State of the Greenhouse Industry: One Size Does Not Fit All
December 15, 2022 
It used to be that when you tried to gauge the pulse of the greenhouse market, one issue would tend to rise above the rest. Labor is the obvious one, and in 2021, the supply chain dominated the discussion.
That is no longer the case. A wide range of greenhouse growers, representing multiple regions and crops, participated in Greenhouse Grower’s 2022 State of the Industry survey. In doing so, they voiced strong opinions on everything from economic conditions to meeting consumer demand while dealing with shortages in both talent and hard goods.
Keep reading to learn more about the driving factors shaping the horticulture industry as we move into 2023, and how growers, suppliers, and others are navigating an increasingly challenging environment. Starting with …
What Are the Top Concerns You Have Regarding Your Business?
- The economy (59%)
- Production costs (57%)
- Labor costs (37%)
- Availability of skilled labor (29%)
- Transportation (14%)
Labor
Labor was and still is the dominant concern facing the horticulture industry. The close of 2022 did bring some good news at least, with the Biden administration doubling the number of H-2B visas available for 2023. You can learn more here.
Supply Chain
If there is any good news about the horticulture supply chain in 2022, it’s that the situation is slightly better than it was in 2021. Perhaps that’s because growers were more prepared to deal with potential delays or product shortages.
“We had a lot of problems getting pots. We had to scramble to find what we needed, but were able to meet our production schedule in a timely fashion,” said one respondent. “We may not have been able to get specific items, but we were able to substitute comparable items.”
The grower/vendor and grower/customer communication also seems to have improved.
“We are asking for and giving honest deadlines and expectations,” said one respondent. Another noted, “Constant follow up is key, so there are as few surprises as possible.”
We also asked how supply chain issues affected you this year, and how they are affecting your planning for 2023 and beyond. Here are just a few of the responses.
- “So far so good for 2023. Supply chain issues impacted our plastic and peat delivery dates. We looked into other companies that we hadn’t used previously.”
- “We ended up paying 25% more for supplies than in the past. That really hurts the bottom line.”
- “Availability and prices of specific lines of pots and trays. Also, if we have to change to a different manufacturer, then we may have to buy all new trays instead of washing and re-using old ones.”
- “Getting the needed plants was hard to impossible. It was also much harder to get materials like soil, perlite, and pots.”
- “The worst has been with tissue culture plants and there is little we can do.”
- “We are making sure to order things with plenty of lead time, and hope things come in time for production.”
- “We’ve been ordering extra and canceling when we don’t need it.”
- “We had to order materials so far in advance it affected our cash flow.”
- “Had to order and receive product months before we normally would, to guarantee we would have it on hand for spring. Lots of substitutions of items and plant varieties, which affected our offerings to our customers.”
- “Hurt us this year as we were unable to get our soil for a month, and we lost a lot of production during that time.”
- “Not as bad as 2021, but you still don’t know at times if you will get a product you ordered.”
Costs
Product delays and shortages are not the only issue affecting your ability to produce a crop. Higher costs across the board are squeezing already tight margins.
“Profitability has greatly decreased as rising costs of supplies are outweighing the rise in consumer demand we’ve seen the past couple years,” said one survey respondent. “It has made us more cautious in our planning for 2023.”
One question we asked was “How has increased inflation and/or rising input costs affected you?”
- “Reduced profit margin somewhat, but we raised prices to try and meet inflation.”
- “Yes, fuel has been the biggest cost increase.”
- “Inflation is putting a serious damper on any expansion plans. Time to hunker down and ride out this storm.”
- “Creating more cost-conscious product lines.”
- “Not heating greenhouse to 60°F or higher until mid-March.”
- “Find ways to combat cost: reuse containers, order less expensive pots, shorten hours to keep labor cost down.”
Transportation
Transportation is increasingly cited as a top concern for growers who ship plants. It makes sense; you can grow the finest-looking plants on the planet, but if you’re not able to deliver them to where they’ll be sold, all your effort will be for naught.
“Trucking is an ongoing issue we have to address on a daily basis,” noted one respondent in this year’s survey. “From regulation to availability, we all have to realize we are just as much logistics experts (or we need to be experts), as we are live goods experts. Getting professional staff in place that are experts in logistics is key in all of this.”
So what solutions have you found to address your operation’s biggest trucking challenges?
- “Offer higher pay to truck drivers, utilize our maintenance team, and hire more truck mechanics to work on trucks. There’s nothing we can do for fuel costs aside from thinking efficiently about shipping logistics.”
- “Building strong relations with our carriers.”
- “Open up the checkbook.”
- “We are securing our truck drivers earlier.”
- “Oftentimes, we pick things up ourselves because trucking companies either can’t find space/drivers or their fuel surcharges are ridiculously high. It’s more economical to send our own truck sometimes.”
- “Buying local as much as possible.”
- “Consolidate delivery schedules to reduce unnecessary travel, encourage customer pick up whenever possible, work with distributors to decrease the amount of in-house deliveries, and capitalize on delivery routes that would be unreachable otherwise.”
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