Countering Costs

Reducing and recovering costs has become more imperative than ever for North America’s largest plug and liner producers. Rising input and fuel costs have put this highly competitive segment in a tighter squeeze than ever, but the companies you’ll find on our annual Top 25 Young Plant Growers ranking are top performers at the top of their game. Unlike our Top 100 Growers, which are measured by physical size, these companies are measured by sheer output – number of plugs and liners produced.

With the exception of ForemostCo Inc. at No. 4, you’ll notice the traditional seed-based plug growers dominate the top half of the list. Many of these companies have expanded into rooting cuttings and have become instant large vegetative players in the last eight years, but seed still dominates because it’s easy to automate and the input cost is low. And a lot of the cuttings coming into this country are bypassing rooting stations and going right to the finished grower customer.

Top 25 Young Plant Growers

Grower Quantity Produced To Sell In 2008 HQ Years In Young Plants
 1. Tagawa Greenhouses and Ball Tagawa Growers  490 million  CO 41
 2. Green Circle Growers  450 million

OH

 40

3. Speedling

 275-280 million  FL  40
 4. ForemostCo Inc.  220-240 million  FL  21
 5t. Plug Connection  200 million  CA  21
 5t. C. Raker & Sons, Inc.  200 million  MI  30
 7t. Knox Nursery  150 million  FL  45
 7t. Wagner Greenhouses  150 million

MN

 N/A
 9. Bob’s Market & Greenhouses  126 million  WV  12
 10t. Jolly Farmer Products  125 million  NB  25
 10t. Kube-Pak Corp.  125 million  NJ  36
 12. Van de Wetering Greenhouses  120 million  NY  19
 13. Plainview Growers  110 million  NJ  18
 14. Yoder Brothers  80-90 million  OH  88
 15. Cal Seedling Co.  70 million  CA  15
 16. Floral Plant Growers  66,304,705  WI  32
 17. First Step Greenhouses  55 million  CA  12
 18. EuroAmerican Propagators  53 million  CA  15
 19. Van Wingerden Greenhouses  50 million  WA  28
 20. Northwest Horticulture  41-45 million  WA  8
 21. Four Star Greenhouse  41 million  MI  N/A

22. Wenke/Sunbelt Greenhouses

 39,137,600  MI  15
 23. Pleasant View Gardens  37 million  NH  32
 24. Mast Young Plants  35-40 million  MI  27
 25. Twyford International  22-25 million  FL  23

 

We’re always on the lookout for more companies that produce enough plugs and liners to be considered for this ranking. Additions this year include First Step Greenhouses in Temecula, Calif., producing 55 million plugs at No. 17. I was surprised to learn First Step sells 95 percent of its plugs directly to growers, not through brokers. Canadian young plant grower Jolly Farmer Products in New Brunswick also uses a direct sales model with 92 percent of its plugs and liners sold directly to growers.

With facilities in Michigan and Georgia, Wenke/Sunbelt Greenhouses is an overdue addition coming in at No. 22. Also in Michigan, Rick & Joyce Mast return to the rankings with Mast Young Plants at No. 24. Their previous company was Glass Corner Greenhouses, which ceased operations last fall. States most strongly represented in the ranking are California, Florida, Michigan, New Jersey, Ohio and Washington.

Keep On Truckin’

Most of the Top 25 Young Plant Producers prefer to deliver plugs and liners on carts or in pallets via truck than rely on carriers like Federal Express, DHL and UPS, although those carriers are an important resource and sometimes make the most sense, depending on the location of the grower customer and quantity ordered. Disposable one-way racks have become a cost-effective, hassle-free option. “Ninety percent of all our plug shipments are shipped via our new pallet shipper,” says Richard Gigot of Northwest Horticulture. “We’re able to ship more plants per pallet with the same shipping benefit of carts.”

For two years, Twyford International has been using disposable wooden racks for long-distance motor freight shipments. “This concept has enabled liners to be transported in an environment that enables them to arrive in fresher and less-stressed condition rather than being enclosed in a box for several days,” Twyford’s Joseph Gerek  says. “The racks are also recyclable.”

Young plant growers have had to  become true logistics companies to manage the rising costs of gasoline and transportation. The key is to recover costs without pricing themselves out of a sale. Strategies include:

• Raising freight rates.
• Adding fuel surcharges.
• Shipping full trucks.
• Working with customers to combine orders whenever possible.
• Offering an expanded truck delivery area.
• Using transportation software to optimize route efficiency.
• Negotiating shipping contracts with large carriers.
• Choosing the least expensive shipping method for the customer.

“We are passing surcharges onto customers,” says Peter Darrow of Jolly Farmer Products. “This is a variable amount per box, which is adjusted every couple of weeks to reflect the latest surcharges that FedEx and DHL are assessing us. Logistically, we have negotiated excellent rates with both FedEx and DHL and will use these services strategically to get the best service and rate to a given area.”

Boiling Point

To some extent, young plant growers absorb a portion of the energy costs for the rest of the industry. While finished plant growers have the option of delaying when they fire up greenhouses to avoid the coldest days of winter, this is peak season for young plant production, especially for spring crops. As a result, young plant growers tend to invest the most in energy conservation, especially in Northern climates.

Northwest Horticulture is installing heat curtains in seven acres of its Mabton, Wash., facility to capture day-time heat and reduce night heat loss. Gigot says he expects an excellent return on the investment.

Other strategies to cope with rising energy costs include:
• Closing off sections of the greenhouse and consolidating growing space to be high density.
• Upgrading poly roof coverings.
• Putting double poly on the end walls of greenhouses.
• Installing dual fuel systems (e.g. diesel/propane) to take advantage of dips in pricing for each.
• Installing biomass boilers to burn wood chips and other organic materials.
• Installing floor and bench heating.
• Negotiating fuel service contracts.
• Using Southern facilities more for high energy crops.
• Growing crops that require less heat.
• Raising prices

Jolly Farmer installed a biomass boiler when it built its range in New Brunswick, and then in 2002, installed a thermal storage and transfer system. Extra hot water produced by the wood boiler during the day can be stored and used at night. “This has reduced our dependence on oil to near zero,” Darrow says. “While we are mindful not to waste energy, we firmly believe cutting corners to reduce costs is counter productive. Producing top quality material is the first importance, because that is how we can best serve our customers.”

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