2018 Grower Survey: Looking back. And ahead.
Sales and profit margins rose for most growers in 2017. Energy and labour are poised to take top spots once again as the most costly inputs for 2018.
Comparing across last year’s survey results, 2017 may not have been as profitable, but a good year like 2016 can be hard to follow – especially with big changes afoot.
Who filled out the survey?
A fairly even mixture of growers in wholesale (35%), retail (24%) and vegetable (32%). Most responses came from Ontario (50%), followed by Alberta (13.8%) and British Columbia (12.1%).
Most operations continue to be under 50,000 sq. ft. (40%). But where the 2017 survey found an almost even distribution of operations from 50,000 to over one million sq. ft., this year’s responses saw a shift towards smaller operations under 350,000 sq. ft.
What’s being grown?
Top five for floriculture:
- Ornamental bedding plants (52.7%)
- Flowering potted plants (52.7%)
- Perennials (43.2%)
- Plugs and propagation material (30.0%)
- Tropicals (25.0%)
Top five for vegetables:
- Tomatoes (72.5%)
- Peppers (70.0%)
- Cucumbers (67.5%)
- Herbs (67.5%)
- Leafy greens (52.5%).
- Notable mention: strawberries (37.5%)
Where’s it all going?
The majority are meant for:
- Wholesalers/distributors (39.7%)
- Farmers markets (37.9%)
- Supermarkets/grocery stores (31.0%)
- Own retail shops (31.0%)
Merchandisers/box stores and independent garden centres were at 22.4% each.
How were sales in 2017?
72% reached sales volumes of over $50,000. Compared to 2016, sales rose for 49% of surveyed growers by less than five per cent (21%), five to 10 per cent (14%) or more than 10 per cent (14%).
How does this compare when you factor in operating costs and inputs? 76% of growers made a profit, with 64% rounding out the year at a five per cent margin or higher.
We looked at changes in insect and disease pressure, divided by season:
- Early (January to March)
- Spring (April to June)
- Summer (July to September)
- Fall (October to December)
More than half experienced no changes in insect pest pressure (51 to 63%) across the board, and some noted it was better than 2016 (23 to 38%).
Similarly for disease pressure, the majority saw no changes across the four seasons (53 to 64%). The rest were almost equally split between “better” or “worse” than 2016.
Trying something new.
About 21% use hydroponics, 17% use LED lighting and 14% hold organic certifications. Biocontrols continue to be popular, as 32% of surveyed growers increased their use in 2017 and 42% opted to stay at their 2016 use levels.
Which input costs rose the most in 2017?
With changes in labour laws and rise in minimum wages, labour came in first place with 37.5% of the votes. Heating was the runner-up at 25%.
But regardless of costs, helping hands are always needed in the greenhouse. 50% of respondents expect the size of their labour force to remain the same for 2018, with 38% expecting to employ more. Only 24% hire off-shore workers – domestic labour was still in demand.
Looking ahead to 2018.
Unsurprisingly, there are no plans to reduce prices. Growers are either looking to maintain prices (25%), increase prices by less than five per cent (43%), or raise them by more than five per cent (32%).
Forecasts for sales volumes are somewhat positive, with only 7% of surveyed growers predicting lower sales in 2018. 54% look forward to higher sales volumes and 39% expect no change.
Plans to expand or invest in 2018?
Similar to previous years, the vast majority have no plans to expand their operations (72%). A few are looking to increase their operational area by less than 10,000 sq. ft. (19.3%).
Investing in new equipment is a different story, however. 73.7% are looking to spend anywhere from less than $1,000 to over $100,000 in 2018.
Top business threats in the next three to five years?
The biggest named threat by far was taxes/regulations (63.2%), which included permits, property and wage increases. Energy costs came in close second (59.6%), with labour shortages (including lack of skilled labour) and markets/prices tied for third (47.4%).
Thank you to all growers who completed the survey. Your help is very much appreciated.