Bah humbug: Expect to shell out more for a Christmas tree this year

New York(CNN Business) In the spirit of holiday cheer, here's the good news first: Christmas tree farms say this year's harvest looks good and they don't expect shortages.

But here's the reality check. Expect to pay more for that perfect fir, pine or spruce compared to last year.

As with so many products lately, blame inflation.

Tree farms' operating costs — from labor and raw materials to shipping trees to retailers —have also risen over the last year.

Just how much more will this Christmas cheer cost in 2022?

The industry group Real Christmas Tree Board in August surveyed 55 wholesale growers of Christmas trees who account for about two-thirds of the nationwide supply.

They found 71% of those surveyed expect to raise the wholesale prices they charge retailers by 5% to 15% compared to last year, and some others cited increases as high as 20%.

At the store level, larger retail chains might be able to absorb some of the price increase, but they will likely need to pass some of those costs on to shoppers.

"We separately surveyed consumers in July about their expectations for tree prices this year. They told us that they do expect to pay more for trees because of overall inflation but that they're still going to buy their tree," said Marsha Gray, executive director of the Real Christmas Tree Board.

But while consumer price inflation is hovering above 8%, farmers' production costs are skyrocketing much higher as fees for labor, fuel, seed and fertilizer continue to rise.

"Agriculture inflation has far surpassed consumer inflation," said Bob Shaefer, CEO of Noble Mountain Tree Farm, a 4,000 acre wholesale farm in Salem, Oregon, that produces half a million trees a year.

Shaefer said Noble Mountain expects its wholesale prices to go up 8% this holiday season from a year ago. Oregon and North Carolina are the two largest US producers of Christmas trees.

"We want to be as reasonable as we can with our prices given these challenges," Shaefer said, but he acknowledged the crunch is happening across the agriculture industry.

For Noble Mountain, Schaefer anticipates the biggest cost increase will be tied to freight.

That tracks with the wider industry's outlook: The Real Christmas Tree Board's survey showed top concerns for growers this year are freight and shipping costs followed by supply chain slowdowns and the impact of inflation on consumer spending.

"Our trees are primarily transported on trucks. The trucking industry is facing a shortage," Gray said. "For our farms, they're all challenged about getting their products from point A to point B for the holiday season and how much more it's going to cost them."