Perspective: Barry Sturdivant, Bank Of The West

Perspective: Barry Sturdivant, Bank Of The West

What’s the best way to describe the financial health of the commercial greenhouse industry these days? According to Bank of the West’s Barry Sturdivant, our industry’s financial health as a whole is “very good.”

At Bank of the West, the country’s third-largest bank for agricultural production, Sturdivant has seen just about every agricultural commodity encounter stress over the last two years. But the commercial greenhouse industry, perhaps to your surprise, has been a bright spot–at least for the bank. In fact, Bank of the West has identified greenhouse operations as a key area for expected growth this year.

Recently, we caught up with Sturdivant to get his perspective on how greenhouse growers are faring compared to nursery producers, what he expects for our industry in 2011 and more.

GG: How does the greenhouse industry’s financial health compare to the state of the nursery industry’s?

BS: For the past few years, commercial greenhouse growers and commercial nursery growers have gone in two different directions. Nurseries have a much higher dependence upon new housing and commercial real estate development. In fact, many historically sold only to landscapers and developers–two sectors obviously experiencing difficulty. There was a tremendous oversupply of shrub and tree inventory the past two years, which depressed prices and accelerated the downward spiral for an industry already hurting. Most of the survivors are trying to “right size” and find new customers. Any grower of long-cycle material has experienced some degree of stress related to the economy. That has not been true of the greenhouse industry.

As I walk greenhouses around the country, I am seeing more and more gallon-sized perennials, roses, hydrangeas, flowering vines and small woody ornamentals. This can’t be helpful to the shrub growers who have historically supplied similar material.

GG: Because of the industry picture you just painted, what do you envision developing in 2011 on the financial front?

BS: In 2011, I expect to see more consolidation in the greenhouse industry. This will be mainly in response to the big box stores continuing to limit the number of their vendors and asking more of their primary suppliers. We expect to see the larger greenhouse growers continue expanding. Some will do this through acquisitions, but for the most part we expect the growth to come from on-site expansions. As an alternative to consolidation, some operations will seek more contract growers to supply the needed plant material. Of course, this means some operations will have to convert from direct suppliers to contract growing for the growers that still have the relationships with their customers. However, we expect to see very few greenhouse operators close their doors in the coming year.

Many nurseries will have another mediocre year in 2011. While we believe it will be much better than the prior two years, they need a good year to get back on track. Some will probably have to liquidate in the coming year. It is still unclear whether there is an oversupply or undersupply of material in several size categories. Many in the industry believe a perceived shortage will bring prices back to historic levels. Others believe there continues to be an oversupply and prices will continue to be low, hurting profits and cash flow. They will continue to seek new markets for their plant material and to find ways to cut costs.

GG: In 2011, do you envision growers having more access, less access or about the same amount of access to credit as last year?

BS: Growers will have more access to credit in 2011. After two years of timidity, banks are once again seeking to build loan volume. They have already recognized their loan losses and are ready to get back to business. Bank of the West, which has the only office dedicated to this industry on a national basis, is very interested in extending credit to greenhouse growers.

GG: Any thoughts on the U.S. economy in 2011? Do you expect improvement, more of the same or something else to take place?

BS: I believe the economy will be mixed. People who have retained their jobs will start spending more, but unemployment will remain high and that will limit the recovery. Housing starts, while improved from the trough of the past two years, will remain at historically low levels not perceived before 2008. Greenhouses should continue to do well in spite of the economy, but nurseries will have to continue to find new markets and keep costs under tight control.

GG: From your point of view, what should greenhouse and nursery growers be doing to put themselves in better states financially?

BS: They need to build working capital and watch their cash. One of the surprising, but very positive, things about the good spring in 2009 was the fact that most greenhouse growers were determined to hang onto their money. The temptation was strong to add greenhouse acres and invest in automation, but most realized that given the current economy and banking environment it was important to have more of a cash cushion to ensure they got through the next spring. Running out of cash during the shipping season is a bigger concern for nurseries and greenhouses than sustaining an operating loss.

Inventory control is also a huge factor for both nurseries and greenhouses. In fact, in our experience this is often the reason both nurseries and greenhouses get into serious financial difficulty. Greenhouse growers have to be careful not to overinvest in speculative inventory late in the spring shipping season.

