3. Idea: Distributed Christmas Tree Farm
Thursday, December 17, 2020
When you drive through any city or town, you’re bound to see a plot of land sitting there useless. Property taxes are designed to ensure that land is being used as efficiently as possible. By taxing the ownership of land, the government is essentially ensuring that land is being as productive as possible.
So why are there empty plots of land everywhere that don’t seem to have any reason for being empty?
I can think of a few reasons off the top of my head:
- Maybe the plot is an investment that seeks to earn a return by just reselling in however many years
- The plot of land was foreclosed on and is now owned by a bank that doesn’t know what to do with it
- The land is seeking permits for future construction
Of course, there are plenty more reasons why a plot of land would sit empty. Then I thought, “why wouldn’t they grow some Christmas trees on that plot of land? Clearly there is a lack of supply of Christmas trees if I pay $200 for a tree at Home Depot.”
Too much work probably
Then I thought, “why wouldn’t they hire someone else to grow Christmas trees on that plot of land?”
Again, too much work probably
Then I thought, “what if all the empty plot owners hired someone to grow Christmas trees on all of the empty plots?”
Still probably too much work, but I may be on to something here
There are plenty of problems to think through here. When plots are all distant from each other, many of the economies of scale are lost. If you were planting something other than Christmas trees, how would the plots of land be irrigated? But, maybe there are some plants that can grow without much more than natural precipitation (succulents?). Maybe it would be worth it to hand water the plants? Maybe there are cheaper ways to irrigate that are not immediately apparent and would take some brain power to figure out a creative solution.
Another lost economy of scale would be the harvesting process. Now instead of just dragging a tractor back and forth across a hundred-plus acre field, you would need to hand harvest.
With some rough numbers, you can find that this would be a profitable endeavor. The harvesting process could be a fun, “come cut down your own Christmas tree” activity, or could be cut down by hand by your local high schooler. This would probably take a bite out of the margin to the tune of about $20 per tree. For years without sufficient rainfall, you might have to hire the high schooler again to water the trees every now and then. I’m guessing this would cost another $20 per tree.
Now here’s a clever question, are you growing from seed? Or, would it make sense to start with a sapling and shave a few years off of time to harvest? Saplings cost about $10 (on the high end), so there goes another $10 per tree. So far, you’ve got costs of $50 per tree, which is less than the $200 or so market price per full-grown tree. So, assuming you can fetch that market price, you are in the black about $150 per tree less taxes and fees.
Maybe there are more profitable plants to grow in this type of a distributed environment. Maybe there are plants that grow quicker, use less water (or are more easily irrigated), or could be managed by a 16-yr old. So many things to think about.
I’m sure there are plenty of set backs that I haven’t thought through, but it’s a start. My intuition tells me that whenever there is an inefficiency (empty plots of land) that is solved, there are profits to be made.