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Supported by Allotments of the Regional Research Fund, Hatch Act, as Amended August 11, 1955 January 1 to December 31, 2000 Project S-290 (formerly S-103): Technical and Economical Efficiencies of Producing and Marketing Landscape Plants
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ANNUAL REPORT OF COOPERATIVE REGIONAL PROJECTS
Supported by Allotments of the Regional Research Fund,
Hatch Act, as Amended August 11, 1955
January 1 to December 31, 2000Project S-290 (formerly S-103): Technical and Economical Efficiencies of Producing and Marketing Landscape Plants
PROGRESS OF THE WORK AND PRINCIPAL ACCOMPLISHMENTS: Numerous articles, bulletins, and other publications were completed as work progressed on the four major project objectives: (1) evaluate alternative green industry plant production, establishment, and maintenance systems, (2) evaluate the regional competitiveness within the lgreen industry, and (3) evaluate the demand for green indsutry plants, materials, and services, and (4) evaluate the effectiveness of alternative merchandising techniques. The unique multi-disciplinary blend of horticulturalists and agricultural economists continue to provide innovative and thorough analyses and collaboration. The committee includes representation from twenty two states, with twelve of these states being outside the Southern region. This national membership has evolved because of the relevance of investigating the production, marketing, and economic impacts of landscape plants within and across plant hardiness or climatic zones, rather than state or regional boundaries. Progress is reported under the appropriate project objective.
Objective 1: Evaluate alternative green industry plant production, establishment and maintenance systems. Alternative mulches are being examined for weed control in large containers. Uniform Ilex x ‘Nellie R. Stevens’ and Lagerstroemia indica x faurei ‘Natchez’ liners were transplanted in 1999 (crape myrtle or 2000 (holly)). Crape myrtles were overseeded with prostrate spurge in the Summer, and Holly were overseeded with hairy bittercrest in the winter. Mulches included recycled newspaper pellets (RNP), Spin-out coated RNP (SRNP), fabric disks (FD), ground kenaf (GK), shredded waste tires (SWT), wheat straw (WS), cereal rye straw (CRS), oat straw (OS), and paper mill sludge (PS). Treatments were compared with a weedy check (WC), handweeded check (HC), and Rout 3G, a herbicide check either broadcast (BR) or applied to the individual pot (IR). Percent weed control rating 180 DAT for crape myrtles were highest for FD, IR, SWT, CRS, and BR. Rating were lowest for RNP, HC, and PS. Percent weed control ratings 180 DAT for holly were highest for RNP, IR, SRNP, and GK reduced height of crape myrtle compared tot he chemical checks. RRNP ha the greatest caliper, and OS, CRS, and WC, had the smallest. All other treatments were similar. There were no differences in height and calliper of holly. Mulch degradation studies will be completed this spring. Additional, the influence of mulch on over-or underseeding of weed seed will also be terminated. Finally, an economic analysis of various treatments will be performed.
The potential of oriental vegetable production as a niche market for agronomic producers is being examined. Additionally, a large ornamental plant breeding program is being initiated. The plant breeder will use Chinese evergreen Magnolia delavayi and M. insignis with pink to red flowers to develop hybrids that are highly adapted to USDA hardiness zone 8b. Additionally, disease-resistant Cornus florida developed in Tennessee will be used to develop disease-resistant cultivars that are adapted to the Gulf South. Finally, collections of Alstroemeria, Zantedeschia, and Agapanthus are being initiated for future breeding programs.
Another project's objectives were to develop and evaluate alternative environmental plant production, establishment and maintenance systems, and to increase regional competetiveness within the envrionmental plant industry. Towards these objectives we evaluated the use of copper paints and copper-treated burlap for the control of rooting out in B&B nursery stock during holding in wholesale and retail yards. We also evaluated copper polymers for use in controlling circling of plant roots within containers. Plants grown in treated bags and containers were planted out in the field for evaluation of post-production root growth and plant health. We also evaluated (ongoing) the remediation of runoff from nursery and landscape facilities using treatment wetlands planted with ornamental plants that might provide additional income for growers. We evaluated the growing and marketing requirements of new sustainable plant species for introduction to the nursery industry. We also initiated trials of methods for repelling deer from nursery and landscape settings, with the goal of improving plant production and maintenance. Most important were the development and evaluation of methods for maximizing plant production and maintenance while reducing environmental impacts. This included methods of controlling and treating point source pollution from nurseries, methods for maintaining product quality through the control of root growth, introduction of new plant species and reduction in deer browse.
