Sailing through the storm

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Growers from across the country analyze the foggy state of the industry.

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The novel coronavirus, ensuing uncertainty, quarantines and stay-at-home orders have created a challenging environment for nurseries.

Wholesale nurseries have had to determine whether they are allowed to stay open in the wake of COVID-19. Nurseries that ship cross-country have had to track whether their customers are open, as well. Landscape contractors and retail garden centers in some states have had to fight for “essential” status, a struggle that continues at press time. Keep an eye on our website (nurserymag.com) for the latest updates.

Many nurseries have taken the next step to determine how to abide by the guidelines set forth by the Center for Disease Control. Giving up on spring isn’t an option.

By and large, our nation’s wholesale nurseries are still shipping trees and shrubs even while social distancing. They have constantly evolved their workflow and best practices as guidance from federal, state and local authorities is updated, and in some cases, reinvented their business on the fly. As such, any operational changes or new protocols mentioned in this article are accurate at press time in late April. Depending on when you read this article, they may no longer be in place.

Alan Jones, owner of Manor View Farm in Monkton, Maryland, says his business has stayed open with some changes.

The 100-acre nursery grows a wide range of finished B&B trees and shrubs and propagates a wide selection of potted shrub liners for sale to growers. Jones says the nursery has slightly reduced its office hours by one hour a day. Delivery from its landscape distribution center to job sites is still very heavy, he says, though walk-in traffic has slowed.

“Landscapers in Maryland are considered essential and most are still working,” Jones says. “A few companies have closed voluntarily out of concern for their crew’s health.”

Christa Orum-Keller, chairman and president of Midwest Groundcovers, says her wholesale business is fully operational and ready to serve its customers.

Midwest Groundcovers, based in St. Charles, Illinois, produces more than 20 million plants in one of the broadest collections of species and plant groups of any nursery in the U.S., over 655 acres of production facilities.

Dealing with constantly changing state regulations kept Christopher Uhland, owner of Harmony Hill Nursery in Downingtown, Pennsylvania on his toes. While nurseries and greenhouses were deemed essential and permitted to stay open, in mid-April the governor ordered all independent retail garden centers to close. They were not allowed to have no-contact sales through curbside pickup or delivery, which was a compromise in several other states. When the pandemic started, Uhland had a contingency plan. As it progressed in the beginning, he planned to dig his normal supply of orders, plus a few extras to have on hand when the situation broke. Instead, he had to proceed with extreme caution and dig only on speculation. With landscape customers cancelling or postponing orders because they aren’t permitted to do commercial installations in some cases, he’s finishing up orders, wrapping up his fertilization program and getting into shut down/summer maintenance mode early.

Ariel Montanez, general manager of Pender Nursery in Garner, North Carolina, says the pandemic has yet to slow down production at the nursery, but they have experienced a 5-10% decline in sales compared with this time last year. While that is a workable situation, Montanez says with the ideal weather the area was experiencing before the nation started sheltering in place, he thought the nursery, which sells to landscape contractors, rewholesalers and retail garden centers, could have “easily seen a 25% increase in sales over last year.”

North Creek Nurseries, a wholesale propagation nursery in Landenberg, Pennsylvania, has also experienced about a 5% decrease in sales. Steve Castorani, North Creek's president, says the shifting regulations and closures have affected his customers.

"We anticipate demand when things open up, so we are still producing new product," he says.

Lorne Blackman, owner of Walla Walla Nursery experienced a roller coaster effect in his home state of Washington.

“We were doing OK at first, until our customers started closing,” Blackman says. “A lot of cancellations came in during the first two weeks of April. But at the last minute, business rebounded, and we came in about 80% of last year.”

He expected late April to be a “blowout” in sales for the 40-acre nursery that sells primarily to rewholesalers and independent garden centers. The nursery, which employs 170 people, was awarded funds through the Small Business Administration’s Paycheck Protection Program (see page 14 for more details on relief packages).

John Lewis, owner of JLPN Liners in Salem, Oregon, had shipped out nearly all of his liner material before the virus put a stranglehold on the country. His only cancellations, which represented less than 1% of his sales, were from nurseries in Eastern Canada that couldn’t get their labor from South America.

Extremely wet weather, not COVID-19, caused a dip in sales in April at Wolfe Nursery Direct’s Fort Worth, Texas, rewholesale location. Manager Stacy Estep says although many of her landscape customers jobs cancelled or postponed, they’ve made up for it in new business and many are booked up a month to six weeks in advance. But her customers who do new installations are worried about the future of the housing market, which will also impact her business, she explains.

Loma Vista Nursery in Ottowa, Kansas, is now applying lessons learned from the 2008 economic downturn, says president Lyndsi Oestmann. The nursery “invested thoughtfully in safety and security for our team and in the financial health of the company,” she says.

“As a company, we’re here to help. We’re here be part of the process of ensuring that this industry is as it’s always been: essential,” she says. “Through trusting in what we know, what we’ve experienced and where we’ve been — our industry can apply the best of its key learnings to a future we may not be able to control, but that we can step into with confidence in who we are as professionals and in the valuable services we provide.”

New precautions

Orum-Keller has implemented some changes to Midwest’s protocols in line with the CDC’s precautions. This includes moving as many primarily office and sales employees as possible to working remotely and shifting in-person meetings to video meetings. Midwest has also separated its production work teams, so they are not mixing — in break rooms, bathrooms, etc. By cutting back on intermingling and fraternization in somewhat close quarters, that change aims to reduce or limit the possibility of infection in on-site work forces. Midwest has also been encouraging customers to use the company’s online resources including an increased emphasis on online ordering. Shipping is taking place in the normal fashion, but Midwest has set up hand washing stations on its delivery trucks. The company also is eliminating the need for papers to be signed, which is another way to reduce the spread of the virus through limited contact of commonly touched objects. Orum-Keller also is preparing for an influx of delivery jobs.

