Get A Grip On Plastics Pricing

Growers typically lock in on one set of prices–the one they’re paying–in discussions with manufacturers and distributors about pots, trays and other plastic materials. Most growers probably realize there are external factors that influence a manufacturer’s costs, but it’s unlikely they dwell on them a whole lot.

One person who’s in tune with the complex plastic resin market is Tony Ferrara, the director of purchasing and logistics at Landmark Plastic who buys all of the Akron, Ohio-based plastic manufacturer’s raw materials. Ferrara advises growers interested in learning more about the factors influencing plastic material costs to spend some time on But perhaps the best starting point to comprehend why pots and trays are priced as such, he says, is to better understand the monumental role of polyethylene and the factors that influence its production.

“The plastics world is driven by the production of polyethylene,” Ferrara says. “Everything else is a weak stepsister.”

The Power Of Polymers

The petrochemical plants that produce ethylene run on natural gas and fuel oil, Ferrara says, so fluctuating natural gas and oil prices obviously have a tremendous effect on a polymer company’s ability to produce polyethylene. This much growers already seem to get.

There are other factors that influence a plastic manufacturer’s costs, though. One such issue is the rising cost of benzene, a chemical that’s a component of polystyrene, which is one of two principal resins used to make horticultural containers. Benzene, which Ferrara says sold for many years between 90 cents and $2 per gallon, now costs between $3 and $4 per gallon.

“Benzene is made from crude oil No. 1,” Ferrara says. “It was one of the things in paint that we no longer use in paint. So because demand of benzene is down, production is consequently down. But the cost of making the monomer is high because of the cost of crude oil.”

Ferrara says benzene, as well as propylene, can be used as additives in gasoline. So rather than make either one available to plastics manufacturers, polymer companies have the option to sell them as gasoline additives when gas hits a certain price.

“They don’t have to make polypropylene,” Ferrara says. “The producers are in business to make money. So they’re going to make the most money with the least effort.”

Jim Daw, director of operations at Myers Lawn and Garden, sees shifts at the supply level, as well. Daw says suppliers now want advance forecasts, which optimize the supplier’s output and minimize the availability of surplus resin. Suppliers have historically operated at 90 percent-plus utilization, he adds, but suppliers are now realizing such a high production rate isn’t necessarily to their advantage.

“Now, they supply only what was forecasted and do not have any surplus material in the market that supports the monthly price increases we have seen over this past year,” Daw says.

Fortunately, over the next two years, Myers, Landmark and other plastics manufacturers anticipate a more global supply of resin to be made available to the United States.

“When all that capacity gets online, it might make some foreign country an exporter to North America,” Ferrara says. “We actually had that happen 10 to 12 years ago. There were certain distributors bringing in resin from offshore because they could sell it cheaper than domestic resin could be bought. And it could happen again. We’re not building reactors here because of EPA regulations, so capacity is coming on in other parts of the globe.”

So how do plastics manufacturers stay in business? It’s certainly a challenge as margins erode and more costs are pushed onto manufacturers. Landmark’s Jim Frederick says manufacturers absorb as many costs as they can, but there’s a limit to how much cost they can absorb before they must raise prices on growers.

“It’s not that we want to change our prices,” says Frederick, Landmark’s national account manager. “We’re forced to make some changes because of these different factors and because we use so much plastic. It’s such a major part of our business.”

The Box Stores As Drivers

Plastics manufacturers are also forced to react differently than they traditionally have because of Walmart, Home Depot and Lowe’s. The three box stores combined represent the majority of plants consumed in the market and, subsequently, the majority of plastics consumed at the retail level.

Because Walmart, Home Depot and Lowe’s have each stressed the importance of differentiating their brands from the other two, the number of colored pots on the market has increased. And the more color in pots, the more virgin resin is needed. And virgin resin runs up costs.

“Everything we were producing at one time was black,” Ferrara says. “It was all produced out of regrind plastic. Now, because of all these colors, we’re running 50 percent of what we process every month as virgin resin. One of the big boxes actually started the trend several years ago, saying it had to have every plant in a different colored pot.”

Still, even the box stores are realizing the more color used, the higher costs become.

