The Great Christmas Tree Shortage 

The 2017 short supply is linked to fewer tree farms and a love of Nutella—in China

If you end up in a frantic scramble to find a Christmas tree in the coming weeks, or you suffer sticker shock at tree prices this year, you can probably blame China—or more specifically, the popularity of Nutella in China.

"Some of our legacy Christmas tree farms in the Pacific Northwest stopped growing trees several years ago," said Lindsay Schramm, co-owner of North End Organic Nursery, a Treasure Valley go-to destination for holiday greenery located at 3777 W. Chinden Blvd in Garden City. "Many of those growers shifted away from Christmas trees and have replaced them with hazelnut trees—you know, the nuts they use to make Nutella. A lot of that demand has been driven by China. Apparently Chinese people really love Nutella."

Nutella, the incredibly popular hazelnut/cocoa spread, was first introduced by Italy-based Ferrero in the 1960s. China Daily reported in 2015 Ferrero was investing $300 million to build a manufacturing facility in Hangzhou, China, and the confectionery company claimed "a commanding 24 percent of the Chinese chocolate confectionery market," according to China Daily.

The Chinese/Nutella holiday disruptor may be at the core of one of the most surprising examples of supply and demand in recent memory, but it does little to help Christmas shoppers in a quest to find the perfect tree. During the week before Thanksgiving, the phone at NEON seemed to ring off the hook as employees fielded a nearly endless stream of requests about tree availability.

"They want to know if we're still taking pre-orders," said a NEON employee.

Schramm did some quick math in her head.

"Well, if they want a really big one, a 12- to 15-foot tree, we'll have to double-check our availability," she answered, then took a deep breath and smiled.

"The word is getting out on the limited supply," Schramm said. "This year is going to be very interesting."

NEON does have Christmas trees available. Schramm found 700 beauties (many have been spoken for), and her somewhat melodramatic journey in search of those trees could serve as a plot for a Hallmark Channel television holiday movie.

Why the Shortage?

Schramm said the business of growing and wholesaling Christmas trees was already a "crazy industry" 10 years ago, but she has always been lucky to work with supplier in the Idaho panhandle.

"Our first Christmas tree grower was a family farm, way up in Sandpoint," said Schramm. "They were fantastic, but they retired a few years back, so that sent us in search of a new vendor which led us to start looking in Oregon."

According to the Pacific Northwest Christmas Tree Association, around 42,000 acres of land in Oregon is dedicated to growing Christmas trees, and it outpaces every other state in the nation in its annual Christmas tree production: 5.2 million Oregon Christmas trees were harvested in 2016. Compare that to 3.5 million in North Carolina, 3 million in Michigan and 2.3 million in Pennsylvania. The association estimates Oregon Christmas trees generated $90 million in wholesale sales in 2016.

The most important statistic from the PNCTA, however, is the average number of years it takes to produce a 6-foot Christmas tree in the Pacific Northwest. A Douglas fir takes about 7 years, a grand fir requires 8 years, a noble fir takes 9 years and a rare concolor (white) fir can take as long as 12 years to grow.

"After we lost our provider in Sandpoint, we found a family farm in the Willamette Valley that wasn't spraying with herbicides, which is in line with everything we're doing here at our nursery," said Schramm. "But then, fast forward to about five or six years ago."

As consumers may recall, retailers complained about a glut of trees in the Treasure Valley market in 2011 and 2012 that caused shrinking profits, and pushed prices lower and lower.

"Quite frankly, a number of the Christmas tree growers weren't making any money, so they started planting hazelnut trees instead," said Schramm. "And it's not as if those hazelnut trees are being cut down anytime soon."

In the meantime, the existing stock of Oregon Christmas trees continued to deplete, with the past two years seeing a dramatic drop in supply.

"Do you remember last Christmas?" asked Schramm. "You used to be able to see Christmas tree lots on practically every corner across the Treasure Valley, but by the 10th of December last year, Costco was sold out, Fred Meyer was sold out, and people started calling around everywhere because they were caught by surprise.

That prompted Schramm to start her hunt for her 2017 supply of Christmas trees last spring. She said some growers wouldn't even entertain a reasonable offer because their depleting stock was triggering extremely high wholesale prices.

"I found a grower outside of Eugene, Oregon, so we packed our family into the car and drove out there to meet the grower in person," said Schramm. "I thought everything was good. I got back to Boise, did the math and called the grower back to get an invoice, He said, 'No, we're not going to do it that way. Send me a $12,000 check, and then I'll secure you the trees.' I said, 'But I have to get an invoice. That's how the business always worked before.' He said, 'Well, guess what? The price of the trees just went up.' I was getting fleeced."

