Another Take On The Live Goods Market
We took a look at live goods buying habits with Express Seed general manager Dave Watt last week.
January 23, 2009
We took a look at live goods buying habits with Express Seed general manager Dave Watt last weeek. This week, we caught up with Menachem Ganon, vice president of international business for McGregor Plant Sales, who offered his own thoughts on the live goods market and some insightful approaches growers should be taking.
What has been happening with orders as spring approaches?
"There is an increasing amount of last-minute changes with additions and deletions. It is critical to be working with producers and suppliers that give you easy access to confirmed orders so you can stay on top of what is scheduled. Surprises cost money. Smart buyers lock in orders early with conservative estimates on what they think they will need. This way, they can ensure production schedules start on the right weeks. Typically, when they get within four weeks of the delivery date, they amend the orders as needed.
"As spring gets closer, we are moving toward the quick-turn crops like herbs and coleus. We'll also start to see some speculation orders begin to arrive for particular growth or special interest segments.
"Lastly, growers will be filling out partial boxes with new material for performance evaluation. They want to see how the new genetics will perform in season and this is the time."
Are certain products creating more issues than others?
"The long crops - orchids, bromeliads, nursery stock - are a bad idea right now. All of this is tying up cash for a long time and in a tough economy, cash is king. Growers are migrating from these items for consumer interest reasons as well. Landscape is down and expensive house plants are not as popular today."
What strategies do you recommend for growers looking to get more bang for their buck?
"Growers absolutely need to stay on top of the improvements in genetics. Labor is almost always the highest production cost in a greenhouse and today. For example, you can grow Kientzler's new Nino New Guinea impatiens now, and they require no pinching labor and no plant growth regulator application labor. They also finish up to three weeks faster so other labor management practices are cut by 25 to 30 percent.
"There are significant savings opportunities for growers when they change their plant start forms. Many costly tissue culture items such as heuchera can be purchased as URC for dramatically less prices and faster, easier production.
"Another example is bare root grasses that can be purchased for prices that are less than liners - and you get freight efficiencies, too. In some cases, we've seen growers getting another dollar per pot in profit on their gallon production of grasses. There are a lot of opportunities to save by making better selections of plants that fit your needs. Your broker must be able to recommend items to you on criteria such as lower freight, lower temperature, lower light and lower labor. They should also be able to recommend complimentary plants to fill out partially utilized greenhouses or to sensibly round out a new retail program."
What are some common mistakes you see growers making?
"Growers who do not trial new items end up at a disadvantage down the line. The better growers not only trial new items, they give their customers a chance to see what's coming and partner with them in decision making for next season.
"Over the last five years the biggest mistake I saw was watching growers get overleveraged with too few customers. They lost pricing and terms as a result. You absolutely need a broad enough customer base to protect your business. One decision from a new buyer who has no relationship with you can cost you your entire business. That's ridiculous if you stand back and look at it. Talented growers are out of business today because of this one fact. It's very sad."
What are the "smart" growers doing?
"I can tell you they are listening. They are externally focused. They are clever. They negotiate value, grow value and sell value. They are on a journey of continuous improvement. It is difficult to benchmark the best today because they will be producing differently tomorrow. The smart growers are hunting for better ideas and better people all the time.
"Everyone makes mistakes. Smarter growers tend to understand taking a risk is not gambling. A risk is something you can try and if it does not work, you can roll back to an existing position. A gamble does not afford a roll back to a sustainable position.
"Another trait of the smart grower is that he or she is in a network with other growers. This is a unique industry in that regard. You can get help in forms of co-ops, alliances and joint projects that give you some economy of scale. The trick is not getting over committed to something that takes away time and resources inefficiently."