Top 100 Growers: The Dark Side Of Contract Growing

Top 100 Growers: The Dark Side Of Contract Growing

If another grower put a legal-binding contract on Jonathan Cude’s desk to produce $1 million worth of bedding plants–a contract that held both parties legally accountable–Cude would sign the contract in a heartbeat.

The problem, though, is few–if any–growers draft legally-binding contracts to hold each other accountable in contract growing. Cude, the CEO of Sedan Floral in Sedan, Kan., participated in a contract-growing relationship once about five years ago. Based on the way that relationship played out, plus the contract-growing horror stories Cude continually hears to this day, he has no interest in partnering with other growers to produce crops through contracts.

“The grower we were working with described the program to us, we created a contract that spelled out those obligations to put the grower on the hook and the guy refused to sign it,” says Cude, whose operation just missed the Top 100 Growers cut this year and takes our 101st position. “He was like, ‘Oh no, you can trust us.’ Well, come on. You think Wells Fargo trusts Bank of America?

“When you go into it like that, you already know the other side’s trying to weasel out on some obligation or payment.”

Still, a number of growers continue to contract grow despite a lack of legal-binding contracts. Handshakes and verbal agreements have become the accepted forms of doing business in many cases, but from Cude’s perspective those pleasantries don’t always translate into results for the contract grower.

Sedan Floral

Owners: Jonathan Cude

Location: Sedan, Kan.

Size: 661,804 square feet of greenhouses

Crops: Ornamental bedding plants (75 percent), container perennials (5 percent), herbs (5 percent), flowering potted plants (5 percent), vegetables (5 percent) and plugs and propagation material (5 percent)

Markets: Independent garden centers

Website: www.sedanfloral.com

In Cude’s own experience, the operation he served did not completely fulfill its end of the bargain. Cude also knows other growers who’ve been burned by the principal growers serving box stores, and their misfortunes have turned him in the other direction.

One operation Cude cites is a smaller one that contract grows for several other growers. Just about every year, Cude says, that grower is getting burned in a different way. While one grower stiffs the contract grower on the product, another grower stiffs the contract grower on pay while a third uses a program’s details against the contract grower.

“I think the guys in the position to deal with Walmart looking for contractors are fully aware of what they’re doing,” Cude says. “They know they’re in a position of power with some of these little guys, so the last thing they want is any kind of binding agreement. Can you think of a better way to get rid of your competition?”

Growth, of course, is a goal for many growers, and aligning with the box stores is perceived to be the number one way to grow. So if growth means having to serve a box store’s principal growers, contract growers will do what they believe they have to.

Contract growing isn’t the only path to growth, though. Sedan Floral used to devote about 65 percent of its business to Kmart and another 30 percent to a regional chain store. The opportunities for Sedan Floral with those companies vanished almost simultaneously, Cude says, and he’s entirely committed to independent garden centers and independently owned chain stores like True Value.

“I’ve been really quiet about our growth, but it’s happening, it’s real and we’re moving forward at a very rapid rate,” Cude says. “And it has nothing to do with any single box store.”

Sedan Floral’s growth has nothing to do with contract growing, either, but that’s not to say contract growing can’t work. Even Cude admits growers should take each contract-growing horror story they hear with a grain of salt. If anything, those stories should trigger caution signs and force growers to think harder before making any commitments.

“I hear a lot of cynical comments about contract growing when I’m at OFA (Short Course) or talking to vendors,” Cude says. “They always have little quips to say about contracting. I have yet to hear the stories like, ‘You wouldn’t believe this. You missed out. So and so contracted and put $250,000 in his pocket.'”

Leave a Reply

More From Top 100 Growers...
Henry-Gonzalez-Costa-Farms

April 13, 2018

Costa Farms’ New Chief Marketing Officer Has Experience in a Wide Range of Industries

Henry Gonzalez says the core gardener is aging, which makes it important to reach, engage, and encourage new customers to experience the benefits of gardening and houseplants.

Read More
Bell Nursery Panorama Photo

March 23, 2018

Bell Nursery’s Gary Mangum Provides Insight on Deal With Central Garden & Pet

In light of the March 14 announcement that Bell Nursery Holdings LLC had been acquired by Central Garden & Pet, Greenhouse Grower caught up with Bell Nursery CEO Gary Mangum to get the backstory on the deal. Here is our full interview with Mangum.

Read More
Gary Mangum

March 14, 2018

Bell Nursery Acquired by Central Garden & Pet

Greenhouse Grower just learned that Bell Nursery, headquartered in Elkridge, MD, has been acquired by Central Garden & Pet Company, a leading innovator, producer, and distributor of branded and private label products for the lawn and garden and pet supplies markets.

Read More
Latest Stories
Henry-Gonzalez-Costa-Farms

April 13, 2018

Costa Farms’ New Chief Marketing Officer Has Experience…

Henry Gonzalez says the core gardener is aging, which makes it important to reach, engage, and encourage new customers to experience the benefits of gardening and houseplants.

Read More
Bell Nursery Panorama Photo

March 23, 2018

Bell Nursery’s Gary Mangum Provides Insight on De…

In light of the March 14 announcement that Bell Nursery Holdings LLC had been acquired by Central Garden & Pet, Greenhouse Grower caught up with Bell Nursery CEO Gary Mangum to get the backstory on the deal. Here is our full interview with Mangum.

