Christmas tree growers in Canada out on a limb

Canada’s largest Christmas tree grower is going out of business.

PORTLAND, Maine (AP) — The drooping value of the U.S. dollar means Canadian Christmas tree growers are seeing less green this season.

Canadian Christmas tree growers have seen their U.S. sales decline in recent years because of increasing costs and competition from U.S. growers. But it’s their own currency that’s causing them the most grief these days.

Compared with the U.S. greenback, the Canadian dollar is 15 percent higher in value than it was at the beginning of the year. Because growers are paid in U.S. dollars, their revenues are dropping by the same amount.

Canadian exporters of products ranging from seafood, lumber and auto parts to Canadian Club whiskey are all in the same boat. But Christmas trees are an especially visible example at this time of year.

The situation is blamed for driving Canada’s largest Christmas tree grower, Nova Scotia’s Kirk Forest Products, out of business.

“That put the dagger to the heart,” said the company’s founder, Rick Kirk, who is shipping about 250,000 trees, most of them to the U.S., in his company’s final holiday season.

More than half of Canada’s Christmas trees are shipped to the U.S., but the figure has dropped by about 20 percent, to about 2 million trees, since 2002. During that period, the value of the Canadian dollar grew by about 50 percent.

The effect on U.S. consumers is minimal because Canadian trees account for less than 10 percent of the total number of trees sold.

This season, the average purchase price for a live Christmas tree in the U.S. is expected to be similar to last year’s average of $40.50, said Rick Dungey of the National Christmas Tree Association in Chesterfield, Mo.

While the exchange rate is bad for Canadian exporters, it’s a boon for U.S. retailers because Canadians are flocking across the border this month to shop.

All probably thought they had seen the peak last summer when the Canadian dollar — called the loonie — reached a 28-year high against the greenback.

The Canadian dollar surged to an all-time high of $1.10 against the greenback in November, a gain of 28 percent from Jan. 1, before falling back a bit.

In dollars and cents, a Canadian grower who receives $20 U.S. for a tree would have pocketed $23.30 Canadian last December. This month, the same $20 U.S. per tree translates to about $20.20 Canadian, a drop of about $3.

“It erases our profits, or very close,” said Larry Downey of Cookshire-Eaton, Quebec, president of the Canadian Christmas Tree Association.