Nursery sales jump for the 9th straight year

When the Oregon Agricultural Statistics Service announces this week that the state's nursery and greenhouse gross sales were $584 million in 1999, up 10 percent from 1998's record year of $532 million, the industry wasn't surprised.

Rather, the increase in sales, which has happened for nine consecutive years and is expected to continue in 2000, had leaders cautioning fellow farmers, desperately seeking ways out from under depressing commodity prices, before joining the parade.

As astounding as this nursery machine's been, its gotten to the point where some nurseries are cooling their jets. The inevitable downturn – or even leveling off – has to be near, industry representatives keep telling themselves.

"A lot of the major nurseries are saying, 'This is it (in terms of expanding their business). How much more do I really want to work?' said Dan Wells, owner of D. Wells Nursery in Hubbard and president of the Oregon Association of Nurserymen. "I'm going to be at that point pretty soon.

"I've been hearing a lot of different stories from salesmen, brokers and wholesalers; that the industry is long on certain products and short on others. I don't know which way to take it anymore. We're not sold out, but sales are up."

John Aguirre, Oregon Association of Nurserymen executive director, said it's a "watershed period" for the industry.

Marketing
"Without question, the great majority of people are having to cope with the question: "Do I want to expand?" Aguirre said. "We're sitting here fat and happy, but does that mean we're prepared for a downturn in the market?"

Aguirre said several factors play into the expansion picture, including high fuel costs, how to finance the expansion, growth of the industry in other regions and the number of new growers joining the industry.

With more plants being produced and established businesses in the industry, it'll be more difficult for start-up nurseries to tap into the market, Wells said.

"Anybody can grow the stuff, but can you market it and get paid for it? That's the key and what I caution people about," Wells said. "It's also getting to be a real quality issue now with lots of plants around. I've been doing this for 18 years, and I'm still learning something every day about growing better plants."

Nationwide trends
But the downward trend likely won't happen in 2000. Nursery after nursery is reporting yet another increase in sales, prompting some to believe the $600 million mark will be topped.

"Everybody got on the bandwagon this year and bought early because there were shortages," Wells said.

Hines Horticulture's sales for August were $18.5 million, compared with $13.5 million in August 1999, an increase of more than 37 percent The green goods business benefited from strong performances in both the nursery and color divisions. Strong results in all parts of the country were driven largely by store service programs with big box retailers.

Texas-based Calloway's Nursery reported a 52% increase in earnings on a 38% sales increase during its third quarter - the most profitable quarter in its history. All sectors of the industry are sizzling, including suppliers. Sales of horticultural products were up during the second quarter for North America Horticultural Supply Association distributors (9.2%) and manufacturers (6.3%).

Wells said the drought the East Coast suffered two years ago has fueled his sales this year.