SPF-1

Holiday Greenery

Natural Resource Income Opportunities Series

Special Forest Product Enterprises: A Decorative Product Example

INTRODUCTION

For generations, many forest landowners have supplemented their income by gathering or cultivating special forest products (SFP) or non‑timber forest products (NTFP) from forestlands. These products offer numerous new opportunities for increased income generation for forest landowners. However, without adequate planning these enterprises may have risks and may foster economic growth without assurances that forest resources are managed in a sustainable fashion.

Before exploring new business opportunities, there is an urgent need to examine the markets for these products and to integrate these products into forest stewardship plans. Native Americans traditionally used plants and plant products for food and medicine, and shared this knowledge with early settlers. These traditional forest products had become an integral part of rural economies. But for the most part, this knowledge has been ignored or forgotten.

In the 1990s, there has been a dramatic increase in demand for natural products. Processing and marketing often requires low capital investment, but can employ or give partial support to many at the local level.

MAJOR CATEGORIES OF SPECIAL FOREST PRODUCTS (SFP’s)

Special forest products (also known as non-timber forest products) are found in nature, but many times they are cultivated in the forest environment. They are not a traditional timber product measured in board feet and sold through commercial timber buyers. Collected or cultivated in forests, these products are usually harvested on a small‑scale. These products fall within five general categories: 1) edibles; 2) medicinal and dietary supplements; 3) decorative or floral products; 4) specialty wood products; and 5) native wild plants. Visit the special website on special forest products for more information on producing and marketing these types of products at: www.sfp.forprod.vt.edu/special_fp.htm .

A. Edible products

Mushrooms, perhaps the most well known edible NTFP, are included in this general category along with many edible or food products gathered from or cultivated in the forest. These products include shiitake, oyster, morel and other mushrooms, ferns, berries or other fruits, nuts, ramps (wild onions), herbs, and spices.

B. Medicinal and herbal products

These include plant-based products that are processed into medicines for the U.S. market and, perhaps more importantly, for the international markets. In the late-eighteenth century, over 130 plant species native to the United States were admitted to the U.S. Pharmacopoeia and/or the National Formulary. Most of these products are harvested in the wild in rugged or mountainous areas, and are widely traded as botanicals - many to international markets (Foster 1995). Many important products are manufactured from ginseng, sassafras, goldenseal, mayapple, slippery elm, black cohosh, white oak bark, and scores of other species.

C. Decorative products

Items collected for decorative products include pine boughs, grapevines, moss, ferns, flowers, cones, mistletoe, holly, galax leaves, and other plant products. These unique forest products may appear in floral arrangements, dried flower decorations and ornaments, or packaging.

D. Specialty wood products

Specialty wood products include handicrafts, carvings and turnings, musical instruments, as well as utensils and containers. In general, specialty wood products are considered non-traditional if they are produced directly from trees, and not from lumber or timber purchased from mills or retail establishments. Often little is known about the impact these products have on forest resources because woodcrafters may purchase logs or collect trees directly from the forest and then process the material themselves. Products common in the Appalachian region include handicrafts, carvings, turnings, utensils, and containers (baskets), and special furniture pieces. Raw materials may include cypress knees, willow branches (for weaving), yellow poplar bark, or forked dogwood pieces. Most importantly, the raw materials for SFP’s can obtained and utilized from the waste products of manufacturing or forestry operations for minimal cost.

E. Native Wild Plants

This is the propagation of forest and wetland plants for habitat restoration and “wild” gardening. In the coastal plain region, “no-net-loss” policies of forested wetland habitats have given birth to suppliers of propagated forest plants for mitigation projects. In addition, a growing interest in restoring native flora and wild gardening has created demand for sources of native forest plants. Consequently, some forest landowners have begun to cultivate and sell native forest plants for both the hobby and mitigation service markets.

How might forest landowners assess their existing resources for forest-based economic development? This publication focuses on one decorative product – white pine holiday greenery.

Holiday Greenery:

A Potential Decorative Product Enterprise

A. Introduction

Materials gathered from the American forest have been used for holiday decorations and floral arrangements for hundreds of years. However, early in the 1900’s, ivy and evergreen tips gained increasing attention for their use in Christmas wreaths, roping, swags, and sprays. The number of forest trees, shrubs and vines utilized for wreaths and greenery roping is extensive and includes materials such as white pine, Fraser fir, Norway and blue spruce, mountain laurel, boxwood, ivy, grapevine, juniper, Douglas-fir, incense cedar, noble fir, holly, and eucalyptus. Other non-green materials are also used including manzanita, red ozier dogwood and birch branches. These materials are often used in combination with the wide variety of dried forest plants, nuts, cones, and mosses. Often, one material will be predominant in each region. For example, white pine is a predominant source of material used in the southern Appalachian wreath and roping industry (known as finished greenery). However, Frazer fir and boxwood are becoming an increasingly important component of finished greenery. Other forest products including loblolly pine tips and magnolia leaves have the potential to become important sources for finished greenery in the future.

