Slow & Steady

After several dismal selling seasons in the nursery industry, it seems some relief has finally surfaced. It’s not a total reprieve by any means, but let’s celebrate some small victories. Nursery Management surveyed growers in Ohio, Indiana, Illinois, Wisconsin, Michigan, Kentucky, West Virginia and Virginia about sales in 2012 versus last year. Thankfully, the positive results outweighed the negative ones.

The majority of those surveyed pointed to an uptick in sales. More than 40 percent of those surveyed predicted a 6-10 percent growth in sales. Close behind at 30 percent was an outlook for 1-5 percent growth. And more than 10 percent are forecasting a 21-25 percent increase in sales.

Here comes the sun
“Year to date, sales are up,” said Chad Johnson, president of Johnson’s Nursery in Menomonee Falls, Wis.

Johnson’s sells trees, shrubs, evergreens, and perennials to landscape contractors, garden centers and municipalities throughout Wisconsin.

“Of course weather is a big reason for our increased sales — obviously that helps substantially. Last year spring was three weeks behind average, and this year we’re three weeks ahead,” Johnson said.

But it’s not all about the weather, he added. There’s some commercial construction projects returning to the Milwaukee area, and the region is experiencing a small bump up in the residential market.

“And lots of plant sales have increased because many people in the area are re-investing in their current landscapes,” Johnson said.

Sales are up higher than expected at Lodi Farms in Ann Arbor, Mich., said owner Dan Riddle. Lodi operates a retail garden center, a landscape services firm and a wholesale nursery.

“Our cash and carry sales are up close to 100 percent compared to last year,” Riddle said. “And on the landscape side, by May we’ve already booked 75 percent of what we did for the entire year in 2011.”

He primarily credits great weather for the big swing in cash and carry sales.

Retail rebound
But another indicator is that homes are starting to sell again in the area. “I talked to a Realtor who said property is moving — things they thought would never sell are starting to sell,” Riddle said.

On the wholesale side, tree sales are flat, but they’re up for retail sales, he said. But he’s planning to increase container production by 20 percent primarily for his garden center and landscape sales.

Riddle is no doubt excited about the sales increases, but he’s also a bit guarded.
 

“Two years ago, we had a great April and then things tanked in May. But this year it seems things are just going to keep rolling and rolling,” he said.

At the retail store, some of Riddle’s hot sellers are ornamental pear, perennials, dogwoods and redbuds.

“The redbuds were phenomenal this year, mainly because of weather. They bloomed early and held their blooms longer,” he said.

Moderate growth
At Kankakee Nursery some 60 miles south of Chicago, sales are trending up a bit, said Steve Worth, sales manager. It’s not a huge jump in sales, but the nursery is running moderately ahead. Kankakee sells trees, shrubs, perennials and ornamental grasses primarily to landscape contractors. Sales to landscapers are still a bit sluggish – better but not huge.

“We had an early digging season, so now a more balanced supply of B&B shade trees will be available this summer, Worth said. “And we’re experiencing good prices on container shrubs.”

Natives are selling well, but the nursery continues to have some solid sales with certain landscape basics.

“We’re trying to get as many trees and liners in the ground as we can afford to,” Worth said. “The tree business looks pretty good going forward. We think the demand will stay steady and prices will firm up.”
 

 

Market shortages
The market is experiencing some shortages throughout much of the U.S.

“In our area, I’m seeing shortages in shade trees — even the most basic items like Autumn Blaze maple,” Johnson said. “And since the digging season is basically done, material that is 2-inch caliper and under will experience some shortages.”

Crops planted after the economic downturn currently fall in that size range. And since so many growers cut back what they planted post-recession, larger trees that were planted before the recession are selling, Johnson said.

“I’m also seeing more shortages in field-grown material compared to container trees,” Johnson added.

And supply and demand shifts are already raising nursery stock prices, Johnson said.

Lodi Farms’ Riddle didn’t get all the plants he wanted this year. But he waited until this year to place orders.

“Since 2005, we haven’t had to order in the fall to get stuff in spring. But that was not the case this year,” Riddle said.

The same thing happened at Johnson’s Nursery.
 

“The just-in-time delivery that people have been accustomed to for a while is not happening as much now because of the shortages, and we’ve experienced that, too. We got a little lazy with our ordering and have been ordering in spring instead of the previous fall for the last couple of years. Because of that, we weren’t able to get everything we wanted this year,” Johnson said.

Despite shortages in the Ohio market, most customers were open to buying substitutes with no arguments, said Joe Zampini of Lake County Nursery in Perry, Ohio.

“Many of our customers took whatever was available. Some because they were under the gun to get a landscape job done, and others because they were afraid they wouldn’t be able to buy anything if they held off,” Zampini said.

Lake County Nursery sells trees, shrubs, perennials, ornamental grasses and evergreens to landscapers, rewholesalers and retailers. Zampini noticed that the market is short on forsythia, cotoneaster and spirea.

“I was surprised to get calls from other nurseries looking for those plants,” he said. “There will probably be an uptick in pre-orders next year since a lot of people didn’t get exactly what they wanted this year.”

Johnson also expects pre-orders to increase for 2013 sales for liners up to finished product. But that doesn’t mean producers will go gangbusters with expansions.

“Growers are cautious to expand because they’ve been hit so hard in the last four years, so they’re hesitant to bump up their numbers too much,” Johnson said.