Extreme summer heat did a number on Christmas tree farms in the Pacific Northwest, limiting the supply from areas hit by triple-digit record temperatures. With the holidays fast approaching, the impact is being felt across the country.
Oregon produces roughly a third of the nation’s Christmas tree supply, according to the latest Census of Agriculture published in 2017. The National Christmas Tree Association, which represents hundreds of tree farms and other affiliated businesses, lists Oregon as the top Christmas tree-producing state in the country.
|States with most Christmas trees cut|
|1. Oregon (4.7 million)|
|2. New York (4 million)|
|3. Michigan (1.5 million)|
|4. Pennsylvania (1 million)|
|5. Wisconsin (700,000)|
“The heat dome was certainly the worst,” Tom Norby, owner of Trout Creek Tree Farm in Corbett, Oregon, told FreightWaves. “We’ve never had 116 degrees, let alone for three days in a row. It was a killer.”
That 116 degrees was an all-time high for Portland, which is just 25 miles west of Norby’s farm.. He said Oregon’s farms were largely spared from the 225,000 acres that were scorched across the state from wildfires but stressed that the heat wave in late June did a lot more damage.
A heat dome is an exceptionally hot air mass that develops when high pressure aloft prevents warm air below from rising, thus trapping the warm air as if it were in a dome. This summer’s heat dome came at the absolute worst time, when seedlings were trying to take root and push out new shoots.
When the trees are exposed to too much sunlight and heat, without sufficient moisture, parts of the trees or the entire trees can sunburn, resulting in damage or death.
“There are literally fields with hundreds of acres of dead seedlings — just 100% mortality across the entire field. If you produce a million trees a year, you don’t have time to deal with that,” Norby said.
Besides losing every single one of his seedlings, Norby also lost several large trees. The seedlings cost roughly $2 each to get in the ground, and he plants about 10,000 a year. So the damage left a mark. However, Norby said it’s not a disaster for him but more like a “big ouch.”
“Christmas trees are kind of like an annuity. You need some every year in order to keep things rolling,” Norby explained. “So having that kind of mortality kind of creates a little dent in your inventory. And it’s not such a big problem for one year, but if it becomes a two-year issue, it becomes a big problem.”
The Oregon State University Extension Service estimated the seedling mortality rate statewide for noble firs hit 70% by early September. Other species of seedlings showed better survival but still higher loss percentages than recent years.
According to various organizations, consumers can expect to pay anywhere from 10% to 30% more for a tree this year due to the lower supply. Doug Hudley, seasonal spokesperson for the National Christmas Tree Association, told FreightWaves that most of the pinch will be felt out West.
“Most of the trees grown in the Pacific Northwest are sold in the western states, and [those produced in] the East sell in the eastern states,” Hundley explained. “So, there could be a problem with not having enough trees in the west, but not in the East.”
President of the Oregon Christmas Tree Growers Association, Norby has been running his small Christmas tree farm in the Willamette Valley since 1998. He usually sells 6,000 to 7,000 trees a year and, despite sales in the lower end of that range, he didn’t raise prices.
He admitted that other tree farmers in Oregon have been hit a lot harder, with some suffering total crop losses. The extent of damage was situational, dictated by crop size, where trees were in their growth cycles and whether farmers sprayed herbicides. Ironically, those who didn’t spray had more weeds that ended up providing protective shade for many of their seedlings.
In Oregon, where saplings were significantly impacted compared to other Northwestern states, it could be the supply seven to 10 years from now that sees the pinch. The average Chrstmas tree takes seven years to fully grow, depending on the species and how tall growers want them to be before harvesting.
Impact on freight
Many economists say a steady increase in consumer spending on home goods throughout the pandemic and overall fatigue from almost two years of Covid-19, as well as larger gatherings this holiday season due to vaccinations have been indicators of higher demand this season.
Also, as more people have become aware of climate change and the environmental impacts of artificial trees, they’ve sought out real ones. As the pandemic continues, families are looking for an outdoor experience like visiting a farm or nursery in search of a perfect tree.
Another indication of high demand is recent upward pressure on trucking spot rates out of Oregon. A spot rate, also called a spot quote, is a one-time fee that a shipper pays to have a carrier move a load at current market pricing. Spot rates are a form of short-term, transactional freight pricing that reflect the real-time balance of carrier supply and shipper demand in the market.
As the demand for real trees began rising last month, the cost of shipping them followed suit. The FreightWaves SONAR chart above, featuring the Trusted Rate Assessment Consortium (TRAC) index, shows the spot rate on the Portland to Los Angeles lane jumping from about $1.70 per mile to about $2.05 per mile by mid-November, rising as high as nearly $2.30 by Thanksgiving. It remained above $2.20 as of Tuesday.
Across the border
The impacts of the heat spread northward into British Columbia, where Lytton hit an all-time record high of 121 degrees on June 27. This was also the all-time record high for Canada. The small town was destroyed by a wildfire during the heat wave.
About 100 miles south, Mark Futter’s Chrstmas tree crop at Grumpy Goat Acres in Maple Ridge was hit hard by the heat, as well as a drought that lasted all summer. Highs reached 95 to just over 100 degrees, as opposed to the normal 70s, and typically it rains regularly through July.
“We just had no water,” Futter told FreightWaves. “I have no irrigation system. I had a lot of trees that were probably on the edge, and they would have made it through if it was a normal summer.”
He and his wife bought the small 2-acre farm a year ago. It wasn’t quite full of trees at the time, so he had to restock it. A lot of seedlings he planted didn’t survive. Neither did more than 200 trees, leaving him with about 3,000.
Fortunately, like Norby, the farm isn’t his family’s primary source of income. So he didn’t have to raise his tree prices much due to the extreme weather, posting this on the farm’s Facebook page: “A huge jump in cost is not fair to anyone and to me is not in keeping with the true spirit of Christmas. We have decided to keep it within reach and not burden our customers.”
FreightWaves market expert Zach Strickland contributed to this article.
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