“That same box store has since dropped back from the stance of having so much color,” Ferrara says. “When virgin resin reaches the type of pricing we’ve seen the last several years, companies are forced to the regrind market.”

Freight As A Factor

Another factor that influences plastic manufacturers’ pricing is freight, which is substantially higher than it was just 10 years ago. Ferrara identifies three specific events as the biggest influences on freight:

1. Mandatory driver drug testing. The mandate has reduced the number of available drivers, he says.

2. Sept. 11, 2001. “The terrorist attacks changed the way the insurance industry looked at everything,” Ferrara says. “A lot of guys had to shut down because they couldn’t afford insurance.”

3. Change in hours of service. Under old laws, drivers were permitted to be on the road 10 hours per day. Now, drivers can be on the road for 11 hours, but there’s a catch. “From the time they turn on the truck they have 11 hours until they have to shut it down–regardless of whether they’re driving or not,” Ferrara says.

Drivers are more particular about which loads they’ll take, too, because they worry about slow unloads or waiting around to get their truck unloaded. Traffic is another big factor that steers drivers away from particular loads.

“Traffic has always been a problem taking freight east into the New Jersey, New York and New England areas,” Ferrara says. “Another problem is the freight coming back is very low-paying freight. We’ve loaded many trucks over the years that get here to Ohio by hauling trash from the East Coast to a landfill. They’ll have to wash their truck and then haul plastic back to New Jersey, for example, because they’re a New Jersey carrier.”

Leave a Reply

More From Crop Inputs...
Coleus 'Colorblaze Velveteen' (2015 University of Tennessee Field Trials)

November 28, 2015

2015 University of Tennessee Gardens (Knoxville and Jackson, Tenn.) Field Trials Results

See the 2015 field trials results (includes photo gallery) for University of Tennessee Gardens in Knoxville and Jackson, Tenn.

Read More
Feature Image Cob 700 (NewLux)

November 28, 2015

16 LED Lighting Solutions For Your Greenhouse

Narrowing in on the right LED lighting product often comes down to considering your specific crop needs and growing requirements to see what works best for your application. Here are 15 LED products to take into account when choosing the right fit for your greenhouse.

Read More
Begonia 'BabyWing Red' (2015 Louisiana State University Field Trials)

November 27, 2015

2015 Louisiana State University (Hammond, La.) Field Trials Results

See the 2015 field trials results (includes photo gallery) for Louisiana State University in Hammond, La.

Read More
Latest Stories
Stockosorb Crystals_with water Agriculture leaf (Evonick)

November 21, 2015

9 Sustainable Growing Media Products For Superior Green…

Manufacturers are delivering new growing media products to help growers attempt to minimize their footprint without sacrificing quality. Here are nine new products to consider for your greenhouse operation.

Read More
Suzanne Wainwright-Evans

November 16, 2015

Real-World Biocontrols Trends From The Buglady

During ,em>Greenhouse Grower's Top 100 Breakfast at Cultivate'15, Suzanne Wainwright-Evans of Buglady Consulting discussed trends in biocontrols, including what she has seen from breeders, growers and even public gardens.

Read More

October 13, 2015

Bayer CropScience And OHP To End Marketing Partnership …

The move allows Bayer to market its ornamental products directly to greenhouses and nurseries, although OHP will still service a limited line of Bayer products.

Read More
RISE 2015 Governing Board

October 13, 2015

RISE Annual Meeting Celebrates 25 Years of Industry Adv…

The annual meeting for RISE (Responsible Industry for a Sound Environment), held the last week of September in Orlando, was more than just presentations, awards and the election of new officers. It was also a celebration of 25 years as a leading advocate for the specialty pesticide and fertilizer industries.

Read More

October 9, 2015

New Biochemical Miticide Is Designed To Combat Varroa M…

EPA recently registered Potassium Salts of Hops Beta Acids (K-HBAs), which is intended to fit into a rotation program to battle resistance.

