From the Editor: May 2013

April 30, 2013
Written by
Was 2012 was a better year than the previous year for growers? What were they saying in coffee shops or at trade shows last year?
On the flower side, you’d probably receive a “yes” to the opening question. It was a decent spring for bedding plants and containers last year, and the fall wasn’t too shabby, right through to the festive poinsettia season.

For vegetable growers, prices could have been a lot healthier in 2012. To the initial question, then, many veg growers would say “no.” Hopefully prices this year will return to more normal levels.

We used our second annual Grower Survey to better gauge the pulse of the industry. It was conducted throughout January and asked respondents to review 2012.

We can’t claim this to be a scientific study, but more a snapshot of conditions as those taking the time to answer the survey saw them. Most of the respondents tended to be smaller growers in size and sales volumes, so the responses will reflect that point of view.

Were there any survey surprises? Yes, and a big one. Despite the lowest natural gas prices in several years, energy issues remain front and centre with most growers. We would never have predicted that. However, with energy a major expense, it will always be topical regardless of fuel prices.

Some 56 per cent of respondents said they were “somewhat” concerned about energy costs, and another 33 per cent said they were “very concerned.”

But overall, the survey reflected industry confidence with improved pricing expectations for 2013 and some expansion plans (mostly modest in scope, but a few major projects).

Overall, about half the growers said they had better sales in 2012 compared to 2011, while slightly more than a quarter had comparable sales judged year-to-year. Just under a quarter said sales were down in 2012, including 10 per cent with sales declines of more than 10 per cent.

Did anything scare us with the responses? Yes, and big time. Some 19 per cent of growers didn’t know their profit margins for 2012. Let’s assume it was a case of not having all the sales receipts in at the time, because knowing those margins is critically important for decision-making.

On the positive side, some 21 per cent of respondents had margins of between five and 10 per cent, and 18 per cent enjoyed margins of greater than 20 per cent. Some 16 per cent enjoyed margins of between 11 and 19 per cent.

Respondents were cautious with market expectations. About 44 per cent anticipated no increases this year, while 31 per cent are opting for increases of less than five per cent. Only five per cent were planning hikes of greater than 10 per cent.

However, they were far more confident in their sales volumes for 2013, with more than half expecting higher sales than in 2012.
Enjoy this year’s survey, and see where you fit in with the results. Are you ahead of the pack, running in the thick of things, or nipping at their heels?

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