The most common holiday greenery products are Christmas wreaths and roping. Wreaths range in size (i.e., diameter) from 12 to 48 inches, with 12 to 18 inch wreaths being most common. Greenery roping is generally produced in rolls of 8 to 75 feet. Other finished greenery products include door swags, sways, garlands, center pieces, kissing balls, and boxwood trees. Because greenery products are well known and relatively easy for landowners to produce in their own home, we have selected white pine wreaths as an example of a decorative special forest product.

Today’s industry

In many regions of the U.S., holiday greenery production is a multi-million dollar industry. For example, in the five-county Grayson Highlands region of Virginia and North Carolina, each season nearly 50 producers employ 2,000 people, with estimated revenues of 20 million dollars annually. It is estimated that the greenery industry in this region grows by 15 percent per year and is centered on white pine wreath and roping production. In this region, most raw materials are tipped from trees grown for Christmas trees and timber. The greenery industry is also an important “cottage” industry in the northern Shenandoah Valley and central Maryland, where wreaths and roping are generally associated with retail Christmas tree operations. Greenery production is an important industry throughout New England, supporting both small and large producers of raw greenery materials and finished greenery products. The success and growth of this industry is especially impressive considering that the production season lasts only three months of the year (mid-October through late-December).

Profitable opportunities

Currently, there is much room for both growers of pine tips and producers of finished greenery products to enter the market. In addition, the production of white pine tips and other greenery materials presents an excellent opportunity for additional farm income on underutilized agricultural lands. While white pine takes a minimum of 25 years (on the very best sites) to grow to sawtimber size (greater than 11 inches diameter at 4.5 feet from the ground), pine tipping begins when trees are seven years old and just one year of tipping can more than offset the entire cost of planting and establishing a white pine plantation. Growers may sell tips to wholesale buyers by the pound or by the acre, or can produce their own wreaths and decorative items for sale at local markets and outlets.

B. Management Considerations/Options

Site selection

Before incurring site preparation and planting costs, landowners should carefully consider where pine plantations are established. Poorly drained clayey soils, elevations below 1,000 and above 3,000 feet, and dry southwestern slopes should be avoided. Both drought and high concentrations of atmospheric sulfur dioxide and ozone effect white pine and are especially damaging to the desirable tips. In addition, air pollution also decreases white pine’s resistance to insects and disease. Other than careful site selection for plantation establishment, growers can do little to reduce the impacts of air pollution on pine tips. In addition, white pine has relatively thin bark and is therefore susceptible to fire damage. Scarring from fire and forest thinning practices can injure pines, making them more susceptible to disease (e.g., red-brown butt rot), and should be minimized.

Plantations

White pine has historically been planted for timber and more recently for Christmas trees. However, in a few isolated regions, white pine is now being planted with primary consideration given to use as a greenery tip source. For example, in the Grayson Highlands region of southwest Virginia, white pine is being planted on approximately 400 acres per year in a three-county area. However, the Virginia Department of Forestry estimates that this is less than one-third of the acreage needed to be planted annually to sustain the greenery industry at current production levels. The greenery industry currently consumes over 14 million pounds of tips each year, requiring at least 2,600 acres of quality white pine growing stock, or 1,400 acres planted annually.

Much of the region provides a suitable environment for growing white pine. In the southern part of its range, white pine is found between elevations of 1,000 and 4,000 feet, but grows best between 2,000 and 3,000 feet on a variety soils and sites. To produce the healthy-looking, dark green needles desired for the greenery industry, the correct soils and growing conditions are required. On well-drained sandy or mica-based soils, white pine will out-grow all other tree species. North and east facing slopes and stream terraces are also desirable locations for establishing white pine plantations. However, other trees will out-compete white pine as soil fertility increases.