Schramm said in spite of the volatility in the marketplace, she had to stand her ground. That said, she was becoming worried.

Back to the Panhandle

Schramm said she got increasingly nervous and sequestered herself in the basement of her home, calling scores of farms, nearly all of them giving her bad news.

"But then, out of the blue, I found a family farm in Sandpoint, and get this: They were right down the road from the first family farm we did business with many years ago," said Schramm. "I hope you won't mind if I don't give you their name. It's a challenge to find a really good farm right now."

Just then, a huge refrigerated truck rolled into the expansive NEON lot with 700 fresh-cut grand fir trees from northern Idaho. According to the National Christmas Tree Association, the grand fir, which takes an average of eight to 10 years to mature, grows naturally in British Columbia, Canada; but the Idaho panhandle region is the most desirable seed source for the tree variety. "The grand fir smells fantastic," said Schramm. "They're fluffier and wider and a bit different from the tall skinny trees that some people are accustomed to. I secured 700 of them. What's interesting is that they're coming from a region where there has been eight inches of snow already, so they've been in suspended animation."

North of Somewhere

The great Christmas tree shortage of 2017 is hardly the first challenge NEON has overcome. At its original Hill Road location in 2011, United Water dug up a significant stretch of Hill Road as part of a $1.9 million installation of a new water main between Harrison Boulevard and 36th Street. The seemingly endless road reconstruction happening outside its doors sent sales plummeting nearly 75 percent compared to the previous year.

"We honestly don't know what to do anymore," said NEON co-owner Elisa Clark in 2011. At the time, Schramm said the business would try to limp toward the holidays, but things looked bleak for 2012.

"We don't even know if we'll have the cash on hand to reopen next year," Schramm said.

NEON did reopen in 2012, barely recovering from lost revenue. A core group of customers and a unique mix of events, like seed swaps, salsa festivals and food truck rallies helped the nursery endure a one-two punch of limited access and a crippling recession that claimed a number of small businesses. In 2014, the owners of NEON concluded that they needed to press the restart button and move to a new location.

"The [Hill Road] location was just too expensive for us, so we sold it," said Schramm in 2014, confirming that Boise-based KB Financial had purchased the Hill Road property with plans of building 28 townhomes on the 3.3-acre site. NEON owners had their eyes on a new location, which would allow them to open a shop about four times the size of the Hill Road store, but the new site was nowhere near the North End.

"We moved here in December of 2014," said Schramm, walking through the now three-year-old NEON shop on Chinden Boulevard. "Yes, we're in Garden City now, but we're still the North End Organic Nursery because we're on the north end of somewhere. Boise's North End is where our roots were and that nurtured us into the company that we are today. The good news is that the culture that exists in the North End has spread, and there are a lot more people outside of the North End that are interested in earth-friendly practices and environmental friendliness and everything that NEON is about."

As Treasure Valley lifestyles evolve, so too has the NEON mission.

"It's about people who may have never gardened before. It's about including people who have scaled back and have smaller, urban gardens," she said. "It's really about extending the growing season as far out as possible."

'A Giant Piece of Broccoli'

Schramm says selling a Christmas tree is more of an art than a science.

"It's purely emotional. Nobody really comes to buy a Christmas tree in a bad mood. We decorated the Christmas tree lot, so people can take photos of their shopping experience," said Schramm. "Our employees act more like models than merchants. People want you to spin the tree, maybe spin two trees at once, but all we can really do is just stand there, hold the tree, and let you picture it with lots of ornaments and lights inside your home."

And as far as the often-heard debate over whether it makes good economic or environmental sense to buy a live Christmas tree rather than an artificial one, Schramm is anxious to tell anyone that purchasing a live tree is in synch with NEON's mission of sustainability.

"You've got to look at Christmas trees as an agricultural crop. It's a giant piece of broccoli. It's a crop that is grown across the U.S. It keeps farm lands going, creates habitat, establishes wild areas for animals, retains soil and produces a ridiculous amount of oxygen. Ultimately, it's a locally farmed product that supports family owned farms."

Enjoying the benefits of a live Christmas tree in your living room might require some smart shopping this year.

"We'll sell every last one of our trees; I have no doubt," said Schramm. "And I can't help myself from thinking about next year already."

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