Christmas Tree Farm Business Overview

A Christmas tree farm is an agricultural operation specializing in cultivating and selling evergreen trees for holiday celebrations. These farms transform vacant land into thriving ecosystems of carefully tended evergreen species, including Douglas Fir, Noble Fir, Fraser Fir, Balsam Fir, and other varieties. Unlike traditional farms with annual harvests, Christmas tree farms operate on a long-term growth cycle, requiring 7-10 years of cultivation before trees reach marketable height. This extended growing period means farmers must carefully plan their planting schedules to ensure consistent annual inventory while maintaining soil health and implementing proper irrigation systems.

The business landscape of Christmas tree farming encompasses various operational approaches, from small family-owned farms to large commercial enterprises. These businesses serve both local communities and broader regional markets through different distribution channels and sales methods.

Common business models in the Christmas tree industry include:

• Choose-and-Cut Farm: A traditional model where families visit the farm to select and harvest their own trees, creating memorable experiences and fostering customer loyalty through direct interaction.
• Pre-Cut Retail: Farms establish seasonal retail lots in high-traffic areas, offering freshly cut trees to urban and suburban customers who prefer convenience over the harvest experience.
• Wholesale Operation: Large-scale farms focus on supplying trees to retail chains, garden centers, and independent sellers, operating with higher volume but lower per-tree margins.
• Mixed-Model Farm: Combines multiple sales approaches to maximize market reach and revenue potential, typically balancing direct-to-consumer and wholesale operations.

Related: Checklist To Start a Business

How Do Christmas Tree Farms Make Money?

Christmas tree farms derive their primary income through seasonal tree sales during the November-December holiday period. The sales cycle is intensely concentrated, with most farms generating the majority of their annual revenue within a 4-6 week window. While the primary focus remains on selling mature trees, successful farms have developed multiple revenue streams to maximize their land usage and extend their earning potential throughout the year.

Christmas tree farms derive their primary income through seasonal tree sales during the November-December holiday period. The sales cycle is intensely concentrated, with most farms generating the majority of their annual revenue within a 4-6 week window. While the primary focus remains on selling mature trees, successful farms have developed multiple revenue streams to maximize their land usage and extend their earning potential throughout the year.

Beyond basic tree sales, these agricultural businesses can generate additional income through:

• Property rental for events and photography sessions
• Creation and sale of wreaths, garlands, and holiday centerpieces
• Tree delivery, professional installation, and post-holiday removal services
• Seasonal activities including hayrides and photos with Santa
• Holiday markets and winter festivals
• Sale of tree seedlings to other growers
• Landscaping materials and supplies

Industry Statistics

Christmas tree farming falls under NAICS code 111421: Nursery and Tree Production. This classification encompasses establishments primarily growing nursery stock, ornamental trees, and related products under cover or in open fields. Here are some notable statistics about this industry:

Christmas Tree Farm Industry Size & Growth: There are 25-30 million real Christmas trees sold annually. The tree farming market generated $1.38 billion in revenue, showing steady expansion in recent years. The market is projected to reach $1.71 billion by 2029, with an expected annual growth rate of 4.28%. This growth is primarily driven by increasing consumer preference for natural, sustainable holiday décor and growing environmental consciousness, particularly among millennial buyers. The average retail price per tree stands at $81, compared to artificial trees at $107, making natural trees an attractive option for budget-conscious consumers (Mordor Intelligence).

Number of Christmas Tree Farms: Over 15,000 farms actively grow Christmas trees across varying acreages from 2 to 9,000 acres. Large-scale operations dominate the market landscape, with approximately 434 farms controlling 75% of the total supply. The industry remains relatively fragmented, with numerous small and medium-sized farms serving local and regional markets. No single company holds a dominant market position, allowing for healthy competition and diverse market offerings (Mordor Intelligence).

Christmas Tree Farm Average Profit Margin: Tree farming operations typically maintain profit margins of around 25% of revenue, with variations based on operational scale, location, and business model. Farms offering direct-to-consumer sales generally achieve higher margins compared to wholesale operations.

States with Most Christmas Tree Farms

Michigan leads tree production with 42,000 acres dedicated to Christmas tree farming, followed by Pennsylvania with 31,000 acres, Wisconsin with 24,000 acres, and North Carolina with 12,000 acres. These states benefit from ideal growing conditions and established agricultural infrastructure (U.S. Census Bureau).

Costs To Start a Christmas Tree Farm

Starting a Christmas tree farm typically requires between $8,000 and $50,000, depending on the size of the operation and whether land needs to be purchased or leased. These numbers reflect the basic necessities for beginning a small to medium-sized tree farm operation.

There are several major expenses to consider when starting a tree farm. Here are some of the most significant items:

Land Acquisition or Lease: Property costs vary widely by location and size, but securing suitable farmland is often the largest expense. Land needs to have proper soil conditions, drainage, and accessibility. A viable operation typically requires a minimum of 5-10 acres, with costs ranging from $2,000 to $10,000 per acre.

Site Preparation: Getting the land ready for planting involves clearing existing vegetation, improving drainage if needed, and preparing the soil. This process often requires heavy equipment rental or contractor services, costing between $1,000 and $5,000 per acre.

Initial Tree Stock: Young seedlings must be purchased and planted. Depending on the varieties chosen and quantity ordered, costs typically range from $1 to $4 per seedling. An initial stock investment for a small farm starting with 1,000 trees would be $1,000 to $4,000.

Equipment and Tools: Basic farming equipment needed includes tractors, mowers, sprayers, and hand tools. Used equipment can help reduce initial costs, but budget between $5,000 and $15,000 for essential tools and machinery.

Irrigation System: Installing proper irrigation is vital for tree survival and growth. A basic system typically costs between $2,000 and $8,000, depending on the size of the operation and water source availability.

These estimates provide a general framework for planning purposes, but actual costs will vary based on location, scale of operation, and specific business needs.