Oh, Christmas tree: The economics of the US holiday tree industry

By Jay L. Zagorsky, Patrick Abouchalache, Boston University

Christmas today is a big business, and one part of that is the multibillion-dollar business of selling Christmas trees. The U.S. Christmas tree industry is so large, it even has two dueling trade groups: one that supports natural trees and the other, artificial.

We are two business school professors whose students asked us to explain the economic impact of the winter holidays. In the holiday spirit of sharing, we’re giving you some facts to discuss while trimming your tree.

Where to buy a natural Christmas tree – or chop one down yourself

There are three different ways to get a natural Christmas tree.

First, you can go into a national forest and chop down your own. Relatively few Americans do this, even though a permit costs $10 or less, because government rules require that the tree you chop must be more than 200 feet from any road, campground or recreation area. Since dragging a tree destroys its branches and needles, the 200-foot rule means that large, heavy trees have to be carried a fair distance through often snowy woods.

Your second option is to buy or chop down a tree at a local Christmas tree farm. Christmas tree farms got a big promotional boost when Taylor Swift revealed she grew up on one, but she’s hardly alone: There are nearly 3,000 Christmas tree farms across the U.S., according to the Department of Agriculture’s most recent figures. These farms sell around 12 million trees a year.

While being a Christmas tree farmer sounds idyllic, it isn’t very profitable, since Christmas trees take over a decade to grow large enough to sell. Long lead times combined with changing and unpredictable weather have pushed many of these farms out of business. Almost 500 U.S. Christmas tree farms shuttered between 2014 and 2019, the USDA found.

The third way to buy a tree is from a local retailer that imports trees. In 2022, the U.S. imported almost 3 million natural Christmas trees, primarily from Canada.

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