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What Rural Lifestylers Want From You!

The mature, $1.3 billion-a-year Christmas tree industry can present
an opportunity for equipment dealers willing to understand the
segment’s unique needs.

Meet the Rural Lifestylers: John and Ginger Ahl John & Ginger Ahl Occupation: Co-owners, Northern Christmas Trees & Nursery Property: 6,600 acres of Christmas trees and nurseries spanning 5 counties in Merrillan, Wis. Twenty different buildings, including a shipping yard and main office Products: Douglas, Fraser and Balsam Firs, White and Scotch Pines 2008 Sales: $3 million, including trees, wreaths, roping and other accessories Employees: 30 full-time year-round, 50 Seasonal Equipment: Versatile 555 tractor, Bush Hog rotary mower, Ford Versatile 9480 tractor (350 HP, 4WD), Case IH folding discs, 5-shank ripper, 40-ft. HMI harrow, John Deere 6-row planter, 3 Kubota B7400 tractors, several 42-in., 3-pt. Woods mowers, Hagie 254X11 high-clearance sprayer, 6 Evergreen Christmas tree balers, 4 double-barreled shakers, 14 Stihl chain saws, Gallion road grader, Caterpillar D8 and John Deere 450 crawler tractors, Deere 4440, 7920, 4020, 4230 and 4430 tractors, Case IH 7140 tractor. Also: 20 pickup trucks, 4 semi trucks, 6 buses, several field elevators and box trailers.

John Dobberstein, Associate Editor

John and Ginger Ahl share a passion for Christmas trees. In fact, the rear license plate on their SUV says “BUYATREE.”

But it’s not just a hobby for the couple of 32 years. Northern Christmas Trees & Nursery in northwestern Wisconsin is a sprawling wholesale business that’s run with every labor-saving device they can find.

While they enjoy their life in the country, the Ahls are business people, too. With about 3 million Christmas trees to care for, they need equipment dealers who can refresh their expansive lineup of tractors, sprayers, mowers, planters, grading equipment and chain saws.

They also need parts in stock and timely repair services so their equipment is running as the Christmas trees are cut down and sent to their shipping yards. “There is no tomorrow,” John Ahl says.

“You need production to go as smoothly as possible. You don’t want to harvest too early, and you can’t get into the market too late, either.”

Christmas tree farms, which number close to 20,000 in North America, present an opportunity for equipment dealerships, especially if they do business where large pockets of producers are found, such as the Pacific Northwest, Upper Midwest, Northeast or the Canadian provinces of Quebec, Nova Scotia, British Columbia and Ontario.

John Ahl, who’s spent nearly 30 years in the industry, still predicts a solid, stable future for Christmas tree farms.

John Ahl needs a wide variety of equipment, along with prompt parts and service help, to care for Northern’s 2,700 acres of Christmas trees. “If there’s anything that kills us, it’s dealers who don’t stock parts,” he says. “It will influence where we buy probably more than anything else.”

“I know there will always be a market,” says Ahl, who just finished stints serving as director of the National Christmas Tree Assn. in Chesterfield, Mo., and the Wisconsin Christmas Tree Producers Assn. “Will the market be the same size as it is today? I like to think so, because I’m planting the same amount as I did 10 years ago. I believe the market will remain where it’s at.”

Growers Thrive on Volume

Most Christmas tree farms in the U.S. are small, choose-and-cut operations where families come to pick a tree that becomes the centerpiece of their annual yuletide celebrations.

Choose-and-cut farms (where 21% of the Christmas tree sales occur) are popping up across the U.S., especially near urban areas where there are more buyers and the farms can charge higher prices. For many, the farms are a hobby picked up by retirees or family members who’ve inherited land and want to make some money or enjoy the outdoors.

Large, wholesale Christmas tree farms like Northern, however, take the profession to another level. The farms span thousands of acres, have a high degree of mechanization and cater to retail lots or big-box stores like Menard’s, Home Depot and Lowe’s that don’t want to work with dozens of different suppliers. Large chain stores represent the largest percentage of retail sales at 23%.

Based in Merrillan, Wis., Northern Christmas Trees & Nursery spans 6,600 acres across 5 counties. Northern has 2,700 acres of Christmas trees and is currently the largest Christmas tree farm in Wisconsin — and one of the top 15 wholesalers in the U.S. More than 150,000 of Northern’s trees are delivered annually to 34 states, as well as Canada and Central America.

The Ahls have a shipping yard in Merrillan and also run a wholesale distribution yard in Kansas City, Mo.

DEALER TAKEAWAYS • With 20,000 Christmas tree farms in North America, there's a sizeable market for tractors, sprayers, mowers, graders and chain saws. • Equipment is purchased at producer association trade shows. • Understanding the unique equipment needs gains you access to large operations and small hobby ones alike.

A major factor in a Christmas tree farm’s viability is what types of trees are grown, since some varieties are worth more in the retail market, or in higher demand in a certain region of North America. About 35% of Northern’s farm is Fraser Firs, 25% is Balsam Firs, and the remaining acres are covered with White and Scotch Pines. Growing firs for retail sales in the southern U.S. has become a big business for Northern, which is also one of the few farms in Wisconsin that still grows Scotch Pines. Ahl also grows Fraser Firs for customers in Canada, where the weather is too cold for the species.

