November 21, 2008 / 8:42 PM / in 9 years

Christmas tree farms upbeat despite economy

VANCOUVER, British Columbia (Reuters) - Canada’s annual Christmas tree harvest is under way with farmers hoping that people’s desire to maintain a holiday tradition will again override their worries about a slowing economy.

The number of trees sold has not fallen dramatically in past economic downturns, said Fred Somerville, Ontario’s largest tree grower, who has not seen a drop in shipments to retailers so far this year.

“We’ve found that people tend to put away their financial woes and enjoy their family and Christmas. People who get a Christmas tree tend to still get them,” said Somerville, whose family has been growing trees since 1950.

Trees such as Fraser firs and Scots pines are harvested by commercial growers from mid-November to early December, when the trees are going dormant for winter and will retain water better after being cut.

There were about 2,400 farms growing Christmas trees in 2006, with the biggest production in Quebec, Atlantic Canada and Ontario, according to Statistic Canada.

Buying a tree may be a discretionary purchase, but Arthur Loewen a grower in British Columbia said his experience is that people still want one at home even they are planning to put fewer gifts under it.

“I think it’s that sense of tradition,” said Loewen.

Loewen said growers are not ignoring the weakening economy, and he is keeping his prices the same as last year.

Other farmers said they may benefit if more people decided to stay home for Christmas rather than travel because of the weak economy.

Canadian farms supply the bulk of the country’s domestic demand for fresh cut trees, as well as about 5 percent of the U.S. market, according to government figures, with the industry estimating its annual harvest at about 5.5 million trees.

The growers’ sales in 2007 were about C$55.6 million, down from C$73 million in 2006, but Statistic Canada attributed that drop to the surge in value of the Canadian dollar against the greenback at the end of last year, which cut the value of exports to the United States.

Sales had remained relatively steady in the decade before 2006, according to industry figures.

Some farmers are protected from the ongoing economic turmoil because the export orders they are now filling were placed early in the year before the economy soured, said Lewis Downey, executive director of the Canadian Christmas Tree Growers Association.

But those farmers might not make as much money as they expected when the export contracts were signed, because the Canadian dollar has dropped against the U.S. dollar since then, he said.

Today’s economic turmoil could also spell trouble for farmers when buyers place their orders for next Christmas in January and February.

“Instead of taking 1,000 trees, they’ll take 500, or they’ll delay. They’ll give a tentative order, but they won’t give a deposit or sign it,” Downey said.

According Statistic Canada the tree farmers’ biggest competition comes from Chinese factories. Canada imported C$44.1 million in artificial trees in 2007, mostly from China, a jump of 20 percent from the year before.

Somerville said the tree farming industry hopes it will benefit from growing consumer concern about the environment -- with choosing a renewable resource over plastic -- and is emphasizing that as new trees are planted and grow they remove carbon emissions from the air.

Reporting Allan Dowd, editing by Rob Wilson

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