On the rebound

Published May 20, 2016

In late December, the industry received a bit of good news from the U.S. Department of Agriculture (USDA). The department’s National Agricultural Statistics Service (NASS) revealed stats from the 2014 Census of Horticultural Specialties report, which shows that horticulture operations sold a total of $13.8 billion in floriculture, nursery and specialty crops in 2014, up 18 percent since 2009. The number of horticulture operations in the United States increased 8 percent during this time to 23,221.

Top crops

The top commodities sold in 2014, and compared to 2009, were:

Nursery stock, $4.27 billion combined wholesale and retail sales, up 11 percent
Annual bedding/garden plants, $2.57 billion combined wholesale and retail sales, up 11 percent
Sod, sprigs and plugs, $1.14 billion combined wholesale and retail sales, up 30 percent
Potted flowering plants, $1.08 billion combined wholesale and retail sales, up 24 percent
Potted herbaceous perennials, $945 million combined wholesale and retail sales, up 12 percent
Food crops under protection, $797 million combined wholesale and retail sales, up 44 percent

“Because horticulture production is becoming more diverse in the United States, NASS worked with key stakeholders to ensure the 2014 Census of Horticultural Specialties would meet the needs of growers, industry leaders, and policymakers,” says Chairman of the Agricultural Statistics Board Mark Harris. “We added 60 new items to the questionnaire to provide the most up-to-date assessment of current industry trends, including items like peonies, lavender, rudbeckia, cacti and succulents.”

Within the nursery stock category, the top five crops based on total sales were:

Broadleaf evergreens, $807 million
Fruit and nut plants, $755 million
Deciduous shrubs, $677 million
Coniferous evergreens, $568 million
Deciduous shade trees, $562 million

For bedding plant sales, some of the top choices based on total sales were:

Petunias, $263 million
Geraniums (from seeds and plugs), $224 million
Pansies/violas, $186 million
Begonias, $133 million
Impatiens (I. walleriana), $115 million

State of the industry

With the economy on the mend, growers buckle down for some smarter growth.

The industry learned some tough lessons during the Great Recession. With an eye on progress in 2016, growers are using hindsight to make additional and necessary changes to protect against the next downturn. In the fall of 2015, Nursery Management and Greenhouse Management magazines surveyed readers to gauge the state of the industry. The results were quite encouraging, and point to continued growth in the market. Here are some highlights.

Sales & profits: Some 61 percent of nursery growers reported that sales increased in 2015 over 2014, and 65 percent anticipate an increase in 2016. On the greenhouse side, 66 percent expected 2015 sales to be higher than 2014.

In the nursery market, 76 percent turned a profit in 2015, with 50 percent in the double digits, and profits increased this year compared with last year for 51 percent of respondents, while 26 percent experienced no change. More than half (53 percent) said they anticipate an increase in profits in 2016, and 41 percent think profits will remain flat next year. In the greenhouse market, 52 percent expect net profit to increase in 2016 compared with 2015, while 42 percent expect profits to remain the same.

Production: Nearly three quarters of nursery respondents (71 percent) did not change production acreage in 2015 compared with 2014. Only 6 percent decreased production acreage and 23 percent added some. With interest rates still at an all-time low and continued crop shortages, 30 percent plan to increase production acreage in 2016, while 65 percent are planning no change.

Nursery owners also identified new crop categories they plan to grow in 2016. Ranked from highest to lowest, those crops are: drought-tolerant plants, natives, edibles, legal/medical marijuana and “other,” which included conifers and wetlands plants.

When asked, “Which of these categories does your greenhouse plan to increase production of in 2016?” greenhouse owners revealed: perennials 30 percent; annuals/bedding color 25 percent; edible crop transplants 25 percent; herb plants 24 percent; succulents 18 percent; potted flowering plants 17 percent; finished produce 12 percent; indoor foliage plants 8 percent; and cut flowers 3 percent.

Concerns: When it comes to what keep growers up at night, the nursery respondents said the three greatest problems facing the industry were labor, economy and weather. Increased expenses and government regulations rounded out the top five. Greenhouse participants identified economy, increasing input costs, finding qualified labor, weather, and a declining customer base as their biggest challenges.

To see the entire report for the nursery market, visit http://bit.ly/NM-SOI; and for all the details on the greenhouse market, please go to http://bit.ly/GM-SOI.

More than plants

Other key findings from the 2014 Census of Horticultural Specialties report include:

Family- or individually-owned operations made up the largest number operations, accounting for 53 percent, but corporately owned operations accounted for 76 percent of sales ($10.5 billion).
Total industry expenses were up 16 percent since 2009, with labor being the largest, accounting for 37 percent of total expenses in 2014.
Food crops grown under cover gained in prominence as the number of operations engaged in this practice increased 71 percent to 2,521.

Labor costs ranking as the largest expense is certainly no surprise to the industry. But as the labor pool shrinks and gets more expensive, it will continue to affect profits.

For more: View the entire census report at http://1.usa.gov/1SgqHMl

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