The Ever-Evolving Cuttings Market

Top 10 Cuttings Producers–World Map 2013

Change is a constant among the world’s vegetative cuttings producers. In any given year, the companies on Greenhouse Grower’s Top 10 Cuttings Producers list are added or dropped for many reasons, including consolidation and economics — and 2013 is no exception.

Agribio Group’s purchase of Ecke Ranch last year moved it up to the number one position on our list. Both Agribio and The Dümmen Group are owned by holding company DNA Green Group, but operate as separate entities, according to Mark Schermer, general manager of Fides Oro, also a part of DNA Green Group.Dümmen’s volume increased by more than 200 million units, though it remains at No. 5.

Cohen Nurseries has a new, state-of-the-art facility in Gderot, Israel, accounting for an additional 3.4 hectares of production space, which moved the independent producer to No. 6. this year from No. 7 in 2012.

Florexpo reduced its production slightly in Costa Rica, bringing the operation down one spot to No. 9. Although the operation says its biggest challenge is constant industry consolidation, it is confident in its independent position.

“We have found our place in the market as the last truly independent supplier for North America,” says Florexpo’s Fernando Altmann. “Customers have responded positively to the fact that we offer what they want. We are not forced in a way to offer our own genetics, since we have none.”

Changes In Latitude
While most of the cuttings producers are staying put in the countries where they have stock production, a few changes are underway.

The Dümmen Group will expand its El Salvador farm in 2014 with 20 new acres of greenhouses to produce Ecke poinsettias, according to Perry Wismans. As a result, the existing Ecke farm in Guatemala will be closed.

Beekenkamp reports it is looking in Central America for a possible future site, as shipping from there to North America is faster than out of Africa.

Marlon Carrera from Syngenta Flowers says the company will consider moving its chrysanthemum production outside the U.S. if Quarantine 37 is lifted.

Logistics, Politics And Economics
Because of new security rules and political agendas, shipping from overseas production sites in Ethiopia is becoming a concern, says Martijn Kuiper, Beekenkamp Plants’ sales manager.

“Due to tensions in the region, shipments out of different countries like Ethiopia are being checked more intensively,” Kuiper says. “Because of doubts by the airlines about the security checks in Ethiopia, there are additional checks at the European airports before the cuttings are transferred to the U.S. This causes delays of the shipments, with all kinds of possible problems.”

A dispute between the different airlines and a decision by the Ethiopian government to more-or-less favor its own airline have caused the number of flights from Ethiopia to decrease, Kuiper adds.

“Both issues are not in our grip,” he says. “This makes it more difficult to keep a reliable supply chain. It is also why we are looking at Central America.”

Europe’s tumultuous economic climate has caused problems for Selecta Klemm. Spain’s economy is down and consumption is being cut back drastically. Italy is facing a difficult situation, with both consumers and growers in a holding pattern, and Greece is a small market but has gone down by 50 percent, reports Per Klemm.

“In a situation where there is no growth in the overall European markets, this is for sure not helping, hence being, in my eyes, one of the biggest challenges for 2014,” Klemm says.

Since this economic crisis is not new, Klemm says Selecta Klemm has been implementing its contingency plan over the past few years, directing its efforts toward becoming more competitive.

“We will not cut back our production — actually, it’s the other way around. We intend to increase our market share and production, and see good possibilities to do so,” Klemm says. “But growing volume and turnover in a growing market is, of course, a different ball game than doing this with the current economic development.
“The present situation will accelerate the processes we have already been seeing for some time. Our industry is becoming more professional and there is consolidation on all levels of the value chain. The good thing is, the ones that adapt and have the right strategy will get stronger by this process and the ones that already had a hard time before will drop out. At the end, we should have a healthier situation for
our industry.”

A Worldwide Labor Shortage
Offshore cuttings producers are facing labor shortages in the countries where they set up shop to avoid this very challenge.

Paul Gaydos of Athena Brazil says Brazil’s economy is growing, especially in the state of Sao Paulo, where competition for labor is increasing.

“Labor will be the issue,” Gaydos says. “Why work long hours in a hot greenhouse when you can get an office or retail job that pays the same wage?”

Gaydos says Athena Brazil has a plan in place to keep the employees it currently has, which is working well.

“Most employees are loyal and very happy to be working with Athena,” he says. “As we grow and need more labor, we plan to bring workers from other parts of Brazil to our area on a contract basis as needed during peak times of the year.”

Ball FloraPlant is facing the same issue, with offshore labor rates continuing to rise every year at aggressive rates, says General Manager Allan Davidson.

“Most of the cost of production is labor, so it dramatically affects the cost per cutting,” he says. “Other costs such as fertilizer and electricity are also increasing. We continue to push efficiencies, yields and train the best employees to try to offset some of these increases.”

Crops To Watch In 2014
Cuttings producers report the crops decreasing in demand include osteospermum, argyranthemum, poinsettia and standard annuals like Impatiens walleriana, due to downy mildew.

The biggest crops cuttings producers reported growing are specialty annuals, perennials and potted plants. Among these, growers feel pre-planted combinations are poised for growth in specialty annuals, as well as crops like petunia, calibrachoa, nemesia, lantana, geranium, lobelia, New Guinea impatiens, bidens, mandevilla and begonia, specifically in the boliviensis group.

Potted crops like kalanchoe and chrysanthemums were named as growth areas. Producers also said succulents and unrooted perennials will increase.

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