In December, the Nursery Management staff asked liner growers to discuss market shortages, various trends and how the increased demand for plants in 2020 is likely to affect 2021 sales. Liner growers often have the pulse on the market before the rest of the industry since they’re the first stop in the supply chain.

The running themes from our conversations: order early, be flexible and expect plant demand to be high again in 2021.

The beginning of the 2020 quarantine created some anxiety among the green industry, but that was quickly swapped with action when most states deemed garden centers as essential, allowing them to stay open, and consumers clamored for plants. Being at home 24/7encouraged both experienced and new gardeners to buy plants for the inside of their homes, to beautify their outdoor spaces and to grow their own food. That resulted in double-digit sales increases among growers across the country.

“We are up 22% in gross revenues for 2020 and our bookings for 2021 are ahead of 2020 by a similar percentage,” says Brian Decker, president of Decker’s Nursery in Groveport, Ohio. “We do not know yet if this is earlier ordering or sales growth, but it is probably both.”

Mark Krautmann, co-owner of Heritage Seedlings in Salem, Oregon, also experienced a record-breaking year in 2020 with sales up about 25%.

“Last spring, we didn’t know if we would have any sales at all. And it turned out to be the best ever,” Krautmann says.

Most growers expect continued higher demand in 2021.

“Right now, the bookings for ’21 are strong, and I think the demand we saw in ’20 will carry over into 2021,” says Alec Charais, marketing and communications manager at Bailey Nurseries in St. Paul, Minnesota. “There’s such an increased demand for plants right now across the board — whether they’re indoor plants or for the exterior, whether they’re shrubs and trees or perennials and annuals. Because people have stayed home, they’re focusing on beautification. The home environment has become the central hub.”

More growers were “buying on the fly” in 2020, something that’s not typical, says Rich Bailey, sales manager at J. Frank Schmidt & Son Co. in Boring, Oregon.

“People are having really good sell-through at their stores, so they're buying inventory more frequently than they would typically. Demand on their end has increased their trends and increased buying with us, which is all positive,” Bailey says.

Vans Pines Nursery in West Olive, Michigan, received dramatic sales increases from online garden retailers.

“A lot of them are telling us, ‘Turn on the faucet and keep it flowing to us’ because they can’t hang onto anything,” says Evan Van Slooten, Vans Pines president. “A lot of them are anticipating demand to continue into 2021.”

The 2020 sales gains caused growers to dip into their 2021 inventory, which is causing shortages in the market.

“Shrub liners are in high demand. A lot of growers were doing extra potting to make up for that demand,” says Ron Amos, president of Evergreen Nursery Co. in Sturgeon Bay, Wisconsin. “They potted more, and they went into their next year’s stock to sell. They’ll need to replenish with liners to build their numbers back up again. The strong demand really put a push on more liners, both in evergreens and deciduous crops. A lot of growers have had to push some things out the door and needed to replenish. It’s good for everybody.”

At J. Frank Schmidt & Son, their fastigiate oaks and specialty varieties are short, which is not necessarily uncommon. At Vans Pines the exotic firs such as Nordmann, Trojan, Canaan, Turkish and Korean are limited or even sold out, Van Slooten says. He’s also already sold out of Canadian hemlock for 2022 orders.

“That has impacted our sowing schedule the most,” he says. “We continuously bump up our numbers for that crop, and every year we sell out very early. Combine that with the fact that we haven’t been able to find seed, so I think [Canadian hemlock] is going to be the No. 1 short item in the industry as a whole.”

Besides increased demand, Van Slooten says climate change has impacted the availability of seed and the way seed orchards function. He thinks seed availability is “going to be the biggest driver of what is actually available in the marketplace.”

Production flexibility will help some growers through the shortages, Charais says.

“We’re seeing all that sell-through happening at high levels, so growers may need to produce their products differently,” he says.

Using bareroot material or upshifting plants may be options that could help ensure growers have product going into spring, he adds.

“I think it's a huge learning opportunity and I think it could lead to some positive outcomes in terms of growers being successful from a production standpoint,” Charais says.

When shortages are looming, it’s critical to order early.

“I think by the time we get into mid-January the industry will be short on so many things to the point where we have to take people’s wish lists and confirm half of what’s on it,” Krautmann says. “If growers and retailers wait [too long to order], I think they’re going to be very disappointed. In August or so, we started encouraging our customers to simply go to what we call a standing order or a contract, because that helps them assure supply and helps us … so we’re not speculating beyond the comfort zone of sales.”

