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RALEIGH, N.C.—Christmas tree geneticist John Frampton rubs the sprigs of a two-inch seedling, planted two years ago from the seed of a fir cone from the Uludag Mountain region in western Turkey. (click below to read more)
This Uludag seedling tube is one of thousands in a greenhouse at North Carolina State University, where Mr. Frampton tests DNA and blends characteristics of trees from around the world in search of the perfect Christmas tree. He wants to know if this hardy family of Turkish fir will hold on to its needles when cut, sold and decorated, perhaps offering an alternative to the state's ubiquitous Fraser fir in disease-prone areas. "We're trying to find a tree that grows faster, is better quality and has pest resistance," he said.
Mr. Frampton's work matters greatly to Christmas tree growers nationwide as sales of live trees decline. While about 40% of U.S. households, or about 37 million of 94 million homes, bought live Christmas trees in 1991, that percentage declined to 23%, or 27 million of 118 million homes, last year, according to the National Christmas Tree Association, a trade group.
The reason is partly demographic. Many baby boomers stop buying live trees as they get older. Many people in their 30s and 40s never developed the habit, having grown up in split households or sometimes with artificial trees.
"I don't want to be all doom and gloom because nobody wants to hear that," said Rick Dungey, spokesman for the National Christmas Tree Association. "But we as an industry have some big challenges."
And when consumers do buy real trees in today's tough economy, they're opting for shorter, less expensive ones—often four feet or smaller—which are less profitable for growers. A persistent oversupply of trees has also held prices down in the past several years, as the current crop was optimistically planted during the economically robust times of the early 2000s. It takes about eight years to grow a Christmas tree.
At the same time, sales of artificial trees made in China of plastic and metal have skyrocketed, thanks to quality improvements and other demographic shifts, as many city dwellers opt against the hassle of hauling, maintaining and recycling a live tree.
Consumers will spend about $1.01 billion on artificial trees this year, compared to $984 million on real trees, according to a recent Nielsen survey conducted for the American Christmas Tree Association, which represents artificial-tree retailers.
Academics like Mr. Frampton find themselves scrambling for research dollars for a decorative product. "If you don't eat it, they aren't interested in it," said David Shetlar, an entomologist at Ohio State University with expertise in Christmas trees. "Let's face it. You cut the dang things down, and you use them and you throw them away."
To combat the tough headwinds, growers are putting more of their own money into Christmas tree marketing and research, often on their own farms. Farmers in mountainous Ashe County, N.C., have been taking classes on how to graft picturesque Fraser fir tops on homely Japanese Momi root balls, which happen to be resistant to rot and pests.
Long-time farmer Kent Poe of Jefferson, N.C., has patented "Frosty," the offspring of an unusual bluish-white-needled Fraser he happened upon years ago. He is grafting the pretty scions on top of unattractive but hardy established trees.
In Oregon, farmers like Betty Malone are volunteering hundreds of trees for academic genetic tests. Ms. Malone's Sunrise Tree Farm also offers choose-and-cut trees, which now generate a quarter of total tree sales. Growers say they see opportunity in selling an outing in addition to a tree, so they offer wagon rides, hot chocolate and wreaths.
Christmas tree growers are a diffuse bunch, ranging from Pacific Northwest magnates who harvest trees with helicopters, to mom-and-pop shops in the Carolinas that have choose-and-cut operations on their family farms. But the growers surveyed by the National Christmas Tree Association said that they were willing to pay a 15-cent tax per tree for a coordinated marketing-and-research program, similar to "Got milk?" for the dairy industry. "For so long we felt like we could just coast because, really, what could be better than a Christmas tree?" said Ms. Malone, who helped lead the assessment effort. "But in fact, if you don't have the money to tell your story, nobody hears it."
The growers petitioned the U.S. Department of Agriculture for permission to collect the per-tree tax for a marketing-and-research program. The program was to be overseen by the USDA but administered by a board of growers, like 20 similar programs for products including cotton ("the fabric of our lives") and pork ("the other white meat").
The program was scheduled for implementation last month, but the Obama administration postponed it after critics lampooned the president as a Grinch for taxing Christmas trees. In a blog post, Republican Sen. Jim DeMint of South Carolina called the plan the "single stupidest tax of all time."
Now, the tax is on hold indefinitely, a spokesman for the USDA said.
Andy Cheek, owner of 80-acre Cheek's Nursery and Tree Farms in West Jefferson, N.C., said he didn't support the tax because he worried about potential misuse of the proceeds. Mr. Cheek said the lean times will weed out poor-quality producers and force farmers to think creatively. "Baby boomers still buy a garland and a wreath," he said.
The American Christmas Tree Association, the artificial-tree retailers' group, said it welcomes a stronger marketing effort from live Christmas tree farmers. "We truly feel that any discussion about Christmas trees supports the whole industry," executive director Jami Warner said.
Growers like Mr. Cheek say there is also reason to be optimistic about sales this year, since there has been some good weather on key tree-buying weekends this month and an apparent fondness among 20-somethings to buy real trees, even if they are table-top size.
In Mr. Frampton's lab, technicians spent several hours this past week rubbing the branches and weighing needle loss from hundreds of Fraser fir samples, to weed out non-needle-holding family lines.
Mr. Frampton sees faster-growing, prettier Christmas trees as critical to the state's agricultural economy, which is reeling from the decline of tobacco and from rapid suburban growth. North Carolina's agriculture commissioner says the state has lost 600,000 farming acres and 6,000 farms since 2002, making it the nation's leader in farm loss.
"There's been lots of genetic improvement on food crops for post-harvest handling and that's essentially what we're doing for Christmas trees," Mr. Frampton said. "It's just like any other crop."
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