-early-this-year-2015-12-01.

“Christmas trees sold in the United States 2004-2015.” Statista, 2016, https://www.statista.com /statistics/209249/purchase-figures-for-real-and-fake-christmas-trees-in-the-us/.  

Mortenson, Eric. “Christmas Tree Production Down as Market Stabilizes.” Capital Press, 25 Aug. 2016, http://www.capitalpress.com/Business/20160825/christmas-tree-production-down- as-market-stabilizes.    

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