If the plantation site is on an abandoned agricultural field, little site preparation may be necessary. All that may be required is a broadleaf herbicide prior to planting to control competition. Herbicide treatments may be broadcast or band applied depending on competition to be controlled. Trees should be monitored for the first two or three years or until the pines grow above the height of surrounding grass. To avoid possible damage from herbicides after pines are established, growers may wish to mow between pines for the first few years after planting. Establishing white pine after a recent timber harvest will usually require intensive hardwood and grass control using a combination of herbicide application, prescribed burning, or mowing. For assistance on site selection, tree planting, and other aspects as plantation establishment, contract your state forester. See “Information Sources – Resources” at the end of this publication.

Tree spacing

Careful consideration should be given to tree spacing when growing pines for tips. While there is some debate over the optimal tree spacing or stocking when growing pines for tips, most professionals agree that trees should be planted between a 9’ x 9’ and a 12’ x 12’ spacing. This spacing is also the accepted stocking when planting white pine for short timber rotations and will allow the trees sufficient room for good stem (and tip) development while reducing the need to thin trees as they grow.

Harvesting

White pine tips are harvested from trees that are seven to ten years old and trees are tipped two to three times during the four-year period. Tipping generally begins as soon as normal fall needle shedding is complete, about the second week of October, and continuing through the middle of December. Tips are harvested using hand shears or a sharp knife and are cut from the lower four whorls of branches. Tips are generally 8 to 18 inches long. When cutting tips, care should be taken to leave the end, or terminal, tip on the branch allowing the tree to produce tips on these branches in subsequent years. No more than 50 percent of the greenery should be removed in any one-year; if harvested correctly, tipping will not cause long-term damage the tree. Ideally, tips are harvested immediately before going to market or being made into wreaths and roping. While white pine tips keep better than other pine tips, even white pine will not keep long unprotected. Pine tips should be stored in burlap bags in a cool, damp environment. Tips that must be stored for any length of time should be refrigerated.

C. Risk Factors

Risk factors for growing white pine include biological pests and pathogens, site constraints and air quality, storage and transportation issues, and a potential future shortage of tips. In the southeast, white pine is relatively free of insects and diseases when compared to the northern part of its range. The primary insect pests of white pine are the white pine weevil and pales weevil. Damage from pales weevil may be minimized by delaying planting for one year on harvested sites. White pine weevil is more difficult to control in widely spaced plantations but is of limited concern in the south. Major diseases of young white pine stands include white pine decline and white pine blister rust. White pine decline affects pine roots and may be avoided by not planting pines on poorly drained sites. White pine blister rust is found throughout the range of white pine and requires Ribes (e.g., currant and gooseberry) for its lifecycle. Consequently, establishment of white pine plantations should be avoided where Ribes are prevalent (i.e., above 3,000 feet elevation).

Storage

White pine tips do not store long, even under refrigerated conditions. Consequently, issues of freshness combined with low prices for raw tips constrain greenery production to areas where there is sufficient acreage of young white pine to support a wreath and roping manufacturer’s annual demand for raw material. If there is insufficient interest for a wholesale buyer of tips to travel to the harvest site, then the grower must either transport the tips to the buyer or produce and market their own finished greenery. Finished wreaths and roping should be kept from contact with the ground in a cool environment. Storage in buildings is acceptable, however good, cool air flow is critical.

Supply

For the small wreath producer selling to local craft stores and markets, adequate sources of fresh tips are generally not an issue. Many small producers collect the tips and other materials from their own land or in very close proximity to their home (i.e., the production site). This is not the case for larger producers and for the industry as a whole. As stated earlier, both large greenery producers (those that consume tons of material each year) and state forestry agencies are concerned that there is an inadequate supply of tips to sustain the industry at current production. In response, producers are forming unique contractual arrangements with tip growers (explained further in the next section). In addition, efforts are now underway to educate landowners about the benefits of growing white pine for tips. While there is plenty of opportunity for landowners to grow and sell white pine tips, not enough landowners are taking advantage of this opportunity to sustain current levels of production. Reductions in cost-share incentive programs for landowners to plant pine have only compounded the shortage issue.

D. Marketing

Growers of white pine tips may market their product in a variety of ways. The most simple is to sell unharvested tips by the tract or boundary. Generally a wholesale buyer will purchase tips on-the-tree from growers by the acre per year, usually under a three or four year contract. Unlike standing boundaries of timber, boundaries of tips are not currently sold using a sealed bid process (i.e., many buyers bidding on the same tract of tips, with tips going to the highest bidder). Rather, growers are usually contacted by a single buyer and a price is agreed upon. Buyers may or may not want a contract to be signed. However, a properly drawn contract protects both the seller and the buyer during the transaction.

