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Every year at the end of November in the central square of Padua, Italy, a spectacular Christmas tree is lit.
Full of baubles and bright with lights (and the neon-illuminated signs of that year’s corporate sponsors), it doesn’t just mark the official start of the Christmas season. With a height of more than 20 meters, it is quickly becoming a local landmark, a beacon for tourists who have lost their bearings among the medieval streets of the city.
Excellent Nordmann firs like this one, grown for more than two decades, it can cost the city more than $200,000 for harvesting, transport and decoration. Not everyone buys a 20-meter tree, but it wasn’t that long ago when this variety was in such demand in Europe that the head of the Danish Christmas Tree Growers Association at the time called it the “Rolls-Royce of Christmas trees.” they can fetch twice the price of other, cheaper types.
Yet today, across from the glittering trees of Padua, you can find a two-meter (6½-foot) Nordmann fir for the lowest price of 15 euros ($22), tucked away in the corner of a dimly lit grocery store.
This fact indicates that something is changing in Europe, where the prices of Christmas trees have been falling for most of the last decade — in stark contrast to Canada, where the average price in some regions for a six-foot (1.8-meter) tree, it’s $75 or more.
Although it is difficult to obtain specific data on European Christmas tree markets, it seems that despite shrinking forestssmaller farms and more people to supply, their trees are much cheaper today than Canadian ones. Why?
Vicious circle
As in Canada, only a few regions in Europe are responsible for the vast majority of Christmas tree production.
Quebec, Ontario and Nova Scotia dominate Canadian industrywhich produces 80 percent of Christmas trees in the country. In Europe, Denmark and Germany lead the way, producing almost half of the trees sold on the continent.
Growing a Christmas tree looks romantic on screen, but in reality it’s brutal work.– Jay Zagorsky, economist at Boston University’s Questrom School of Business
Historically, in both places, these producers are actually many small farms that grow trees on only a few tens of hectares of property. After all, Christmas trees are a good side hustle for farmers with unused land, a slow-growing crop that generates agricultural tourism in the off-season.
“In Austria you can live off two hectares (five acres) of Christmas trees,” said Claus Jerram Christensen, director of the Danish Christmas Tree Association. “You add a sheep and the family can live on that alone.”
That means “when prices are good, there are more growers,” Christensen said. Farmers are leaning in and planting a few plantations to cash in on the high demand.
But trees like the Nordmann fir take nearly a decade to reach maturity.
“Eight to 10 years later … we just have too many trees,” he said. “Prices are falling and people are saying this is not a good deal anymore.”
“Growing a Christmas tree looks romantic on screen, but in reality, it’s a brutal business,” said Jay Zagorsky, an economist at Boston University’s Questrom School of Business. “You have a relatively fragmented industry … (with growers) making independent decisions, many years into the future, with low profit margins.”
When you do that, he says, you get big price fluctuations.
In other industries facing similar problems, Zagorsky said, the solution is often consolidation — the emergence of larger players that can absorb more losses from fluctuating supply.
It seems that this trend is already well under way — and the 15-euro Paduan Christmas tree in the store is just one of the manifestations.
“It’s a market shift,” Christensen said. “The big stores are taking more market share than the smaller players, who are often older people (for whom) it’s hard to get their kids to take over.”
In his 20 years of running Bastien Christmas Tree Farm in Essex, owner Ovide Bastien says he’s seeing climate change first-hand more and more often. To combat this, Bastien grows climate-resistant Christmas tree varieties and uses a special fertilizer with a coating that does not evaporate and lasts longer. But Bastien says that means more input costs.
This challenge is exacerbated by European Union policy, which makes most Christmas trees ineligible for agricultural subsidies. Due to fierce competition for land, many small farmers are abandoning tree farming for more lucrative jobs.
In Canada, too, many small operators are struggling with succession planning, leading to a reduction in supply.
“(The average) age of a Christmas tree grower is between 65 and 85,” said Shirley Brennan, executive director of the Canadian Christmas Tree Growers Association. “We lost, in 10 years, 20,000 hectares of Christmas trees – and that only because of retirement.”
Unlike Europe, where demand is fairly static, Canadian demand for Christmas trees is skyrocketing at the same time as supply is shrinking.
In just the last 10 years, the value of the Canadian market has jumped from $53 million to $160 million.
“We couldn’t have predicted that,” Brennan said.
As farmers retire, who will take over? The average age in the industry is 59 — about 14 years older than the average Canadian, Statistics Canada says.
Canadian farmers are also under other price pressures: rising equipment and fertilizer costs have fueled economy-wide inflation.
Demand is growing and so are prices, but so is everything else, she said.
How tariff threats can affect tree prices
That is unlikely to change anytime soon. Zagorsky points out that the high tariffs on Chinese goods proposed by incoming US President Donald Trump would explode the prices of plastic trees in the US, which have eaten into the market for real trees for decades and are now in more than three-quarters of American households.
If that happens, he said, “there will be a big shift toward fresh trees. And where do a lot of our fresh trees come from? They come from Canada.”
In Europe, the glut of the last few years seems to have split the market. Wholesalers and chains offer the tree at a discounted price – less than 20 euros ($30) in most stores – while smaller farms, such as Aziende Agricole Berton Giuseppe in Padua, can charge more than three times the price for the same variety.
But Giuseppe Berton, the owner, says that they can make their sales with a guarantee of quality.
“Stores take trees that are actually junk, used stuff,” he said. “It’s a completely different quality… They don’t really compete with us.”
It’s a strategy that finally seems to be working. European lumber is still a long way from Canadian prices — but after a decade of decline, the average lumber price is expected to rise by several euros this year.
“We’re still at the bottom of the curve,” Christensen said, “but we’re going in the right direction now.”
