Oregon Christmas tree growers braced for bad season

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Seven-foot Noble Fir Christmas trees are being loaded to be shipped to Mexico from Cory Miller's farm in Eagle Creek. One truck will hold 600 to 800 trees.AP

PORTLAND — Darcy and Cory Miller have seen many market fluctuations during the nearly three decades that they have grown and sold Christmas trees at Deep Creek Tree Farms in Eagle Creek.

But never one as brutal as this.

"Things are bad right now," Darcy Miller said. "It's time to cut and burn."

She means that literally.

Miller, other growers and industry experts say low wholesale prices and sagging consumer demand mean a record number of unsold trees in fields across Clackamas, Marion, Polk and Benton counties will be chopped down at season's end and heaped onto burn piles.

Oregon remains No. 1 in U.S. production of Christmas trees with 7.34 million sold in 2008 at a value of nearly $110 million. Sales increased by nearly 300,000 trees compared to 2007.

But the up-and-down price cycle that typically roils the industry, combined with a national recession that's left consumers skittish at best, is bound to trim those numbers over the next several seasons.

"Right now, we're all being forced to sell a crop for less than it takes to produce it," Miller said. "Add in the fact that no one can get bank loans, and it's just a certainty that a lot of small farmers are going to get wiped out."

Christmas trees are, by nature, a cyclical crop, said Mike Bondi, Clackamas County's extension forestry agent. Once a field is planted, it takes anywhere from five to 10 years before the trees are large enough to cut, ship and sell.

In Oregon's case, more than 90 percent of its Christmas trees are exported, the bulk of them to California and other western states.

Record-high prices in the early part of the decade persuaded increasing numbers of farmers to forgo other crops and invest in Christmas trees, instead, he said. The nearly 1 million trees planted in 2004, for instance, nearly doubled the amount planted this year.

But now, with all those trees reaching maturity, supply is far outstripping demand. As a result, a 7-foot-tall noble fir that sold wholesale for $25-$30 only three or four years ago will fetch maybe half that this Christmas season.

"It's going to be enough to make some growers want to get out," Bondi said. "They're going to decide that their money and energy can be better spent elsewhere."

Two factors are denting the equally important demand side of the equation, Bondi said.

One is the rise in popularity of artificial trees. They've been enough of a thorn in the industry's side that the Pacific Northwest Christmas Tree Association, the industry's Salem-based trade group, launched a marketing campaign this year in an attempt to persuade consumers to "go green" by buying real trees.

The other factor is a sagging overall economy, which is likely to make buyers snap up shorter, less expensive trees or perhaps purchase a single tree rather than trees for multiple rooms.

So where is that likely to leave unharvested trees that by next year will be too big to market as Christmas trees?

"If they are Douglas fir, some farmers will just thin every third row, come back in 10 years and manage it as forest land," Bondi said. "A lot of other species are going to be disposed of in January."

Stan Low, owner of Highland Farm in Beavercreek, doesn't think the Grinch should start cackling just yet. He is seeing the same pattern of late sales that other growers are but is holding out hope that more orders will flow in as crunch time approaches.

"We don't know just what to expect of consumers this year," said Low, whose parents started the business in 1943. "But I noticed that retailers had under-ordered some popular toys this year, and they're scrambling now to try to get more. Maybe the same thing will happen with Christmas trees."

In Eagle Creek, Darcy Miller isn't so sure.

She watched anxiously five years ago as people with "no clue about the business" but lured by high prices started planting every vacant field in sight. Now, with those trees ready for the saw, she is equally fearful that retail lots around the region are about to be flooded by trees priced far below a level where anyone could make a profit.

"We'll see if people are desperate enough to do that," she said. "If they are, everybody's legs will be cut off."

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