BUSINESS

Christmas Tree Exporters Prepare For A Surge In Demand

12/19/2014 11:21 EST | Updated 02/18/2015 05:59 EST
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TORONTO - The lower loonie will put more money in the pockets of Canadian Christmas tree exporters this year, just as the industry is preparing to ramp up production to meet an anticipated surge in demand from south of the border.

The U.S. is the largest market for Canadian Christmas tree exporters, with more than 1.5 million trees shipped across the border last year, according to Statistics Canada. With the loonie hovering below 90 cents U.S., Canadian tree growers — who sell their trees in U.S. dollars — are expecting to see their revenues climb higher.

The Christmas Tree Council of Nova Scotia says its exporters will earn 10 to 15 per cent more per tree this year, according to the organization's industry coordinator, Colette Wyllie. For balsam firs, which grow abundantly in Nova Scotia, that could mean an extra $2-3 per tree.

"The wholesale price for trees has not changed in a long time, so to be able to increase revenues because of the strong U.S. dollar is really a great thing," Wyllie said.

Shirley Brennan, the executive director of Christmas Tree Farmers of Ontario, is hoping for a six per cent boost in revenue for growers in the province.

"It looks like it's going to be a good year," Brennan said.

In addition to the favourable exchange rate for Canadian exporters who price their goods in U.S. dollars, Canadian tree growers also stand to benefit from the strengthening U.S. economy.

Ross Prusakowski, an economist at Export Development Canada, said exports of Canadian-grown Christmas trees dipped during the U.S. recession in 2008 and 2009, but have been climbing steadily higher ever since.

"Broadly speaking, as the U.S. economy recovers, you're likely to see a stronger demand for imports, and that includes things like Christmas trees," he said.

Meanwhile, the industry predicts that population growth in the U.S. will create demand for 10 million additional trees over the next three to five years, Wyllie said.

U.S. tree farmers, who have been cutting down on their annual planting over the past decade due to lower sales, are in poor shape to meet that demand, Wyllie said. That's because it takes eight to 10 years from planting to grow a Christmas tree.

"We could potentially do it quicker, and so we're hoping we'll be able to meet that demand when it happens."

Balsam firs grow naturally in Atlantic Canada, which cuts down on the length of time to produce a saleable tree, Wyllie said.

Canadian Christmas tree exporters are also hoping to break into the European market, but pest restrictions prevent them from doing so.

"There is a potential market there for our Atlantic trees, because they're such an environmentally friendly product," said Wyllie. "They're naturally grown, and that's very trendy in Europe — even more so than in North America."

There are fears that Canadian trees may be infected with a tree-killing paraside called the pine wilt nematode, which is carried by a bug called the pine sawyer beetle. Canadian researchers are currently conducting studies to determine whether that's really the case. If they can prove that the trees are safe, exporters may have a massive new market to tap.

"It would mean a huge change for our growers here in Nova Scotia if that market opened up and added to our demand," Wyllie said. "It could really change things quite a bit."

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