Christmas Trees Offer Seasonal Cheer for Investors

The traditional Christmas tree is proving that it has a lot more to offer than simply the joy of seeing it all decked out in lights and tinsel.

In a sector hit by low timber prices for the past several years, Christmas trees have provided an annual ray of light for investors and farmers.

Sales of Christmas trees in the UK are now in excess of 6 million per year. However production of Christmas trees is a highly specialized operation. While Christmas tree production does have a high profitability potential, it is also a long-term investment, not without risk, requiring occasional periods of intensive labour.

A feasibility study should always be undertaken prior to considering planting any species of tree for commercial purposes. Christmas trees are not usually harvested until they are five to eight years old and any return would not be seen until after the final harvest year.

Production considerations
Christmas trees can be produced on a wide variety of soils. While good agricultural land is ideal, some species can even be grown on marginal soils. A moist but welldrained, level site is best. It is important to match the tree species carefully with existing soil conditions.

Growers who plan to convert forested land should clear the land and establish a beneficial cover the year before planting.

Marketing considerations
Christmas trees can be marketed in a choose-and-cut operation, where the consumer selects the tree and then assumes the cost of harvest and transportation. This type of operation is successful when the plantation is located close to a major town.

Alternatively trees can be sold via supermarkets, which involves the grower abiding by stringent regulations on size and appearance, plus the obligation to meet deadlines for production.

Economic considerations
The British Christmas Tree Growers Association estimates that production costs for establishing one acre of manually planted Christmas trees (1,000 trees) and growing them over a seven year period, would range from £6,250 to £7,000. Assuming 330 trees are sold annually in years five, six and seven, at an average price of £15-£20 per tree, an acre of Christmas trees will generate between £4,950 and £6,600 in annual gross revenues. Returns over and above all costs should be in the range of £8,000 however most of this return will not be realised until the final year of production.

CKD Galbraith has one of the largest specialist forestry departments in Scotland, with a woodland management portfolio now in excess of 150,000 acres. Clients include estates, individuals, commercial companies and the public sector.

The website www.forestry-scotland.co.uk is a comprehensive source of information on Scottish woodland and forestry issues. For more information please call John Mackay, head of our Forestry department on 01463 224343, or email: john.mackay@ckdgalbraith.co.uk.

To read previous newsletters from CKD Galbraith please click here.

CKD Galbraith would like to wish all its customers and business partners a very Merry Christmas and a Happy New Year.

A New Force in Property

CKD Galbraith is a new property consultancy formed through the merger of CKD Finlayson Hughes and Cluttons (Scotland).

The consultancy specialises in serving the needs of private clients. With principal offices in Edinburgh, Glasgow, Perth, Inverness, Ayr and London, our partnership provides the full range of property consulting services across the commercial, residential and rural sectors throughout Scotland. The combined knowledge, expertise and experience of CKD Finlayson Hughes and Cluttons (Scotland) both firms – each enjoying long-established reputations for quality service – has created a national partnership with unrivalled local knowledge.

Services include:

For more information please visit www.ckdgalbraith.co.uk