Shrub and tree nursery operators have their own set of inventory challenges. Excess supply has reduced their selling prices and they are still finding themselves with excess material that continues to absorb cultural costs. It can be difficult to decide whether to destroy the inventory or hold it for next spring’s sales. There have also been several incidents where nursery operators couldn’t resist the urge to buy in long-cycle plant material at a low cost without being able to move it when expected. The bargain they thought they had created critical cash shortages, which threatened the existence of their company.

Leave a Reply

More From Finance/Operations...
Delphinium 'Guardian Lavender' (Kieft Seed)

October 7, 2015

National Garden Bureau Names Four Crops For 2016 “Year Of The” Program

The National Garden Bureau announced four crop selections for its 2016 "Year Of The" program. New this year is the addition of a bulb crop class and a video created especially for the edibles class.

Read More

October 7, 2015

Ball FloraPlant Eliminates Neonicotinoid Use On Its Offshore Cuttings Farms

Ball FloraPlant has announced its offshore cuttings farms did not use neonicotinoid-based pest management chemicals during its spring crop production last shipping season, and will continue to be neonic free this year. Instead, the company and its greenhouse managers have relied on alternative means to supply insect-free cuttings to its global customer base.

Read More
Nemasys And Millenium Beneficial Nematodes from BASFm_Nematodes

October 7, 2015

How BASF’s UK Biological Production Facility Expansion Affects U.S. Growers

BASF has expanded its biologicals production facility in Littlehampton, UK. The new capacity increases the company’s ability to double the production of beneficial nematodes and inoculants.

Read More
Latest Stories

October 5, 2015

Smart Business Sense At Tidal Creek Growers Yields Succ…

Tidal Creek Growers stays competitive by focusing on what really turns a profit. It helps the large operation successfully balance contract growing with growing for retail garden centers.

Read More

October 4, 2015

ePlantSource Adds 5 New Partner Companies

ePlantSource has announced an additional five companies that have been added to its partner distribution list. Not only do the additional partners offer more supplier options to ePlantSource customers, but the website now also provides a more diverse product list with the addition of bulbs, clematis and many new varieties. New partners added for the 2015 – 2016 season: A.D.R. Bulbs Lennon Farm Greenhouses Micandy Gardens Pacific Growers Roseville Farms “We make it a priority to respond to our customers, and we have had many requests for additional options and a more diverse product line, so we are continually evaluating suppliers that work well with our non-traditional approach to the sale of live goods,” says Gary Falkenstein, President and CEO of ePlantSource. “We feel that it is good for our company, our customers and the industry as a whole to keep looking forward and seeing how we can improve and expand how […]

Read More
Cannabis marijuana

September 8, 2015

Supplemental Lighting Benefits For Growing Cannabis In …

The cannabis industry has moved out of the basement and into the light, and with this shift in politics and regulation occurring worldwide there is a need for growers to change the way they think about lighting and energy consumption.

Read More

September 2, 2015

Delegation Is Key To A Successful Greenhouse Operation

In a packed room at Cultivate’15, speaker Bernie Erven presented key steps growers need to take to improve their delegation skills, the benefits of delegating and the dangers of not learning how to delegate. This is a skill, he says, that everyone needs to learn. “For all of you who are part of a family business, you are choosing not to do things the easy way,” Erven laughed, as he presented a list of ways to know whether or not you’re an effective delegator. The owner of Erven HR Services, LLC, Erven has been working with and observing family businesses for many years. In his presentation, he said, he didn’t share anything that he hasn’t seen first-hand. You might not be a good delegator if you: Tend to be a perfectionist Work more hours than anyone else Lack time to explain clearly and concisely Are often interrupted Enjoy what you used to […]

Read More
AmericanHort logo

August 20, 2015

David Savoia To Serve As AmericanHort’s Interim P…

Following Michael Geary’s announcement that he has resigned as president and CEO of AmericanHort, the association has announced that CFO and Senior Vice President for Operations David Savoia will serve as interim president and CEO while the board conducts a search for a new staff executive. Craig Regelbrugge, the senior vice president for advocacy and research, will support Savoia with the association’s external affairs. Geary announced August 12  that he will be leaving his position after September 30 to serve as CEO of the Society for Marketing Professional Services, an organization dedicated to creating business opportunities in the architecture, engineering and construction industries. “As some of you know, I grew up connected to the horticulture industry so this was not an easy decision for me,” Geary said in an eMail. “I have loved working with our organizations and our talented members, staff and partners. However, my choice to return full time to Washington, D.C. will allow me […]

