Market outlook: expect strong demand, material shortages
Left to right: Todd Gentry, Timothee Sallin and Chloe Gentry are part of Cherrylake’s leadership team.
Carlos Amoeodo

Market outlook: expect strong demand, material shortages

Cherrylake's co-CEO says trees and ornamentals will be in short supply in 2021 and the foreseeable future.

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Timothee Sallin, Cherrylake co-CEO, recently wrote a market update for the state of ornamental trees and shrubs in spring 2021.

In the update, Sallin covers impacts of winter storms and COVID-19 on supply and demand for nursery plant material. He also uses new housing start statistics to forecast the demand for ornamental trees and plants. We've included a portion of the article below, but for the full picture, visit Cherrylake's website.

Sallin writes:

The availability of ornamental trees and nursery plants for landscape and retail markets in Texas and the Southeast United States will continue to be in short supply in 2021 and for the foreseeable future. There will likely be an acute shortage in the Spring of 2021 due to the sudden and unexpected reduction in supply and a likely increase in demand resulting from the Texas freeze. While the freeze is anticipated to have a significant impact on availability in the months ahead, the industry was already in a shortage situation prior to this event. Long-term economic fundamentals and demographic trends have been driving an increase in demand for ornamental trees and plants over the past decade. The global pandemic has led to a more recent surge in home gardening and landscaping, adding significant demand to the market. Meanwhile, nursery inventories have not kept up with these increases in demand due to various factors, including rising input costs, labor challenges, increased risk of natural disasters, insufficient new investment, and farm succession issues.

The Texas Freeze

The winter outbreak during Valentine’s Week 2021 brought not only snow, sleet, and freezing rain to Texas but also extreme cold temperatures lasting for several days. This was one of the most impactful winter events in recent history, bringing multi-day road closures, power outages, loss of heat, broken pipes, and other societal impacts for the region. While the damage is still being assessed, this will likely go down as the most costly weather disaster for the state of Texas in history, surpassing even Hurricane Harvey from 2017.

Temperatures in Dallas/Fort Worth reached minus 2 degrees Fahrenheit, the coldest recorded temperature for the area since December 1949.

Texas is both a major producer and consumer of ornamental trees and plants. The impact of the freeze will likely be twofold, affecting both sides of the supply and demand equation. On one side, a spike in demand for landscape material is expected as property owners seek to replace a substantial amount of cold sensitive trees, palms, shrubs, and tropical materials which froze in the landscape. On the other side, nurseries and tree farms in Texas have likely lost a significant amount of inventory to the freeze, and they will need to rehabilitate cold damaged material prior to shipment, resulting in a lower supply of plant material available.

It is difficult to assess how these impacts will be felt, as well as how deep and long lasting they will be. Many of Texas’ tree farms are located in the Northeast region near Dallas, where freeze temperatures were particularly extreme. While it is almost certain cold sensitive tree varieties, such as ElaeocarpusPodocarpus, and Ligustrums, will be severely impacted, it is less clear how cold tolerant species such as live oaks will fare in the coming weeks and months. Shrubs, palms, and tropical plants were likely the most affected items in the landscape, and early indications point to pervasive major losses throughout the landscape as a whole. Significant shipments of replacement material have already been shipped to Texas in the past few weeks.

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