Inside View: Local angle will fuel industry’s new growth

February 04, 2009
Written by Gary Jones
here’s another year over and a new one just begun.” So, how does ’09 shape up on the back of 2008? The industry faces a number of issues, in particular:

• Labour.
• Energy.
• Trade.

Employment: Finding suitable labour has been a problem for the greenhouse sector globally for some time. Just ask any European grower! In British Columbia, recruiting foreign workers is one option, if you’re up to incurring associated housing costs for seasonal migrant workers. Alternatively, some growers like Darvonda Greenhouses, in Langley, have invested heavily in mechanization and technology. Carousel watering systems and effective warehousing facilities make production and shipping more efficient. (Incidentally, if thinking of capital purchases, talk to an independent financier who knows the industry – he probably has great insight to share.) But Darvonda’s commitment to its employees through fantastic staff catering facilities and a high grade employee gym shows how some employers are tackling labour issues creatively.

Energy: This is another continual dilemma. In just 12 months, oil prices peaked at all-time highs, then fell to extreme lows. However, the overall trend for energy demand and costs will likely continue “onward and upward.” With new air emission standards agreed by all stakeholders in B.C., another enterprising Langley grower recently received his first consignment of pine-beetle wood to heat new vegetable crops. Huge thanks to the B.C. Greenhouse Growers Association (BCGGA) and the United Flower Growers (UFG) who worked tirelessly with producers and government on resolving air quality standards.

Trade: A two-part story – losing value and adding value.

Step one – not losing value. Not long ago, we debated the effects of parity between the loonie and the greenback (‘Inside View’, November ’07). Now it’s back down to around 80 cents to the U.S. dollar.

A strong Canadian dollar a year ago had residual effects on some producers. Eric Voogt at Westcan Greenhouses, in Langley, recognized for his outstanding commitment to quality and his terrific spring/summer bedding and Christmas poinsettia trials, is a good example. Twelve months ago, Westcan was dependent on significant U.S. sales. But quoting prices a year ahead of deliveries and roller-coaster loonie values produced huge challenges. Similar (or higher!) production costs, coupled with a significant slowdown in the number of new introductions from breeders, means Eric has decided to make ’08’s poinsettia open house the last “annual” event. From now on, they’ll be in alternate years. (Thanks to David Schmidt – the first recipient of BCGGA’s “Communicator of the Year” – for reporting this.)
   

Step two – “adding value.” New products (be they plant material or other goods/services), new packaging and simply being proactive with customer care are essential to stay afloat. Growers, especially of ornamentals, will need to “ramp up” this department in 2009. For growers of edibles, the trump card of “buy local” may help head off increasing foreign production. For example, while the Canadian greenhouse tomato industry has hovered around the mid-400-hectare level over the last four to five years, similar Mexican production went from about 200 hectares five years ago to nearly 800 hectares in ’07. Differentiating Canadian greenhouse product therefore requires significant attention.

OTHER POTENTIAL ISSUES
Carbon tax, water availability, unpredictable Canadian weather affecting consumer buying patterns, new pests (Chile thrips came in ’08 – what’s next?) and effects of a real (or “induced”) recession may set new challenges for ’09.

STAYING POSITIVE
But all is not gloom. While the particulate emissions legislation may be seen by some as a loss (compared to the status quo at least), the process itself should be seen as a positive step in the relationship between growers, producer associations and the provincial government.

Despite talk of recession, the Canadian economy has been faring better than most in the “G8.” Once we finally establish/finalize a federal government(!), we’ll be in a good position to move forward. Even if a recession does bite, ornamental producers may see more people taking “staycations” and “doing-up” their yards (and eating local food!).

The industry has a terrific product (whether edible or ornamental), fresh and locally grown. Consumers are increasingly conscious of the origins of what they purchase and this puts Canadian growers in strong shape for ’09.

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