Vans Pines Nursery is already taking orders for 2022 sales.

“Next year, my gut tells me we’ll still have very high demand for our product,” Van Slooten says. “Then the following year it will taper off.

Bailey at J. Frank Schmidt warns to not cut back on liner orders and keep building up supply for your customers to make sure they’ll have trees to sell in the future.

With limited supply and high demand, expect to pay (and subsequently charge) some higher prices in 2021.

“Since costs are not stagnant and supply is limited, some price increases are likely,” Decker says.

Amos is expecting prices to increase.

“We’ve been fortunate that we’ve been able to see some price increases over the last few years, and I hope that continues,” he says. “There have been a lot of years where we’ve had to hold prices.”

Other consumer products are going up in price, and plants will likely be no different, Charais says.

“Pricing is going to be a bit higher for liners, but with that increased demand, I think we can command a higher price at the retail level,” he says.

In 2020, the entire supply chain reacted and adapted quickly.

“We started the spring ready to buy cots for managers to sleep at work as a step to survive,” Decker recalls. “We ended the year with record profitability and we’re spending money on American-made equipment and products for expansion.”

People’s buying habits changed in 2020 and the green industry, including J. Frank Schmidt & Son, were able to evolve.

“It’s been an extremely challenging year for our industry,” Bailey says. “I think all of us pivoted really well Businesses have learned to do thing differently, and I think many of those things will stick.”

Charais doesn’t expect the industry to revert to all of its pre-pandemic ways.

“How we serve the customer — whether it's on a B2B level or the consumers themselves — the ways that we serve the customer are going to completely evolve” because of tools that were put in place in 2020, including online sales, curbside service and increased education, he says.

Will the new customers of 2020 continue to make plants a priority in 2021? It’s the proverbial million-dollar question.

“We need to see if the new generation of stay-at-home gardeners embrace their new hobby as the pandemic wanes. This is the consumer spike we have been hoping for. Let’s see if it sticks,” Decker says.

Krautmann doesn’t anticipate the market slowing down.

“I don't see a slowdown. I just don't. I guess what we can all hope for is some rational policymaking at the federal and state levels. It can be a bit of a more calming hand in the scheme of things,” he says. “2021 is an opportunity, right? Opportunities are everywhere.”

Editor’s note: Matt McClellan, Sierra Allen, and Julianne Mobilian contributed to this report.

A group of scientists have been working on gene mapping projects to help answer many of the common questions in weed science: What makes a weed “weedy? What is the genetic basis for herbicide resistance? Can we develop better-targeted weed treatments or alter weeds to make them easier to control?

According to the Weed Science Society of America (WSSA), to date, scientists have mapped the genomes of six weeds known to cause significant crop losses, including horseweed (Erigeron canadensis aka Conyza canadensis), Palmer amaranth (Amaranthus palmeri), waterhemp (Amaranthus tuberculatus), smooth pigweed (Amaranthus hybridus), red rice/feral rice (Oryza sativa), and kochia (Kochia scoparia aka Bassia scoparia). Partial draft genomes are available for at least 35 additional weed species.

Scientists say mapping weed genomes is especially complex due to the high level of repetition typically found in a weed’s DNA.

“It’s like trying to work on a puzzle made up largely of pieces that are precisely the same, but each occupying a unique place in the total picture,” says Eric Patterson, a weed geneticist at Michigan State University. “How do you determine which piece goes where?”

Sorting out the repetitive content can be time consuming and expensive, and it requires the right expertise and tools. However, new technologies are reducing the cost of genome assembly and are helping weed scientists produce more complete and accurate maps of gene sequences.

In addition, efforts are underway to advance weed genomics through collaboration. One example is the International Weed Genomics Consortium, an organization spearheaded by Todd Gaines of Colorado State University with support from weed science colleagues around the globe. Consortium members are working together to set priorities, share tools and resources, and build reference genomes for the world’s most troublesome weed species.

“By deepening our understanding of weeds, we hope to find ways to delay the evolution of resistance and to open the door to new, more sustainable approaches to integrated weed management,” Gaines says.