Read More

October 7, 2015

Ball FloraPlant Eliminates Neonicotinoid Use On Its Off…

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 Expa…

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

September 25, 2015

Canadian Sphagnum Peat Moss Association Announces Early…

According to an August 31 survey of members of the Canadian Sphagnum Peat Moss Association (CSPMA), whose members represent approximately 95 percent of all North American peat production, the peat harvest season has been adequate, but not strong, and could cause shortages and potentially higher transportation costs. Down To The Dirty Details The survey inquired about the status of CSPMA members’ 2015 Actual Harvest (including an estimate of what can be expected to be harvested for the remainder of the season) as a percentage of their 2015 Expected Harvest. The lack of a strong harvest overall may challenge peat availability. The Prairie Provinces (Manitoba 98 percent, Saskatchewan 88 percent and Alberta 94 percent), experienced early favorable weather conditions and a strong start to the year. This helped to minimize periodic, negative, weather-related conditions during the balance of the harvest season, and the harvest numbers are close to achieving the expected amounts. […]

Read More

September 23, 2015

New Crop Protection Products And Label Updates

Here are some of the most recent products released and label updates for crop protection agents in the greenhouse and nursery market. Fame Fungicides (FMC Corp.) FMC Corp. has introduce Fame fungicides, a family of FRAC 11 group (Strobilurin) products that delivers fast-acting, patented fluoxastrobin protection against major soil and foliar diseases. Rainfast in 15 minutes, Fame fungicides can be used on most greenhouse and nursery plants and provide fast foliar and root uptake. “Proven by university research, Fame fungicides offer fluoxastrobin action, which ensures a high degree of systemic activity to provide very rapid disease protection and stop further growth of established disease,” says Naimur Rahman, strategy and fungicide marketing product manager for FMC. The Fame fungicide family includes: • Fame SC: a suspension concentrate fungicide containing fluoxastrobin that controls major diseases, including anthracnose, downy mildew, powdery mildew, scab and leaf spot. It provides rapid foliar and root uptake […]

Read More
Offshore farm profiles Dummen Orange Las Mercedes Solanaceas GH

September 8, 2015

Dümmen Orange Implementing Consistent Standards On All …

Owning and operating several locations can be a challenge in maintaining consistent quality and cleanliness across the board. This is true of both breeders and growers. But those who do it right have invested in technology and practices that ensure that plant quality matches, no matter where their plants are shipped from. That’s the goal for Dümmen Orange. Now the world’s largest producer of unrooted cuttings, the company has a combined 150 hectares or 370 acres of production space worldwide, dedicated to cuttings production. Recent acquisitions of product portfolios, both this year and in the past few, has raised the company’s cuttings production expectation to more than 1.4 billion, including 350 million in North America. It has farms all over the world (see the 2015 Top Cuttings Producers ranking to see where), and produces cuttings for its own genetics, as well as collaborating with more than 30 third-party breeders across all […]

Read More
Bill Lewis grower manager at Delray Plants

August 31, 2015

Delray Plants Takes Preventative Approach To Pest Contr…

Trying to control pests effectively on a wide variety of crops is a major undertaking. Delray Plants in Venus, Fla., has been using biological controls as a part of its pest control program for more than 10 years. It operates 300 acres, which includes covered structures and 7 acres of outdoor field production.

Read More
Bob’s Market and Greenhouses’ Ron Morris pours Stockosorb into the hopper for distribution on the conveyor line

August 13, 2015

How Bob’s Market And Greenhouses Improved Growing…

My father started our company 45 years ago growing bedding plants, mainly early season production and finished plants for our West Virginia market. It was in the early 1980s that we started growing earlier spring production and shipping materials to southern markets, and by the late 1980s, we also produced pansies for fall. We started using hydrogels when they first came on the market in the early 1990s and found that they really helped with our production by keeping plants healthier for these new markets. Over the years, we’ve grown to be a large young plant producer and have a sizable business growing finished plants in cell packs, 4 1/2-inch pots, 6-inch pots, gallon containers, hanging baskets, multiple sizes of large containers and large baskets for municipal use. Creating The Ideal Soil Mix With our old system, it took several workers to mix pre-made soil with slow-release fertilizers in cement […]

