Dr. Charlie Hall on Knowing Your Costs and Value
September 18, 2025 During times of market uncertainty, turning to trusted experts is essential. That’s exactly what we did when we reached out to Dr. Charlie Hall, Chief Economist at AmericanHort and Professor and Ellison Chair in International Floriculture at Texas A&M University, Department of Horticultural Sciences, to get his thoughts on tariffs, inflation, prices, labor, and more.
On Tariffs and Inflation
“We’re obviously facing an inflationary environment, and it looks like the minimum tariff rate that folks are going to have to pay is 10%,” says Hall.
“The good news is there are provisions for products covered under the U.S.-Mexico-Canada Agreement, including peat moss. But there are a lot of other products also coming from our immediate neighbors, and those products are going to be more expensive. Greenhouse manufacturers, as well as manufacturers in general, are already working through steel and aluminum prices.”
What remains uncertain, Hall says, is how much of the tariffs exporting countries will absorb and how much will ultimately be passed down the supply chain to consumers.
“There’s no way exporting countries or domestic suppliers can afford to eat all of it, and so we’re going to see some inflationary pressure,” Hall says. “This also puts unintended pressure on the Trump administration, because their whole platform was based on the economy and trade. We’re already seeing the effects playing in the most recently revised labor report (Editor’s note: This was written in mid-August). When you see those types of revisions, that’s usually reflective of some underlying current in the economy that’s not favorable.”
On Prices to Charge
Growers should be ready to adjust prices multiple times in the coming year as input costs fluctuate, Hall warns. “The question is, at what price level will we start seeing strong pushback by customers? Will they start trading down and buying more succulents and bedding or foliage plants at the expense of trees and shrubs, which is what we often see during contractionary periods?”
While projected input prices may rise between 5% and 9%, Hall says it could take months to fully understand the real effects of tariffs. “Corporate profits are currently at historic highs, so they shouldn’t have to pass these costs down the supply chain immediately,” Hall says. “But in the long haul, they won’t be able to afford not to.”
On Paid Prices of Goods
In his State of the Industry presentation at Cultivate’25, Hall projected a 5% to 9% increase in prices paid by growers, weighted by potential tariff rates. While labor remains the largest expense, other categories — including containers, propagation materials, and transportation — are also rising sharply. “If those other input costs continue to increase at the same rate or more, that will exacerbate the situation,” Hall says. On the flip side, Hall credits the work being done by groups like AmericanHort and others to maintain the H-2A Adverse Effect Wage Rate (AEWR).
“If labor rates hold steady, that may be the one thing that can help growers offset additional input costs,” he says.
On Labor and Efficiency
When it comes to cutting costs, Hall stresses that labor should be the first priority.
“If you haven’t done a lean flow analysis, you’re doing yourself a big disservice,” Hall says. “Look at everything from the front end of your business (the office) to production (the greenhouse) to the back end (the shipping dock) and look for any ways to make those processes more efficient. You might find enough labor savings to offset any increases in input costs.”
Charlie’s Best Advice for Growers
So, how can growers not only weather the storm as they plan for 2026, but also succeed? Dr. Hall highlights four key priorities:
1. Line up Secondary Suppliers
“There are way too many companies that overlook this,” he cautions. Having backup options for all major inputs is critical in today’s unpredictable market.
2. Understand Your Full Cost Structure
Inputs are just one piece of the puzzle. “Your overhead and administrative costs are the second part of the equation,” Hall says. Make sure costs are allocated properly so they’re fully covered.
3. Emphasize Your Value Proposition
Hall stresses the importance of helping customers see why your products stand out. “Make sure your customers understand the advantages of buying from you versus somebody else.”
4. Be Prepared for Consumer Trade-Down
If you’re a bedding plant grower, Hall notes that you may be in a stronger position. “During times of market uneasiness, people don’t necessarily stop buying plants; they just trade down in what they’re buying.”
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