To date, scientists from the University of Illinois have used their understanding of Palmer amaranth genetics to develop a test that can rapidly screen seed mixtures to detect whether they contain seeds from this troublesome weed. And a team at Scientists at Rothamsted Research conducted a successful lab experiment using what they know about the blackgrass genome. They were able to silence specific genes and make herbicide-resistant blackgrass weeds susceptible to treatment.

The WSSA reports the gene mapping project could determine new and more targeted weed management strategies; how we might alter weed populations to reduce their competitiveness and make them easier to control; understand how to improve a crop’s ability to compete more effectively against weeds; and uncover patterns related to when and where invasive weeds have been introduced and use the information to develop strategies that can limit new introductions.

The science behind the research

The goal of genome mapping is to understand how the various components of the genome (nucleotides) are arranged. With a draft genome, there might be thousands of small, assembled fragments, but how they fit together remains unknown. This fragmentation limits the mapping’s usefulness. In reference genomes, the sequence has been determined. There are uninterrupted segments of DNA with few gaps or errors. Draft genomes with partial assemblies may be sufficient to understand population biology or the evolutionary relationships among weed species. They may also be sufficient to develop molecular level tools for identifying specific weed species. Reference genomes, though, are needed to tackle more complex questions, such as the biology underlying weedy traits and how complex factors interact to produce herbicide resistance.

Scientists have uncovered a wide range of new insights from genome sequencing projects. For example, when Midwest farmers discovered that seed mixes used on Conservation Reserve Program (CRP) acreage contained Palmer amaranth, alarm bells went off. The weed is extremely aggressive and hard to treat. Seed growers needed a way to ensure their mixtures were Palmer amaranth-free. Researchers at the University of Illinois were able to use their understanding of genetics to develop a rapid screening test that can detect the presence of Palmer amaranth DNA in seed mixtures — helping to prevent the introduction of this problematic weed into CRP acreage across the country. In another example, glyphosate-resistant horseweed has caused yield losses of up to 83% in soybean and up to 46% in cotton. Researchers have used genomics to understand how some populations of horseweed in Canada evolved very high levels of glyphosate resistance. They used the information to document the first populations of horseweed in the U.S. that exhibit the same high levels of resistance. It is hoped this early detection can lead to integrated controls that prevent the spread of herbicide-resistant horseweed.

Before gene sequencing, it was hard for scientists to understand the mechanisms involved in the evolution of herbicide resistance. Now they have learned there is no single genetic “cause.” Instead, there are multiple pathways for the evolution of resistant traits, making genetic analysis of troublesome weeds especially important. Researchers have identified five “superfamilies” of genes that are likely involved. They are large, diverse and part of the underlying pathways weeds use to survive the stresses they encounter in their environment.

Photo by Tau’olunga

Genetic differences between male and female weeds can influence the spread of herbicide resistance. Researchers at the University of Illinois have successfully sequenced the DNA for male and female Palmer amaranth and waterhemp plants to identify the genetic basis of sex determination. This reproductive difference promotes outcrossing and genetic diversity, which can promote the evolution and spread of herbicide-resistant populations. Using data sets compiled from sex-specific and sex-biased genome sequences, researchers were able to distinguish between male and female plants from multiple, geographically-distinct Palmer amaranth and waterhemp populations with a 95% or greater accuracy. What does this mean for the future of weed control? Both Palmer amaranth and waterhemp are resistant to multiple herbicides. It is possible to imagine how genes might be modified to ensure all offspring from Palmer amaranth and waterhemp plants growing in a given location would be of the same sex — causing the population to collapse.

Researchers working on the horseweed genome have determined that repeated use of glyphosate has led to multiple mutations that have caused an increased expression of transporter genes and of glutathione S-tranferase and glycosyltransferases enzymes. Understanding the genetic basis of resistance may pave the way for using CRISPR/Cas technology to insert a new gene sequence that would replace those herbicide-resistant traits.

Goosegrass (Eleusine indica) is one of the most common and destructive agricultural weeds in the world. It is incredibly resilient, with the ability to survive extreme drought, heat and low mowing. It also has evolved resistance to at least seven classes of herbicides. An international team of researchers mapped the weed’s genome — an important first step in understanding why goosegrass is so successful and can adapt so quickly. They were able to identify multiple goosegrass genes associated with herbicide resistance. The same team uncovered genetic markers related to disease resistance, drought resistance and other goosegrass traits. Understanding these important pathways may suggest new molecular targets for herbicide development and for other novel weed management strategies.