“We expect a possibility that when things open up, there will be more requests than usual for delivery of orders,” she says.

The crew at JLPN created four- or five-person squads instead of the normal 15-person teams.

“Now seven or eight teams are taking care of production, but spread out and scattered throughout the nursery,” Lewis says.

At Manor View Farm, account managers and appropriate office staff are working from home. No customers or visitors are allowed in the office and walk-in customer transactions are conducted by phone or through intercom. Jones and his team have asked walk-in customers to call in their orders 24 hours in advance of their pickup, so their orders can be pulled prior to their arrival. Manor View’s yard salesmen are following CDC guidelines and wearing masks. Despite the difficulty, the nursery is making sure there are clear lines of communications with all staff and customers.

“The health and safety of staff and customers is taken seriously,” Jones says. “We have always worked hard to make sure our customers are successful and during these difficult times it is even more important to help customers be successful and safe.”

Production staff at Walla Walla Nursery and North Creek Nurseries are practicing social distancing and wearing masks, and sales staff are working from home. The indoor lunchrooms are closed lunch breaks are staggered.

Effect on the labor pool

Uhland’s nursery is running on a skeleton staff — a result of his workers from Mexico being held up at the border and unable to enter the United States.

“I have not and will not be able to get any of my workforce until everything is cleared in Mexico and the U.S. No one can or will give me any time frame, including my immigration lawyer,” he says.

In the interim, he hired a couple of college students that were home from Penn State.

At Midwest Groundcovers, labor has not been severely impacted. Orum-Keller says that some workers have chosen to take leave due to coronavirus concerns but for the most part, the nursery is fully staffed.

Jones notes that H-2A visa processing seems to be taking priority over H-2B visas. While good news for the nurseries that rely on the H-2A program, the H-2B supplemental visa program is put on hold once its cap is reached. The H-2B cap for the second half of fiscal year 2020 was met on Feb. 18. That included 33,000 visas for worker petitions requesting a start date before Oct. 1, 2020. Jones says many of Manor View Farm’s landscape customers that were capped out after the first lottery do not have their H-2B crews. Those that were successful in the lottery and are able to get consulate interview waivers have started to see H-2B visa crews show up to work.

Sales and production

Manor View Farm did not have a drop in March sales to landscape contractors due to the spring season starting earlier than normal. Jones says April sales will depend on whether landscapers are allowed to continue working. There have been a few orders cancelled and some have been delayed.

Jones also says his crews are not behind in production as the season is ahead of schedule.

“Field digging of deciduous plant material is just about finished,” he says. “We are still planning to start planting once the weather cooperates.”

Orum-Keller expects lower than typical spring sales for the industry as a whole.

“Absolutely,” she says. “We expect garden centers to be most severely impacted negatively but landscapers are operating at a reduced pace — both due to their customers and employees impacted by the coronavirus — but also due to not having their workers fully staffed.”

She says Midwest is not behind in production operations but is behind in sales which has caused the company to pause some of its purchasing and potting. This type of chain reaction will be common among growers.

“We are looking at our current purchase orders for liners and are reducing some of these,” she says. “Our vendors are being flexible, and we are grateful for that.”

She also will likely postpone some potting in the near future, depending on the product and anticipation of demand as the market responds.

JLPN’s Lewis says his sales are down about 5%, but it’s not from the pandemic, but because the tree market is experiencing some oversupply. He estimates there’s a 15-20% overage in the market right now, which may decrease once the nation is on the other side of this crisis. Unlike the days during the Great Recession, he is not hearing about growers slashing prices or competing on price.

Production is going full speed at May Nursery in Havana, Florida, although the effects of the various quarantines have caused a 15% drop in sales during the last three to four weeks compared with the same time last year, reports Richard May, president and general manager.

“We’ll be closely watching the U.S. housing starts reports for the next three or four months,” he says. “If the housing numbers stay steady, we’ll be OK. If it starts a precipitous fall, then we would look to start tightening up on production.”

The supply chain situation

The COVID-19 challenge has ramifications on the supply chain, as well, even impacting the way plants are sold.

At Manor View Farm, Jones’ crew is limiting incoming delivery of plant material for the landscape distribution center to largely material that is already sold. This has created more of a “just in time” inventory system. Jones says the system reduces risk but can increase anxiety for the sales team when incoming deliveries are unexpectedly delayed. He says growers have been very understanding when they realize an entire spring order is not going to be taken in March but spread out over two or three shipments.

“Cash flow is king,” Jones says. “We need to limit the amount of unsold material sitting in the yard at any given time. Our goal is to keep cash flow fluid — if our customers keep paying us, we can keep paying our vendors. We are all in this together and our successful navigation of the current crisis will help determine the success of our customers.”

Montanez says that many of his landscape contractor customers have postponed some jobs, especially the larger companies who make their money on commercial installations. However, the smaller contractors who primarily serve the homeowner market are not only on track but taking on new customers. He expects the landscape trade to ramp back up in the summer, although that depends on the weather.

“If they wait until fall to complete landscape installs, it will cause a backlog. I think a lot of these jobs that have been postponed now will be back online in the summer,” he explains.

Loma Vista’s trucks are delivering product and simultaneously Oestmann and her team are “evaluating everything from staffing models and outdoor growing technologies to innovative software and webinar education and training. [As] a premiere grower for the Midwest marketplace, we’re looking at distribution routes and service channels for creative, cost-effective alternatives that expand on solutions we’ve already put in place.”