When you think of Christmas trees, you probably picture twinkling lights, cozy evenings, and the scent of fresh pine; what you don’t think about is the massive challenge of forecasting demand for a product that takes years to grow. Christmas tree farmers are, in fact, master planners, and their unique approach to forecasting offers valuable lessons for businesses of all kinds.
For Christmas tree farms, everything comes down to one month of the year—December. That’s it. Their entire year of revenue hinges on a small window of time.
Consumers typically purchase Christmas trees at big box retailers like Walmart or Home Depot, or at picturesque “choose and cut” farms where families make a day of it. Each sales channel presents different challenges for farmers, from negotiating with massive retailers to creating an “agro-tourism experience” that attracts consumers to local farms.
But the real challenge isn’t just ensuring sales for this year—it’s predicting demand 7 to 10 years in advance. Why? Because that’s how long it takes to grow the average Christmas tree.
Most trees take an average of 7 years to grow to the popular 5-6 foot size. Larger trees can take up to 14 years. Farmers purchase seedlings from suppliers, carefully nurture them through unpredictable weather, pests, and droughts, and then sell them for a modest return. According to the National Christmas Tree Association, the typical real Christmas tree costs buyers around $75. Multiply that by 20 to 25 million real trees sold annually, and the industry generates about $2.5 billion each year.
This is far from a get-rich-quick business. Christmas tree farming is labor-intensive, reliant on land that could be used for higher-yield crops, and subject to market fluctuations—and climate disasters.
The 2008 recession may feel like a distant memory, but Christmas tree farmers are still feeling its effects today. During the downturn, fewer customers were buying trees, leaving farmers with a surplus, so they planted fewer seedlings in the years that followed. Fast forward to today, and we’re seeing the result: a tighter supply and higher prices for customers.
This is what makes Christmas tree farming so unique. Farmers need to predict consumer demand a decade in advance, weather economic cycles, and hope their forecasts hold up despite the curveballs thrown by unusual weather patterns.
As if predicting market demand 7-10 years out wasn’t hard enough, farmers also face increasingly turbulent weather patterns. Drought conditions, wildfires, and hurricanes have wreaked havoc on tree farms across the country.
For example, Oregon, the largest producer of Christmas trees in the U.S., is home to nearly 300 farms with an inventory of 35 million trees. But wildfires in recent years have threatened production. Meanwhile, North Carolina, another major producer, has seen farms impacted by storms like Hurricane Helene.
So, what can businesses learn from the world of Christmas tree farming?
Christmas tree farmers may not always get the recognition they deserve, but their business is a testament to long-term planning and adaptability. They plan years ahead, nurture their product through countless challenges, and deliver a small but magical part of the holiday season to millions of homes.