Volume helps keep costs down at Northern, as does the farm’s high level of automation. Hydraulic, double-barrel shakers, Christmas tree balers and field elevators help workers process about 6,000 trees per day during harvest in the late fall. “It’s just something that built up over time. We’ve always been competitive and we still remain competitive,” Ahl says.

Tillage Plays a Role

Decades ago, Christmas tree operations were relegated to farmland that was too steep, infertile, dry or eroded for other agricultural use. But the emphasis shifted toward growing high-quality trees, which ushered in the need for mowing, fertilization, chemical weed control and spraying for insects and diseases.

Tillage has played an increasing role in improving soil conditions for the Christmas trees, whose price is often determined by size and quality. It’s especially important for farms with finer-textured soils with high clay content, experts say.

Tools like stump grinders, mowers, cultivators, discs and harrows are used to clear a harvested field of tree roots and vegetation, provide loosened soil that promotes seedling root growth and control weeds around the bases of the trees.

At Northern, a freshly harvested field is ground down by a large rotary mower, then tilled and planted with corn or soybeans for a year to break up the weed cycle and thwart pocket gophers — a major threat to young trees. More than 1,000 acres of corn or soybeans is planted every year on Northern’s farms for that purpose.

Crews use a Versatile 555 tractor and Bush Hog rotary mower to grind up the wood and debris in the harvested tree fields. “That’s a big, heavy-duty job, and we’d hate to send something else in there,” Ahl says. Most of the heavy-duty tillage in the fields is done with a 350-horsepower, four-wheel-drive Ford Versatile 9480 tractor that accumulates about 100 operating hours per year. Ahl uses Case IH folding discs, a 5-shank ripper and a 40-foot HMI harrow for tillage.

When the fields are ready, most of the seeding for the rotated crops is done by a custom planter. But Northern uses a John Deere 6-row planter for some of the rougher fields with leftover residue. “You can’t ask a guy with an $80,000 planter to do that,” Ahl says.

Once planted, Christmas trees at Northern are fertilized every 1-3 years, depending on their needs. Herbicides are applied in the spring, and spraying for insects and fungi is done 2-3 times a year. After 3 years, the trees can be sheared into the proper shape.

Another yearly chore for Northern is dealing with weeds and grass that grow between the trees. Ahl uses 3 Kubota B7400 tractors and 42-inch, 3-point Woods mowers for clearing those areas. He sometimes puts homemade sprayers on the back of the Kubotas to dispense herbicides between the trees, or uses the tractors to pull the tree shakers.

Time for Harvest

In early August, crews at Northern start tagging trees that will be cut so the owners know what the potential inventory will be.

A major step after that is coloring all the targeted trees with green paint so they’re attractive for customers. Northern uses a Hagie 254X11 selfpropelled sprayer for that, as well as for spraying herbicides. The machine works about 400 hours a year. “We can go from field to field and cover 8-foottall trees, or we can lower the boom and go across 1-foot-tall trees also,” Ahl says. “It has a nice, wide span and we can handle a full block of trees with it.”

After the trees are tinted, they’re cut with chain saws and moved to the road. For the cutting chores, Ahl’s farm carries 14 Stihl chain saws that are rotated in and out of duty so they get proper maintenance.

Chain saws only last about 3 years at Ahl’s farm because they’re run hot and used close to the ground, where they pick up and accumulate sand and pine needles. “It’s not the ideal conditions for running a saw. It’s rough,” he says. “We need quality equipment that we can count on.”

Once the trees are felled, crews put them in shakers to remove old needles and debris, and then run the trees through balers and pile them beside the road.

Field elevators are used to load the trees into tandem axle, 24-foot box trailers. From there, the trees are hauled to Northern’s shipping yard, where they’re sorted by species and size and made ready for semi-truck drivers arriving with orders in hand. When the shipping season hits in mid- November, 15-20 loads of trees a day leave the yard on semi trucks.

Helicopters, which the farm doesn’t own, are another valuable tool on the tree farm. They’re used to spray herbicides or lift trees onto the trucks when the roads are too muddy for vehicles. Helicopters are used to do about 80% of the tree spraying.

“It’s truly mass production when you get down to it. It just gets better as you look at the process and figure out how to squeeze more efficiency out of it,” Ahl says.

To maintain the roads on his farms or clean up fields in muddy conditions, Ahl has a Gallion road grader and Caterpillar D8 and John Deere 450 crawler tractors that collectively get about 300 hours of work a year. Road maintenance is crucial to keep pathways clear for cars and trucks entering the farm during the winter.

Northern has a variety of other tractors used for towing and other miscellaneous farm work, including Deere 4440, 4020, 4230, 4430 (two) and 7920 models and a Case IH 7140. Ahl says the tractors accumulate 100 to 350 hours a year

Ahl also needs plenty of vehicles to get business done. While he doesn’t use ATVs or UTVs, he has about 20 pickup trucks of various makes, ages and sizes for sales work, hauling tree balers and doing other odd jobs.