For more: www.wssa.net

Source: Weed Science Society of America

Are you training your weed management staff properly to avoid herbicide resistance and employing best management practices? We spoke with Jeffrey Derr, professor of weed science at Virginia Tech, about ways to identify and prevent herbicide resistance throughout the nursery.

Nursery Management: What are the telltale signs of herbicide resistance?

Jeffrey Derr: The most obvious sign is when you see a given weed species increasing in density, especially when you used to get really good control of that weed. If weeds are escaping more often, you likely have an issue.

If you tried increasing the rate and still don’t see control, that’s another red flag.

When a weed develops resistance, it often tolerates a particular herbicide at an increased rate. You may have heard the term ‘superweed,’ but that’s a real misnomer. Those weeds aren’t going to be any bigger or grow faster. In most cases, they’re resistant to a certain herbicide.

Herbicide rotation is critical for a successful weed management program. If you use the same herbicide year after year, you’re definitely increasing the likelihood for herbicide resistance.

When a grower contacts us and suspects herbicide resistance, we collect specimens of that weed and bring it back to the greenhouse for testing. We do herbicide applications of varying rates to try and prove resistance in greenhouse trials. In our research, we look at elevated application rates. Some resistant species will tolerate four to eight times the labeled rates.

NM: Besides lack of rotation, what are some other reasons herbicide resistance may occur?

JD: There may be some genetic diversity in the population of that weed that is displaying herbicide resistance. With horseweed for example, there will be thousands of seeds in a field and one out of a 100 may have a mutation that was resistant. When it survives, you may get a large population of resistant weeds.

Annual bluegrass has a lot of variability in the species, which may increase its potential for being resistant to herbicides.

Couple that with repeated use of that same herbicide over time and the ‘survivor’ produces seed, and now you have a larger population of resistant plants. It becomes the dominant biotype.

NM: What are some other reasons an herbicide may not be working properly besides resistance?

JD: There are many reasons herbicides are not working properly that don’t point to resistance issues. They may have been mixed or applied the at wrong rate.

The weather conditions may have played a factor. Did it rain right after you applied a post-emergence herbicide? Was it really cold when you treated? Was it windy?

Even distribution is critical, so calibration of equipment is important.

Perhaps the products weren’t stored properly. Proper storage includes keeping the chemicals dry and preventing liquids from freezing.

Try to mix up only what you can use in a day because mixes can break down.

Water quality can be an issue, including pH and sediments in the water.

Make sure surfactants were used properly.

NM: What are examples of weeds that have become problematic in terms of management?

JD: Glyphosate-resistant weeds, including horseweed, have become a problem. A lot of that resistance is coming from glyphosate used in no-till crop production. Those seeds can blow in from a soybean field, for example, into a nursery setting. Those seeds can travel a long distance. That’s why it’s important to know what your neighbors are growing and what they’re using for treatment.

There are a few key weed species that are more likely to develop resistance based on their physiology, such as horseweed, annual bluegrass and palmer amaranth. One of the earliest cases of an herbicide-resistant weed in the nursery industry was common groundsel.

NM: What is your checklist for preventing herbicide resistance?

JD: First and foremost, rotate with different modes of action. When tank mixing, use herbicides from different modes of action. Use both pre- and post-emergence herbicides. Integrate non-chemical control methods when you can. Do what you can to prevent weeds from setting seed to begin with by hand weeding, for example.

Watch for weeds in your rooted cuttings, media components and other products you’re bringing into the nursery.

Clean your equipment, including tractors and mowers that are used between different fields. That equipment could be housing weed seeds, including resistant weed seeds.

For more information on herbicide resistance, visit www.cambridge.org/wet and search for “Herbicide resistance in the nursery crop production and landscape maintenance industries” by Jeffrey Derr, Joe Neal and Prasanta Bhowmik.

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Uncertain economic conditions in the past several months have created new opportunity for owners of businesses who are able to produce cash flow. They can cash out now. The time has not been this pregnant with opportunity for years. Why?