Read More

August 18, 2015

Michael Geary Is Leaving AmericanHort

AmericanHort president and CEO Michael Geary announced last Wednesday that he will be leaving his position at the end of September to serve as CEO of the Society for Marketing Professional Services. “I am writing to share with you that on October 8 I will begin a new professional chapter as CEO of the Society for Marketing Professional Services, an organization dedicated to creating business opportunities in the architecture, engineering and construction industries,” Geary said in an email. His last day with AmericanHort will be Sept. 30, 2015. “As some of you know, I grew up connected to the horticulture industry so this was not an easy decision for me,” he said. “I have loved working with our organizations and our talented members, staff and partners. However, my choice to return full time to Washington, D.C. will allow me to be closer to my family and aging parents and to re-engage with another industry […]

Read More

August 15, 2015

Ball Horticultural Co. Buys Conard-Pyle/Star Roses And …

Ball Horticultural Co. plans to add Conard-Pyle/Star Roses and Plants to its family of breeding and distribution companies, according to a press release dated August 14, which announced the company’s recent acquisition of the famous introducer of Knock Out Roses and other perennials and woody plants to the market. Ball plans to capitalize on the expertise of its Ball Ornamentals woody ornamentals division, as well as Conard-Pyle’s market-leading position as a top rose breeder to strengthen its product line. The sale is scheduled to close by the end of September 2015. Conard-Pyle’s in-house breeding division NovaFlora, along with its intellectual properties and the distribution, production and administration facilities of its wholesale division are also part of the acquisition. NovaFlora is the driving force behind the Star Roses and Plants brand. “Conard-Pyle has been the leader in roses in its market and has been actively diversifying its offering with other woody […]

Read More
cannabis, marijuana plant

August 7, 2015

Big Banks A Step Closer To Financing Cannabis — Or Not

A key Senate Appropriations Committee passed a bill on July 23 that allows the nation's capital to establish regulated medical marijuana stores and lets banks provide financial services to state legalized marijuana dispensaries.

Read More

July 30, 2015

Spread Your Risk Beyond Spring Sales [Opinion]

Growers who participated in Greenhouse Grower’s 2015 Spring Crops Recap Survey said they have had enough of the uncertainty that the weather brings. They said it’s time to build up sales in other seasons like fall so we’re not so dependent on spring. As a couple of wholesale growers, both from the Southeast, very eloquently stated, our industry has mastered squeezing everything we can out of the spring season. And while this year happened to be a very successful one, thanks to the improving economy and elevated consumer confidence, they said, “now is no time to celebrate.” “Spring is still Christmas in the horticulture industry, but we have done such a good job focusing on spring that we have neglected other seasons,” one grower said. “Having so many eggs in the spring basket is dangerous. Fall will never be what spring is, but having a solid second season is in […]

Read More
Berns_Roberto Lopez_Purdue6

July 22, 2015

Cultivate’15 Greenhouse Learning Tour Showcases G…

Growers took advantage of the Greenhouse Learning tour held Saturday, July 11 at Cultivate'15 to see the strategies and technology two successful growing operations are using to tackle production challenges and come out ahead of the game.

Read More

June 16, 2015

Philip Schaafsma To Represent Thermoflor In The U.S.

Philip Schaafsma is a new sales representative for Thermoflor, a company with a lot of experience building garden centers worldwide. The history of the Dutch construction company Thermoflor goes all the way back to 1877. Since then, the company has been through a lot of changes, from simple conservatories to complex glass and steel turnkey projects. With a new sales representative, Thermoflor is well equipped to service the American market. Previously, Petitti Garden Center (Avon, Ohio), Chuck Hafner (Syracuse, N.Y.), Jacob’s Garden (Ottowa Lake, Mich.), Hicks Nurseries (Westbury, N.Y.) and Holes (Alberta, Ca.) were all built by Thermoflor. After a period of absence, the company is now  represented in the U.S. and Canada by Schaafsma, who has more than 40 years of experience in retail lawn and garden, greenhouse growing and the floral industry, and is a former board member of the Garden Centers of America. Schaafsma is the former owner […]

Read More

June 15, 2015

Hortica Insurance To Become Member Of Sentry Insurance …

Upon completion and approval of an affiliation agreement, Hortica Insurance (Florists' Mutual Insurance Company) will become a member of the Sentry Insurance Group, based in Stevens Point, Wis. As a member of the Sentry Insurance Group, Hortica keeps its name and brand and will continue doing business from its current headquarters in Edwardsville, Ill.

