The incredible growth of the Christmas Tree

Let’s get on the sleigh to take a tour of this seasonal item that is so symbolic of the growth in a market economy and global trade. We can then make an informed decision between artificial or natural, local or international.

O Tannenbaum

Queen Victoria and Prince Albert, with their children, enjoyed the royal Christmas tree in December 1848. Wikimedia

According to legend, Martin Luther was walking in the forest on Christmas Eve and saw stars twinkling between the branches of a Fir tree. He took a sapling home decorated with candles and told his son it reminded him how Christ came down from heaven to dwell among mortals. Since then, trees that were used to dance in the medieval squares of Germany are been brought inside. The holiday evergreen became popular in other Protestant countries, including Britain, in the 19th Century, thanks to Prince Albert, Queen Victoria’s Saxon-born husband.

Ikea has the advantage of only selling one size Christmas tree. It is 2 meters tall (roughly six feet). You don’t have to worry about whether you want a cheaper, smaller tree or a larger, more expensive one.

The relationship between the price and size of a Christmas tree is based on complex equations. If I told you to use the Hotelling-Faustmann model, you would be hardly any wiser. I should explain. Harold Hotelling, an American economist and statistician who was well-known for his work in statistics, believed that natural resources should be priced at the same rate as interest rates. It is intuitive to assume that a resource owner has to choose whether they want to exploit it today or in the future. If the price of tomorrow is less than what they could earn by selling it now and putting that money in the banks, they will sell it immediately. The rate of interest will determine the price difference between a Nordmann Fir that is ten years old and one that is nine years old.

Martin Faustmann is a German Forester who can help. He said that trees could be replanted after they were cut down. This is not true for coal or petroleum. The saplings that would have been planted on the same piece of land if a farmer sold his firs at ten instead of nine years will lose a year’s growth. You can read the American Journal of Agricultural Economics or “A Hotelling and Faustmann explanation of the structure of Christmas tree prices” if this interests you. The US economists publish papers on a wide range of topics.

Oregon helicopters and Mexican trucks

The United States is the largest producer and consumer of Christmas trees. The Noble Mountain Tree Farm, for example, grows the Noble Fir ( Pseudotsuga Menziesii ), Douglas Fir ( Pseudotsuga sylvestris ), and Scots Pine ( Pinus Sylvestris on nearly 2,000 hectares. Once the trees are felled, the helicopters remove them, load them onto trucks or containers, and ship them to other parts of the United States and Central America. They can also be sent as far as Doha in Singapore, Ho Chi Minh City, and Doha in Singapore.

Helicopter hoisting first into transport trucks in Oregon. Noble Mountain Tree Farm

You are also less likely to be aware that Oregon-grown trees have been involved in a dispute over trade between the United States of America and Mexico. The conflict began with a lengthy argument over allowing Mexican trucks onto US highways. The North American Free Trade Association was supposed to grant them access to the US road network by 2000.

The federal government dragged

There is no connection between the Chinese factories that produce Christmas decorations and nursery rhymes. No elf with pointed ears or mischievous imps helping Santa Claus. Instead, automated machines and assembly-line workers are slicing PVC to create countless artificial pine needles. Yiwu, a city 300 km southwest of Shanghai, is where the manufacturing takes place. Nearly 1,000 companies make Christmas products. The country produces 60% of the world’s plastic Christmas trees, lights, and baubles.

You can watch the “I didn’t know that: How Christmas Trees are Made” to see how the fan belts, choppers, and other tools of this Nativity workshop are in action. It’s best to put your children to bed before you start.

Natural or artificial trees: pros and cons

The volume of fake trees sold in the United States is rising steadily and is close to the real thing. This trend is not due to its attractive price. If you use it for two years, you can start saving. In fact, a drop in demand benefits their natural competitor only marginally. Their success in the United States is more a function of convenience. No early December shopping, no needles left to vacuum up after the holidays.

In France, the share of artificial trees on the market is relatively stable, at around 20%. It’s a good thing for the local growers because Danish and other imports account for only 5% of the total volume. The French are very attached to their Christmas trees.

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