A contract need not be long to be legally effective and at a minimum should: identify the seller and the buyer; note the location of the tips to be sold; specify payment amount and method; specify the number of years tipping; ensure landowner liability protection. The landowner may also want to include a clause specifying minimal damage to residual trees and land from vehicles and harvesting. Even though many tip buyers have a prepared or “standard” contract form, the landowner should seek legal council before signing the contract. As the industry grows and tips become more scarce, growers will have more leverage in the negotiating process and will undoubtedly command a higher price for their tips. Growers should always demand that the agreed upon price for tips be paid before the tips are cut.

Wholesale Buyers

While many buyers harvest the majority of the tips they use, landowners have the option to harvest their own tips and sell to wholesale buyers by the pound. If a landowner does choose to harvest their own tips, they should keep a few points in mind. Buyers are interested in healthy, dark green tips and do not want excessive woody material. If you are harvesting your own tips for buyers, be prepared for the tips to be inspected and to receive less for tips that are yellowish, dry, or containing large woody stems. Also, tip buyers will often have a list of prices by-the-pound for other greenery items such as boxwood, Fraser fir, hemlock, running-cedar, and princess-pine. You should expect your tips to be weighed and to be treated fairly. Plan on taking your tips and other greenery to the buyer as soon after harvesting as possible. Prices for most greenery drop quickly as freshness deteriorates. Also, call as many local buyers as you can to compare prices.

Very recently, a few larger wholesale buyers have developed a unique plant/tip/keep contract with landowners. The arrangement works as follows: the buyer plants pines and pays for all site preparation fees and later has exclusive tipping rights for three to four years. In return, the landowner receives approximately $100 per acre (for the total length of contract), keeps the growing pines after the four-year tipping cycle is complete, and has no further obligations to the tip buyer. The landowner may then choose to allow the 14 year-old white pine to grow to sawtimber age, may cut the pines and begin a new tipping cycle, or cut the pines and convert the site to another land use. While this arrangement is not as financially lucrative to the landowner as planting and harvesting their own tips, this type of arrangement may be advantageous for landowners who favor a hands-off land management approach. The benefits from this type of arrangement are certainly better than leaving agricultural land lay idle. Again, landowners should seek professional legal advice before signing any contract.

Direct sales

Finally, growers may choose to produce their own finished greenery products (e.g., wreaths, swags, sways, and roping) for sale to local outlets. Because buyers representing large national retail chains need to purchase thousands of wreaths for hundreds of stores, they generally are not interested in dealing with a small producer. Nevertheless, the small grower/producer has many options to sell his or her wares. Promising marketing outlets include nurseries, local grocery stores, craft stores, bed and breakfast operations, hardware stores and advertising in mail order sections of popular magazines. In addition, marketing of greenery products via the internet has grown rapidly since the mid-1990’s. The World Wide Web allows producers to market greenery products at a relatively low cost and gives producers access to many more potential customers than is possible via conventional marketing techniques.

Because fresh mass-produced greenery is usually readily available during the holiday season, the price small producers can charge for their wreath is limited. Many smaller producers conduct their greenery operation as a by-product of a Christmas tree farm and it is not uncommon to find wreaths and other locally crafted holiday items marketed alongside Christmas trees. In fact, many Christmas tree growers earn extra income by using the trimming waste (tips) in holiday greenery. Little equipment is needed and wreaths may be made by hand.

E. Costs and Revenues

Before you start any new non-timber forest product enterprise, it is important to gather and analyze current cost information. In addition, some initial study of potential markets should be conducted, thereby assuring that your investment will be warranted.

The Enterprise Budget

An enterprise budget is simple financial tool used to determine if an enterprise will be profitable or not. Very simply, an enterprise budget adds up all the cost of the operation for a year or cycle of production. You then determine, as realistically as possible, the revenue you will expect to generate. By subtracting the total costs from the total revenues, you have an idea of the profitability of the operation before you start. A sample enterprise budget is provided in Table 1 that should act as a checklist for considering cost and sales price information. The following section discusses potential costs, however, to give an accurate estimate, use cost information for the area where the business is located.

Costs

Site preparation costs - Site preparation costs for the landowner/grower will depend on the previous use of the site to be planted in pine. Costs on abandoned agricultural fields can range from $0 to $100 per acre depending on the need for chemical or fire control of multiflora rose, briars, autumn olive, and other species that will compete with small pines for sunlight, nutrients, and water.