It’s all about rates and returns. A key number considered when placing a value on a business is the interest rates available in the open market. Many times, the Treasury Bill, or T-Bill rate, is referenced. The lower the interest rate the higher the value of a business. For some time to come, it will be hard to achieve more than 1% return from interest even in the long term. The Federal Reserve has telegraphed that for the next two years they will keep interest rates near zero. Investors are seeking better and more reliable returns on their money. They are dissatisfied keeping it on the sideline earning almost nothing in interest. Right now, there is enormous liquidity in bank accounts looking for a home. Warren Buffet is reported to have two major holdings — one is Apple and the other is cash. This legendary investor can’t seem to find a suitable place to park his money for return.

Many horticultural businesses have reliably generated predictable positive cash flow over the years. The ability to generate significant repeatable positive cash flow year in and year out is highly desired when looking at any business to buy or invest in. If you own one of these companies, it might be high time to sell. For many it has been a great year, while others have suffered losses.

In horticulture there is a skill level a buyer or investor must have to own and operate a green-industry business, or at least be able to hire qualified expertise. That is also true in pharmacology, technology and finance. All those hot categories are driven by superior expertise and innovation. Good people are like gold in this market. Some company owners have visions of their children taking over. Historically, it is unusual for a second generation and even less for a third generation to do as well as the founder did. The old adage “rags to riches to rags in three generations” is still true in many cases. It might be better to find a buyer and leave your grandchildren with cash and not a business to run. There are exceptions, but few.

See how you measure up

Deciding you want to sell your business or attract an investor is the first step. Once that decision is made, you need to get the company ready for a sale. A careful evaluation of the things that add or subtract from/to your business value will need review. Investors know what they are looking for in buying a business.

A: Size of business (compared to others in the space) 1 – Small, not a big player in the market. 10 – We are one of the largest and most successful in our space.

B. Quality of the financial records 1 – Pretty scattered and fragmented, a bit better than a shoebox full of receipt slips. 10 – All our records are computerized, complete and reviewed; our CFO keeps us well-informed.

C. Positive cash flow and potential increases 1 – Not generating significant cash flow or profit. 10 – We are a cash cow; lots of room to grow and even double our net revenues.

D. Need for capital investment 1 – Will need significant upgrades; will need capital soon. 10 – All our equipment and infrastructure are up to date and paid off; no needs on the horizon.

E. Credit line requirements 1 – We use a large credit line and have difficulty in paying it back sometimes. 10 – We don't need a credit line, have significant cash resources to back up.

F. Owner-centricity – management team 1 – This company can't exist without me there every day; only I know how it works. I don't have anyone to back me up when I am sick. If I died, this company would die. 10 – If I never showed up again it will work just fine. This is nearly a passive investment. I have great people. If I retired tomorrow, I have a team who can pick up where I left off and maybe make it better.

G. Workforce quality and access to labor as needed 1 – We just can't find anyone who wants to work anymore. 10 – There are a lot of good people in our area. Hiring is easy because people want to work for a company like ours.

H. Customer concentration and loyalty 1 – The bulk of our business comes from a handful of steady customers. There are a few that buy once and never come back again. 10 – Our top 10 customers only make upon 5% of our total revenue. Losing a customer is not a death sentence, our customers see us as an essential primary vendor. They come back again and again.

I. Competition in the market for the dollar 1 – Lots of aggressive competition; we have to discount deep to make deals. 10 – We are the competition. In our space we make the rules.

J. Compliance with environmental, labor, immigration, OSHA and EPA regulations 1 – We fly under the radar and keep the feds at bay. 10 – We try to make sure we are never vulnerable to violation of any regulations that could shut us down.

Obviously, no company on the planet can score a 10 in every category, but the closer to 100% in each of these important areas, the more valuable your company will be in the eyes of a buyer.

You can’t bluff. Due diligence will uncover the truth. You can’t claim what you can’t prove. An objective business appraisal and valuation can help substantiate your asking price.

This checklist can reveal things that need time and attention. The market is ripe and there are rollups taking place. You can cash out now if you look sharp.

The most important of these is positive cash flow. Positive cash flow is the amount of cash that generated that might be used to buy equipment, pay surplus salary, money used in discretionary ways like travel, pays interest on debt, and income taxes. The term used is EBITDA, (earnings before interest, taxes, depreciation or amortization). This differs from profit in that it only looks at the way a ers and acquisitions in horticulture for 2021, it is time to consider your future and the future of your company. There has never been a better time.

Gene is a certified personal property appraiser specializing in nursery business appraisals; generedlin@att.net.

Opinions expressed are those of the author and do not necessarily represent the views of GIE Media, Inc.