Read More
Fertilizer Rates Feature Image

August 12, 2015

Selecting Fertilizer Rates For Several Spring Bedding P…

Fertilizing bedding plants can be difficult due to the differing needs of the large variety of plants that we grow. Many operations do not grow enough of any one crop to cater the fertilizer specifically for each crop. Therefore, grouping crops with similar fertilizer requirements and having two to three fertilizer strengths available is a practical way to ensure plants are getting the fertilizer they need. With many new plant varieties on the market, we wanted to conduct a trial at Cornell University to determine best fertilizer rates for several common bedding plant crops. 22 Bedding Plants Studied To Establish Fertilizer Rates Plugs and rooted liners of 22 crops (Table 1) were transplanted into 4-inch (500 mL volume) round pots with a commercial peat/perlite based substrate. The plants were grown in a glass greenhouse at Cornell University during the spring season at a spacing of one plant per square foot. Heating set […]

Read More
Feature image The Aphid Guard Aphid Banker Plant, coming soon to the market, supports beneficial insect populations.

June 21, 2015

The Latest In Crop Protection

Protecting your plants from the latest threats is no easy task, but new product lines promise to safely and effectively eliminate a wide range of pests and diseases, without harming your employees or the environment.

Read More
Bee On Flower

June 18, 2015

Pest Management And Marketing Strategies For Bee-Friend…

Michigan State University Extension shares pest management practices to produce plants that are safe for pollinators and marketing strategies for clearing up confusion about bee-friendly plants.

Read More

June 13, 2015

UMASS Fertilizer Trials Recommend Nature’s Source Organ…

In a recent online fact-sheet at its Extension website, the UMass Amherst Center for Agriculture, Food and the Environment lists Nature’s Source Organic Plant Food 3-1-1 as “the best liquid organic fertilizer,” according to Dr. Douglas Cox, Stockbridge School of Agriculture. It is called-out by the Extension after a number of years of studying the use of organic fertilizers for growing commercial greenhouse crops. The trials evaluated traditional water soluble and granular slow-release chemical fertilizers. Dr. Cox recommends Nature’s Source Organic Plant Food 3-1-1 as a liquid fertilizer that is readily available, cost effective, OMRI-listed and with good label directions for greenhouses. He also mentions the ease-of-use in how it mixes well with water and can pass fertilizer injectors. “Nature’s Source is currently the best liquid organic fertilizer,” Cox wrote in his article “Organic Fertilizers – Thoughts on Using Liquid Organic Fertilizers for Greenhouse Plants,” “I have seen no foliar chlorosis yet with this fertilizer. Nature’s source is widely available and a great […]

Read More

June 10, 2015

BASF’s Sultan Miticide Receives California Regist…

BASF Sultan miticide recently received registration in California, giving ornamental growers a new rapid, targeted mode of action for mite control. Sultan miticide, with active ingredient cyflumetofen, offers ornamental growers targeted knockdown of all life stages of tetranychid mites, with long residual control. It has practically no toxicity to beneficial insects, including predatory mites and pollinators. Sultan miticide offers a new mode of action to combat cross-resistance with other commercial miticides, and is compatible with integrated pest management programs (IPM). “The long-awaited California registration of Sultan miticide is exciting news. Greenhouse, nursery and landscape professionals in the state now have a new class of chemistry that gives them fast control over all life stages of plant-damaging mite populations,” says Joe Lara, senior product manager for BASF. “Sultan miticide now provides California growers with a much needed new first choice for miticide resistance management programs that won’t disrupt populations of beneficial […]

Read More
Bee on a Sedum

May 27, 2015

Industry Associations State Their Support Of National P…

AmericanHort, Society of American Florists, American Floral Endowment and Horticultural Research Institute joined together to embrace key aspects of the federal government’s recently announced National Strategy for the Protection of Honey Bees and Other Pollinators. The long-awaited strategy has three major goals: reducing honey bee colony losses, increasing Monarch butterfly populations, and restoring or enhancing millions of acres of land as pollinator habitat through public and private action. According to the statement, the associations are studying the details, but they agree that the overall approach appears balanced and mostly sensible. The rest of the statement reads as follows: “The national strategy’s overarching goals dovetail well with the focus of the ongoing Horticulture Industry Bee and Pollinator Stewardship Program. Under that initiative, we have directly funded several priority research projects, and collaborated on additional research funded by others, to provide critical scientifically sound guidance for professional horticulturists. We are developing a grower […]

Read More
[gravityform id="35" title="false" description="false"]