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Why your Christmas tree costs more — again

Ronald D. White, Los Angeles Times on

Published in Business News

LOS ANGELES -- On an uncharacteristically crisp December night in Los Angeles, seasonal music mixed with a piney fragrance as mechanic Jose Rodriguez got a lesson in economics to explain why his Christmas tree was scrawnier and costlier than last year.

Tree seller George Lopez said the noble fir that Rodriguez was considering might not have even made it onto his lot last year. But Christmas trees are in short supply, Lopez said, so the grower harvested the less-than-ideal specimen rather than leave it for another season to fill out a few gaps.

"What am I going to do, not buy a tree?" said Rodriguez, who eventually counted out $125 for a fir that Lopez figured would have cost about $100 last year. "Once the decorations are on, it should be OK."

For the second year in a row, American consumers are paying more for their Christmas trees, and the selection might not be as lush.

"It's a tight supply and demand balance this year," said Doug Hundley, spokesman for the National Christmas Tree Association, which projects that trees across the country are costing 5 percent to 10 percent more than last year.

A tree grower for 35 years, Hundley these days handles media questions for the trade group and doesn't want anyone talking about shortages lest consumers get the wrong message and buy the plastic and metal variety instead.

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"We believe everyone who wants a natural Christmas tree will be able to find one," he said.

Hundley and other experts say the supply squeeze grew out of the Great Recession as well as agricultural shifts toward more lucrative crops and other land uses, which could contribute to higher prices in the future.

Growers in Oregon and North Carolina, which supply most the nation's Christmas trees, were betting on an increase in demand shortly before the recession hit in 2007. Sales tanked, causing a severe oversupply of trees. That resulted in sharply lower tree plantings, said Chal Landgren, a professor at Oregon State University Extension Service and a Christmas tree specialist.

"The recession certainly had something to do with it, but the bigger problem was that we also overplanted by about 2 or 3 million trees" before the downturn, Landgren said.

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