New York, NY (PRWEB) January 31, 2014 -- The Plant and Flower Growing industry has fared poorly in the five years to 2014. The influx of cheaply cut flower imports from Colombia and Ecuador has had a staggering negative effect on domestic farmers, decreasing industry revenue at an average annual rate of 1.0% to $14.9 billion in the five years to 2014. Furthermore, drought conditions in the United States in 2012 harmed industry harvest volume and product quality, encouraging an inflow of imports.
According to IBISWorld Industry Analyst Antal Neville, “In the five years to 2014, the number of establishments is anticipated to fall at an average annual rate of 1.2% to 44,955, reflecting the industry's myriad struggles.” For example, the recession tightened the purse strings of US consumers, and highly discretionary products such as flowers and nursery plants have suffered from plummeting demand. Additionally, large retailers such as Walmart and Safeway have taken over a substantial portion of the retail market for flowers and nursery items; these stores have the power to set low prices, forcing growers' rates to drop. Also, improvements in transportation have allowed large farms, which can afford to ship items cross-country, to establish themselves as the main suppliers to buyers nationwide. These large retailers offer better prices and greater product variety than their smaller competitors.
In 2014, IBISWorld expects that industry revenue will decline 2.1%, hampered by weak demand from florists and nurseries and by import competition. While the overall US economy is no longer in a recession, weak discretionary spending will continue to strain flower sales throughout the year. It is not likely that government support programs will aid this farming industry because, unlike food, flowers and nursery plants are discretionary goods. Furthermore, cheap imports allow Americans to purchase flowers at a lower price, causing demand for domestic products to diminish even further.
Through 2019, IBISWorld forecasts that revenue will continue to rebound slightly. “Duty-free imports from South American countries will continue to infiltrate the market, while the domestic industry will struggle to remain on the map due to intense price competition,” says Neville. Genetically modified plant seeds may be the lifesaver this industry needs; however, current opposition to the movement leaves the industry's future uncertain.
As an agricultural industry, nursery and floriculture production has a low level of ownership concentration. The industry consists of national, regional and local nursery businesses. However, small, family-run operations dominate the industry. In terms of employment distribution, the industry is characterized by the presence of many farms that employ small permanent staff. Producers typically only supplement their own labor and their small full-time staff with seasonal hired labor.
For more information, visit IBISWorld’s Plant and Flower Growing in the US industry report page.
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IBISWorld industry Report Key Topics
Establishments in the Plant and Flower Growing industry grow nursery plants, such as trees and shrubs; flowering plants, such as foliage plants, cut flowers, flower seeds and ornamentals; and short rotation woody trees, such as Christmas trees and cottonwoods. These plants can either be grown under cover or in an open field.
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About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
Gavin Smith, IBISWorld Inc., http://www.ibisworld.com, +1 (310) 866-5042, [email protected]
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