Read More
Gary Mangum

March 14, 2018

Bell Nursery Acquired by Central Garden & Pet

Greenhouse Grower just learned that Bell Nursery, headquartered in Elkridge, MD, has been acquired by Central Garden & Pet Company, a leading innovator, producer, and distributor of branded and private label products for the lawn and garden and pet supplies markets.

Read More
Stokesia Blue Frills

February 27, 2018

Costa Farms Buys Green Leaf Nursery

Almost a year after buying indoor houseplant grower Delray Plants, Costa Farms has acquired Florida-based Green Leaf Nursery, Inc., which produces indoor foliage and tropical plants on around 50 acres.

Read More
2016 Top 100 Growers With Drone

February 20, 2018

Top 100 Growers Survey for 2018 Is Now Open!

Operations with more than 400,000 square feet of environmentally controlled production are eligible to take the survey, which provides valuable market knowledge on how the nation's largest growers are innovating, sourcing labor, keeping up with demand, and setting trends.

Read More
Battlefield-Farms

December 20, 2017

Battlefield Farms Obtains MPS-GAP Certification

With the increasing requirements of retailers on use of chemicals, and the growing attention to production circumstances, MPS-GAP is a perfect fit for Battlefield Farms, the company says.

Read More
Botany-Lane-Tropical

November 20, 2017

Botany Lane Greenhouses Announces Expansion Into Young …

Botany Lane, a producer of finished tropical plants, succulents, and specialty annuals in the Western U.S., recently announced it is expanding to provide young plants for growers and grower-retailers.

Read More
Damarys-Mora-Crawford-Costa-Farms

November 16, 2017

Costa Farms’ New Marketing Director Eager to Tap Into C…

In her new position, Damarys Mora Crawford will lead Costa Farms’ marketing team and create and execute strategic marketing initiatives to support continued sales growth for the company’s retail customers.

Read More
Speedling-Environmental-Award

November 9, 2017

Speedling Wins Environmental Leadership Award From Flor…

Speedling has eight nurseries throughout the country and two in Florida, where moisture levels are carefully analyzed to improve performance and consistency of transplant operations.

Read More
Costa Farms Owners

August 1, 2017

Costa Farms Will Maintain Operations “the Costa Way” Wi…

The Miami, FL-based, Top 100 Grower operation announced an agreement for Markel to acquire a majority interest in Costa Farms and its related companies. But the operation will continue to be run by current leadership, with the partnership Markel offers to allow it to continue to grow.

Read More
ISO Cutting Machine

May 16, 2017

The Top 100 Growers are Investing in More Technology to…

Labor has traditionally been among growers’ most significant costs, but the continued rising costs and lack of available labor are currently two very heavy burdens that growers have to bear. As the labor supply dwindles, the Top 100 Growers discuss their next steps toward investing in technology to streamline efficiency at their respective operations.

Read More

May 16, 2017

The Top 100 Growers Speak Out on Changes Needed in Immi…

Opinions about the new administration’s approach to immigration reform vary widely among Greenhouse Grower‘s Top 100 Growers. Many say they are “very concerned” about the potential impact on agriculture’s guestworker programs. Others say the entire guestworker program needs to be overhauled to be simpler and easier to use for growers, and hope that this will be part of the reform efforts. And some seem to be generally in favor of the current methods. “I am in favor of securing the borders but want a simple system for legal residency.” — Dale Buist, Countryside Greenhouse and Farm Market “All this talk has made huge waves in the migrant labor workforce. Continuing this path will create an even greater shortage of employees willing to do our type of work.” — Mark Worley, Speedling, Inc. “[Trump] is only enforcing and not reforming. We will lose a lot of our best employees if this […]

Read More
2016 Top 100 Growers List

May 12, 2017

How the Top 100 Greenhouse Growers Tackle Managing Cost…

The country’s largest growers continue to strive to maintain a balance with price and costs while making sure they stand out from the competition.

Read More

May 8, 2017

Greenhouse Grower Top 100 Behind the Scenes: How (and W…

It’s more important than ever to have good data that allows us to accurately measure the size and scope of our industry.

Read More
2016 Top 100 Growers List

May 8, 2017

2017 Greenhouse Grower Top 100 Growers: The Complete Li…

Growth signifies a healthy industry, and indeed, several of Greenhouse Grower’s Top 100 Growers expanded their operations significantly between 2016 and 2017.

Read More

April 11, 2017

Jerry Halamuda of Color Spot Nurseries Retires

The co-founder of Color Spot Nurseries has retired, effective immediately, and has named a replacement.

Read More
Dan and Jerrys Greenhouse 1

February 17, 2017

Dan and Jerry’s Greenhouse Buys Iowa-Based DeJong Green…

The acquisition will allow Dan and Jerry’s, a bedding plant grower headquartered in Minnesota, to extend its seasonal product offerings and service a new customer base with local distribution.

Read More
Dallas Johnson

January 17, 2017

Dallas Johnson Greenhouses Owner Passes Away at 78

Dallas G. Johnson, who started the company in 1985, is survived by his wife, Kay, and two children.

Read More