2021 has most definitely been a year! Here are the cliff notes: in June, we ceased our efforts to build a choose and cut farm, I quit my corporate job in August, we struggled to get commitments for tree season till near mid-September, and we are seeing massive demand preseason for Christmas trees.
Here’s a quick update on our inventory, Currently we are sold out of trees 11-12 ft and above. We may have just a couple more once the trees arrive, but until the shipment gets here, we won’t know for sure. The next tallest trees 8 - 11ft are selling quickly! Over 50% of those trees are already sold for 2021. The 6 - 8 ft trees are doing well; thankfully, we were able to order more than we ever have and still have a healthy supply left.
I’m writing this while sipping my morning coffee and preparing for a requested interview with the Austin American-Statesman. I’ve been having a hard time centering my thoughts as the Christmas season frenzy seems to be escalating well ahead of the usual pace. The Statesman wants to talk about the supply chain and its effects on the Christmas tree world. The thing is, I believe it’s less about the supply chain and more about a cultural shift; things that have been going on well before the pandemic and supply crisis started.
Don’t get me wrong, prices of everything are up drastically. We have been in business since 2014 and since then, we have seen an 81% increase in the prices on wholesale trees. Two-thirds of that increase have come in the last 2 years alone. When we started in this business, there were more trees available than people looking to buy. I could order trees 2 weeks prior to opening, put down a 25% deposit, and get my entire order filled and shipped. My biggest fear was having trees left at the end of the season. Fast forward 8 years and things have changed drastically. I have seen many people posting in the groups and forums of the Christmas tree world that their quantities have been cut from their order or they have been dropped from their supply farm completely. At this point in the game, these businesses won’t be able to easily recover from impacts like this. For many, they will be forced to close their businesses; others will live to fight again next year. Brungot Farms experienced this in 2020, when one of the farms that we’d worked with for years unexpectedly dropped us right as our presale was getting started. To save our business, we had to work FAST which included jumping on a plane and flying to North Carolina on 12 hours notice.
Today, you have to have a strong relationship with your tree farms and be able to pay for everything upfront. Many farms have dropped smaller buyers that normally only get partial truckloads. If you’re not buying by the truckload (usually around 500-600 trees), it's hard to find someone to get trees from. Honestly, I've learned that the Christmas tree game can be somewhat cutthroat. Miss an email or a payment deadline and there is a long list of people waiting for your trees. Many smaller family-owned farms have gone out of business or have been purchased by larger farms. Many of the larger farms are primarily focused on supporting big box retailers, not small business and farm owners. Growers are retiring and often the next generation doesn’t have the ability or the want to continue the efforts, so their only choice is to sell or close if they want to keep their land.
The Christmas tree shortage isn’t just about available trees, it's about having the right size trees, at the right times, in the right markets, with the right customer-facing businesses. For example, when planning out their seasons, farms have to strategically plan what to cut and what to let keep growing for the next seasons. Related to the financial pressures that began with the 2008 recession, many farms oversold 6 - 8 ft trees for a much needed revenue boost in the last couple of years. This means that there were far less trees allowed to keep growing to 8+ feet. With the dwindling supply, the prices of trees 8 feet and above have significantly increased. Add to this the increases in labor, fuel, and farm supplies, and we have a 30-35% cost increase on our big trees. Trucking is also up 30% from last year–bigger trees take up more room on the trucks so the more big trees that you bring in, the more trucks you have to reserve. Tree stands are up 15%; to match the labor market pressures, wages have increased 25%; some of our previous employees aren’t able to come back or have had to decrease their availability due to other commitments; I could literally go on and on! (Hint, hint: if you’re interested in some seasonal work, message us! 😉)
Every year, our pre-order helps us get a read on the season and it also lets people know they have a tree, when they are traveling for the holidays and can’t come to the lot right away. Compared to 2019, the pre-order demand is up by nearly 4x. We doubled in 2020 and are now already double of last year's number.
We have seen huge increases in deliveries as well. We are already at 5x our pre-pandemic numbers (year 2019). Even prior to the pandemic there was already a strong demand for delivering Christmas trees to your door. In fact, the farm that dropped us in 2020 went down that road, essentially cutting out the middleman and charging retail prices. We’ve also seen large retail businesses like Home Depot and Lowes develop delivery programs rapidly.
These pressures are not just at the tree lots and retailers, there are tree farms in Texas as well that offer the varieties of trees that can be grown here, as well as the same supply of pre-cut trees from out of state that we use. Every year we see more of the Texas farms close as well, for the same reasons: age/retirement, financial pressures, and seedling supply. Farms have to be years ahead in their planting. Texas farms need 5-6 years of growing on average before they can expect to start selling. Drought, freeze, and the availability of seedlings all decrease the supply of local “Choose and Cut” farms. We were actually working to build a choose and cut farm, but largely due to the reasons mentioned above, this year we decided to refocus our time, energy, and money on growing our business at the Twin Lakes YMCA for the foreseeable future.