Establishment costs - Establishment costs include the cost of the pine trees themselves and the cost of labor to plant them. In 1999, white pine trees in Virginia cost $90 per 1,000 trees or $45 per acre (500 trees) if planted on a 9’ x 9’ spacing. Costs in surrounding states were similar. Both hand planting and machine planting costs average $50 per acre, again assuming planting on a 9’ x 9’ spacing. Landowner cost share incentive programs can greatly offset site preparation and establishment costs incurred by the landowner. If obtained, cost share assistance will greatly increase the returns from an investment in growing white pine for tips.

Maintenance costs - Like site preparation costs, maintenance costs will vary depending on previous land use. If the last use of the site was forest, then pine trees will likely need to be sprayed with a chemical herbicide about three years after planting to kill hardwood stump sprouts and other competition. Chemical release costs around $50 per acre. Mowing may be sufficient to control plant competition if the site was previously in agriculture. Mowing costs are typically about $20 per acre. When managing white pine for tips, few other costs are incurred before tipping. Growers must remain vigilant for pests and diseases and control for these factors when present. Chemical treatments for pests generally cost $50 per acre.

Wreath-Making costs - Wreaths are produced by hand either with or without use of a wreath-making machine. Simple wreathing machines consist of a foot-operated device that clamps greenery into the wreath frame or ring. Simple wreath-making machines cost approximately $150 to $200. The cost of wreath rings vary depending on diameter width; 10-inch frames (which yield a 16- to 18-inch finished wreath) cost about $1 per unit. Buying rings and other supplies in bulk will significantly reduce the per unit cost of these items. Other costs include a quality pair of hand clippers ($25) and greenery preservative ($35 per 3-gallon jug).

Revenues

Cost-share programs – Many federal, state, and private natural resource agencies have financial assistance programs designed to help landowners establish and maintain trees on private property. Examples of “cost-shared” practices include: site preparation, tree purchasing, tree planting, and control of competing vegetation. If available, cost-share assistance can greatly increase the profitability for any forest product enterprise; usually by reducing establishment costs. It should be noted that the availability of some forestry cost-share assistance will depend on the final product for which trees are grown. That is, trees grown solely for tipping that are harvested after age 14 may be viewed as an agricultural crop and may not qualify for forestry cost-share. However, trees tipped and then grown for pulpwood or sawtimber size products may qualify for forestry cost-share assistance. Because the requirements and availability of cost-share programs vary greatly by state and year, details of specific programs are not listed here. Landowners should check with their local state forestry office and Agricultural Service Center for details on cost-share programs and availability in their area.

Table 1. NINE-YEAR ENTERPRISE BUDGET for: White Pine Holiday Wreaths
Developed by Dylan H. Jenkins & A. L. Hammett
ITEM		Unit	Qty	Price	Average per year	Net Present Value
GROSS REVENUE (3 year average for years 7,8,9)
	sale of wreaths, retail (16" wreath)	pieces	250	$ 20.00	$ 5,000.00
	sale of wreaths, wholesale (16" wreath)	pieces	150	$ 6.50	$ 975.00
Total Gross Revenue					$ 5,975.00	$11,259.10
VARIABLE COSTS (3 year average for years 7,8,9)
	transportation to market	miles	500	$ 0.27	$ 135.00
	packaging (boxes)	per 25 lb.	293	$ 0.50	$ 146.50
	labor - tip harvesting	hours	63	$ 6.00	$ 378.00
	labor - hauling	hours	12.5	$ 6.00	$ 75.00
	equipment maintenance	hours	10	$ 6.00	$ 60.00
	wreath rings	12" ring	300	$ 1.00	$ 300.00
	bundling wire, 24 gauge, galvanized steel	250' roll	3	$ 4.50	$ 13.50
	advertising costs	hour	70	$ 6.00	$ 420.00
	equipment maintenance costs	acre	3	$ 70.00	$ 210.00
Subtotal Variable Costs (Years 7,8,9)					$(1,738.00)	$(3,275.03)
VARIABLE COSTS (yearly average for years 1-9)
	yearly maintenance costs (stand)	acre	3	$ 25.00	$ 75.00	$ 510.13
	labor - maintenance (stand)	hours	50	$ 6.00	$ 300.00	$ 2,040.50
Subtotal Variable Costs (years 1-9)					$ (375.00)	$(2,550.63)
Total Variable Costs						$(5,825.66)
FIXED (1st year establishment) COSTS
	building (10-year life)