I received this from an industry contact who preferred to remain anonymous, but agreed to let me share this on Making Cents. They make some excellent points regarding the availability turnaround that has occurred in the industry (from oversupply to shortages) and regarding plant quality.
Over the last two plus years I have purchased from 65 nurseries and toured about 130 nurseries. I talk with plant brokers, propagators, and other nurserymen about plant availability, quality, and pricing in the market. I also attend several trade shows during the year. Geographically I am in contact with California, Oregon, Florida, Georgia, Alabama, Mississippi, Louisiana, Texas, Oklahoma, Tennessee, South Carolina, North Carolina, Virginia, and Maryland.
In general, plant availability is greatly reduced going into 2011 from 2010 levels. I have already seen this shortage on some items start this fall of 2010. Locating material to book for 2011 is more challenging. Plant quality may be in even greater decline. With the decline in plant numbers and quality, pricing is starting to go up. The rise in pricing will contribute to the shortage of plants available in the short term.
Plant availability across the industry has reduced for several reasons. Nurseries, from large to small facilities, are going out of business altogether. The ones that remain have planted smaller crops or no crop at all during 2010. I have not toured a nursery that has a larger or equal quantity of inventory at this point compared to last year. At best an individual nursery is down 30% in inventory numbers. Some are down 80%. This range holds true across those growers that are still operating. Many plants have remained on the growing location too long and have passed salable quality. Dumping significant numbers of old material has been common in 2010. In some cases the nursery did not have the labor remaining to dump the plants and have simply turned off the water. Those plants are dead in the growing space. In several nurseries small areas of ground cloth have been removed and vegetable gardens now occupy that irrigated space. Nurseries that specialize in propagating and selling liners are reporting lower than expected orders for material to be delivered in the 2011 planting season. This will contribute to a possible continuation of the shortage well into 2012.
Plant quality is of a bigger concern. Plants have been held too long in hopes of making a sale at some point in the future. Those plants are no longer viable for the retail trade and in many cases simply need to be dumped. Some growers have planted, yet not fertilized for various reasons ranging from lack of labor to put the fertilizer out to not having the money available to buy the fertilizer. Those plants will not be ready for sale in spring of 2011. Older and unfertilized plant material will result in fewer plants that can be purchased for 2011 retail sales. In one case the plants have been fertilized with chicken manure. This may result in additional weed pressure and an unpleasant odor. Speaking of weeds, they are abundant in many nurseries. Some plants cannot be purchased due to the overwhelming weed pressure at the grower. Again, lack of labor and money to hand weed and or put out herbicide.
Some growers whom are sensing the shortage are already quoting higher pricing. This phenomenon is beginning to spread. In recent weeks I have visited several nurseries that now have no hired labor and only the principles remain.
“I am not going to plant anything until I see the market turn.”
“We are not going to spend the money to fertilize until someone orders the plants.”
“I need several days notice to load a truck so that I can find some help, we do not have any labor left.”
“I am sorry for the weeds, we just do not have the labor or money to take care of them”
“We are too late planting anything this year and as a result will be basically out of salable plants during 2011”
“I went out to tour some of my plant sources and the first three I tried to tour were all closed and out of business.”
These quotes and more are quite common this day and age. I have no doubt that in 2011 there will be plant shortages. Some plants may not be found at all and some we may have temporary outages. Prices are going to go up.
Greetings, I enjoy hearing perspectives from different quarters. I think from reading your most recent blog posting that there are huge regional differences on this front however. I will make candid comments but they too are not for attribution. In the Northeast we are still seeing surpluses in many cases. Growers have dropped minimum orders almost without exception. Orders were going out in 24-48 hours in some cases even if it meant sending a partially empty truck (maybe so the buyer does not have a chance to change their mind?). Growers will “meet or beat” not only a competitor’s prices, but their specials too. While availability is an issue on a handful of items, most salespeople will concede that there is realistically no need to pre-order, it will be there. Pre-books are down to the point that some major players may have financing problems. Prices may be going up, but from what I am seeing it is only the list price, and not the real world price that is actually paid.
While I can’t attest to the current quality of the material, there’s a major national nursery that is seeking to increase pre-season bookings to the tune of $20 million between now and January 31. They’ve got facilities in multiple locations around the U.S. and a full palette of plant varieties. I am aware of several other big nurseries that are taking it on the chin right now due to changing purchasing strategies from a significant box store chain. That said, I do agree that spot shortages will crop up where trucking/shipping limitations preclude cost-effective transfers of plants in areas of major surplus in supply to areas of major demand…despite the shift from b&b to container production. Such are the shortcomings of anyone in this industry trying to identify definitive “industry trends” vs. projection of micro-to-macro, even as travelled as the anonymous writer has been. FWIW, I believe our industry still has miles and miles to go in resolving even some fundamental components of logistics, distribution and packaging.