We recently returned from our annual Spring trek to the Pacific Northwest Christmas Tree growing region. During this trip, we visit as many farms as we can. The growers are pretty rested and relaxed this time of year, so we get some quality time with them. What we learn from them during these visits explains a lot about our current situation as retailers, and also provides us with insight as to what we may expect from the farms in the future.
One grower that we visited told us that he has been increasing planting, and expects to have more trees available starting next year. We think that overall 2018 availability will be similar to 2017.
It looks like the last few years of grower price hikes have put the farms back on solid ground. We think that prices may have stabilized. An overall shortage still exists, however. The farms that have contracts with big box retailers are still scouring other farms to purchase trees in an effort to honor their own commitments. We don’t think this will affect us any differently than it already has. We are frequently reminded by the mid sized farms that we buy from however, that filling our orders of mixed species, sizes, grades, and split loads, is more time consuming, complicated, and costly than most of their other customer’s orders. Reading between the lines, they are telling us that although they maintain their loyalty to us, if we weren’t around, they wouldn’t have to work quite as hard, and would probably make a few more bucks. One grower told us that it can take up to an hour longer to load one of our trucks.
The biggest challenge that the grower’s are facing today is the continually increasing shortage of labor. Another is their continually increasing operating costs across the board. Those that survived the recession and tree glut are having to make changes in order to become more productive and efficient in order to survive in today’s farming environment. One that we know is experimenting with narrowing the taper on some of his trees, to lighten them up and make them easier to handle. This would also reduce freight costs by loading more of these trees in a van, and increase productivity by planting more trees in the same field. We don’t know if or when we may actually see a shipment of trees like this get delivered to a retailer. Another has stopped growing anything over 8 ft., because of their weight and the difficulty of handling them. One grower explained that in the same amount of space and time it takes to grow a 16 ft. tree, he could grow 8 7/8 ft. trees twice. In addition, the risk of damage to them during harvest, baling, loading, shipping, etc, is greater since the branches tend to be more brittle than on others. We may see a future decrease in the overall availability of bigger trees.
Truck drivers’ hours of service regulatory requirement for trucks to be equipped with electronic logging devices is now in effect. The new regulations could translate to a decrease in truck availability, and an increase in freight costs. Unfortunately there is no way to know until the shipping Season actually begins.