Read More
Cal-Poly fields

June 2, 2015

Cal-Poly Students Seek Continued Industry Support To Sa…

Agriculture students and faculty at California Polytechnic State University, San Luis Obispo, want industry members to continue to stand with them in their effort to preserve Class 1 agricultural land from being repurposed. The university recently released an update to its Master Plan that indicates that almost all of its orchards, horticulture facilities and field sites could be repurposed for buildings, including residential and/or recreational space. According to Joel Leonard of Students For Agriculture, an organization of Cal-Poly students in favor of saving the land, the Master Planning Committee will be meeting over the summer to form a final version of its plan and present it once more to the public in the fall, before it is submitted for final approval to the California Board of Trustees. Students For Agriculture’s goal in the meantime is to increase awareness and rally industry supporters to continue to send their input to the planning committee. Visit to see more […]

Read More
Cal-Poly fields

May 27, 2015

Cal-Poly Students And Faculty Ask Industry To Help Save…

California Polytechnic State University, San Luis Obispo, has released an update to its Master Plan that indicates that almost all of its orchards, horticulture facilities and field sites could be repurposed for buildings, including residential, and/or recreational space. According to a letter from Scott Steinmaus, the horticulture and crop science department head, the proposed changes directly affect the current orchard plantings and other long term plans for the department. The department is committed to making sure that its facilities remain invaluable teaching environments that enable its students to learn about crop, fruit and horticulture production, food safety and pest protection, in addition to providing sites for externally funded research projects that benefit the industry. Industry members are invited to submit comments to the university. According to Steinmaus, a recent eMail to the Cal-Poly community from the university president indicates that all of the input gathered through the end of May will be studied by the planning […]

Read More

May 13, 2015

Battlefield Farms Receives MPS-A Qualification

Battlefield Farms, Inc., in Rapidan, Va., has been awarded the MPS-A qualification after becoming a participant for MPS-ABC in 2010. After four years of showing effort and improvement, the company has been awarded the qualification.

Read More

May 8, 2015

How To Survive Succession Planning And Resolve Conflic…

If you work in agriculture, you most likely work with family-owned businesses. This is especially true within the greenhouse industry. I’m fortunate to work for a company that specializes in financing and supporting such businesses. Family-owned businesses often have a level of commitment and support that helps during lean times. This is important for a company exposed to seasonality and events that are sometimes beyond management’s control. Business owners and management are constantly looking for solutions to the unique issues faced by these small but complex businesses. Specifically, how these issues affect the transition from one generation to the next. There are many family enterprise success stories, cases of harmony, health and longevity. Yet it’s no secret that family businesses can struggle with governance, leadership transitions and even survival. According to the Family Business Institute, only 30 percent of family businesses last into the second generation, 12 percent remain viable […]

Read More

April 30, 2015

North Creek Nurseries Welcomes Nikki Drake As New Finan…

Nikki Drake will fill the role of new financial administrator at North Creek Nurseries, with responsibility for the accounting department. She will also serve on the strategic planning committee.

Read More
Andy Huntington Pleasant View

April 29, 2015

Pleasant View Gardens Promotes Andy Huntington to Natio…

Pleasant View Gardens recently announced that Andy Huntington will be the company’s National Sales Manager. Huntington, who has years of horticulture industry experience, will oversee national territory and inside sales departments, while fostering strong partnerships with customers. “Our relationships with customers are central to all that we do at Pleasant View,” Huntington says. “In my new role, I am excited to work with a broader base of broker, grower and retail partners to understand their business needs. Pleasant View’s goal is to be so in tune with our customers that we are able to anticipate their problems before they arise.” Huntington has a history of growing sales and forming long-lasting relationships with a diverse customer base. For the past two years, he has been working as a territory account manager for Pleasant View Gardens, responsible for young plant liner sales in New England and New York. Prior to that, Huntington was […]

Read More