That includes 8 small Isuzu pickups used to facilitate orders in the shipping yard. “They just run and run and run, and they sip fuel,” John says. The farm also has 6 older buses to transport work crews from field to field, and 4 semi trucks to haul loads of trees.

Build Some Trust

Northern has its own full-time mechanic, and more mechanics are brought in during harvest when equipment outages can’t be tolerated. Ahl estimates the tree farm does 85% of its own maintenance work.

But equipment dealerships still have a role to play in keeping a Christmas tree farm like Northern operating. Some large tasks at Northern, like rebuilding engines or repairing hydraulic pumps, are sent to area dealerships. And the farm must also have a reliable source of parts and new equipment.

The Ahls estimate they spend $170,000 a year on parts and service, but their budget for new equipment varies widely from year to year.

Ahl buys his chain saws at Woods Sales & Service in Black River Falls, Wis., a 41-year-old dealership spanning 20,000 square feet that was once the largest Stihl dealership in the world. Northern mostly does it own chain saw maintenance, but it puts in a big yearly order with Woods for clutches, chains, bars and other parts “so we don’t have to fool with it in-season,” Ahl says.

Most of the tractor work is done once or twice a year at Kohel Power Equipment, a John Deere dealer in Chippewa Falls, Wis., that also sells Woods mowers. The diesel engine work goes to Catco Parts & Service in Eau Claire, Wis. The Ahls have used the same stores for years and have stayed with the same retailers because the pricing has been good and parts are usually on hand.

But a dealership that doesn’t keep parts on hand would cause the Ahls to re-evaluate where they spend their money. Having parts is crucial, Ahl says, because of the freshness factor involved with Christmas trees after they’ve been cut and processed.

“If there’s anything that kills us, it’s dealers who don’t stock parts. It will influence where we buy probably more than anything else.”

Ahl likes to do business with a dealer that can get parts to him in 24-36 hours, “and not make us feel like we’re asking for the biggest favor in the world.” His equipment dealers will run parts out to the farm if time is scarce. “It’s just a small thing,” he says, “but it shows that they’re interested and trying to speed things up as much as possible.”

Some other issues annoy Ahl, too — like trust issues between equipment dealers and long-standing customers. Ahl can’t get a credit account with some of his dealers, even when he does regular business with them and pays his bills on time.

Credit would make life easier for his business, and it keeps employees from having to carry around cash and checks when they pick up parts.

“The lack of trust makes me not look at them as favorably,” Ahl says. “You would rather deal with your friends than someone who doesn’t trust you. That’s number one.”

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Trade Shows Key to This Market

The Christmas tree industry has its ups and downs, like any other agricultural sector. The number of farms and trees harvested in the U.S. has fallen in the past 5 years, according to the USDA’s Census of Agriculture for 2007.

Some experts blame an aging base of growers, diseases that delayed harvests in eastern states, or a glut of trees planted in the Pacific Northwest that is being corrected. USDA figures don’t show how many acres were planted during the period.

Regardless of market conditions, the Christmas tree industry has a loyal base of producers, and there’s a strong demand in the U.S. and Canada for authentic Christmas trees.

Farms can be started with as little as 10 acres, but more land is needed if a producer wants the farm to provide income. Many producers are part-time and work regular jobs while taking care of their tree farms on the weekends.

Experts warn that Christmas tree farms are a long-term investment, not a “get-rich-scheme.” It takes at least 8 years before trees can be cut, and it’s probably closer to 12-13 years, says John Ahl, co-owner of Northern Christmas Trees & Nursery in Merrillan, Wis. “You’ve got to pick your markets and make predictions 10-12 years in advance, which is difficult to do.”

The main competition for producers is artificial Christmas trees, which have gained popularity for their convenience and longevity. About 17 million U.S. households purchase artificial trees each year, compared to 31 million households that buy real trees.

Real Christmas trees sold in the U.S. in ’07 had a retail value of $1.3 billion, compared to $1.2 billion for artificial trees.

Ahl’s advice to equipment dealerships interested in working with Christmas tree farms is to contact producer associations in their states to find out when their trade shows are held. Christmas tree producers are a unique crowd, he says, because they make most of their equipment purchases at trade shows from vendors who understand their unique needs.

“If dealers don’t attend trade shows, it’s more difficult, because there aren’t many dealerships out there who can tell you ‘Here’s what you need,’ ” Ahl says. “The dealers who are really interested become knowledgeable and come to the shows.”

Rick Dungey, public relations manager for the National Christmas Tree Assn., says major suppliers like Kubota, New Holland and John Deere have come to the association’s national trade show in the past, and sprayer manufacturers like Jacto and Superb Horticulture/AgTec were among the ag-related suppliers scheduled to exhibit in 2009.

A curious equipment dealer who isn’t afraid to take a risk might be rewarded with some new, loyal customers by attending one of the shows, Dungey says. “Most farms are getting 1,000-1,100 trees an acre. Even with a 10-acre operation, that’s more than 10,000 trees on the ground. That’s a lot of plants to take care of.”

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