Production costs were estimated for 38 combinations of crops, market, machinery and technology. Production practices and inputs used for 4-row and smaller equipment were from a periodically updated commercial grower survey, and by Extension Specialists. A state-wide survey of machinery dealers used to update machinery complement prices, and input prices were based on a supplier survey. Chemicals included were updated as appropriate when labels changed. Using the per hectare cost levels from budgets, and revenues from assumed prices and yields net returns depended on market channel, technology and mechanization assumed. For most crops returns exceeded direct costs including a charge for all hours of labor required. Generally, higher technology levels and larger machinery provided higher returns compared to standard technology and smaller equipment.
In-field, above-ground, and pot-in-pot production methods for crapemyrtle were analyzed. Container systems were more profitable than the in-field system and plant size at selling had important effects on profits. The pot-in-pot system had highest total capital outlay and fixed cost levels but was least costly on a per harvested plant basis due primarily to less intensive, labor-saving cultural practices and the ability to grow more plants per unit of land.
The adaptability of flowering crabapple cultivars to extreme environmental conditions has been monitored for ten years in the Carolina sandhill region. Conditions of summer drought and high temperatures along with late spring freezes have created very stressful conditions. The study initially contained three trees each of 61 cultivars. After ten years, all three trees of the following cultivars were acceptable for non-irrigated landscape uses: Weeping Candid Apple, Red Jewel, Ruby Luster, hupehensis, Robinson, Ralph Shay, Molten Lava and floribunda. The following cultivars lost all three trees after ten years: baccata var. Jackii, yunnanensis, Jewelberry, Dolgo, and Harvest Gold. This study will be terminated due the relocation of the principal investigator.
Two projects are examining plant maintenance issues. One project deals with evaluating methods for repelling deer from nursery and landscape settings, with the goal of improving plant production and maintenance (RI). The other project is evaluating the use of copper paints and copper-treated burlap for the control of rooting out in B&B nursery stock during holding in wholesale and retail yards (RI). In addition, copper polymers are being evaluated for use in controlling circling of plant roots within containers(RI). Plants grown in treated bags and containers have been planted out in the field for evaluation of post-production root growth and plant health .
Objective 2: Evaluate the regional competitiveness within the green industry. A questionnaire was developed, and tested, to use in the third S-290 nation-wide survey of nurserymen. As with the two earlier surveys, the S-290 regional committee is collaborating on this data collection activity. The questionnaires have been distributed to the appropriate researcher in each participating state for distribution to their respective samples in January/February, 1999. Also, TN received all of the mail-back questionnaires for coding and initial data analysis. Once the data are entered and cleaned, state data files with the supporting SAS programming codes will be provided to each collaborating researcher. In 1989 and 1994, 23 and 24 states, respectively, were covered in those surveys. For this new survey, 32 states were included and the combined production from these states represent slightly more than 95 percent of the total U.S. nursery crop production.
This third data set will permit considerable analyses of structural changes in the production and marketing of environmental crops within the U.S.. With data for the calendar years of 1988, 1993, and 1998, researchers will have three sets of cross sectional data at five year intervals. Analyses of adjustments in production by crop groups and growing techniques, wholesale sales by type of market outlet, trade flows of product among states, and other production and marketing factors should help nurserymen when planning the mix and volumes of particular products to produce as well as reasonable identification of targeted market outlets.
Research was conducted to examine the financial structure of the ornamentals nursery and floriculture products sector using annual sales data for 398 firms. For comparison purposes, data for the top 41 firms was collected for the ornamental floriculture and nursery products industry and for the poultry industry, another prominent Southern agricultural industry. When the top 398 firms (each representing more than $2 million in annual grower receipts) in the ornamental floriculture and nursery products sector were examined, the top firm had 6.3% market share, followed by the next four firms having 4.9%, 4.8%, 3.8%, and 2.9% market shares, respectively, of the aggregate sales for the 398 firms. These five firms accounted for about 22% market share; the top 25 firms accounted for 41.66% market share; the top 50 firms accounted for 51.27% market share; and the top 100 firms account for 64.29% market share. These numbers overstate the actual market share, for if $11.4 billion grower receipts for 1997 are used the market share numbers change dramatically. For instance, the top firm’s market share dropped from 6.3% to 1.54%, with the next four firms having market shares of 1.20%, 1.19%, 0.93%, and 0.73%, respectively, for a top five market share of 5.61% of the $11.4 billion market. Similarly, the top 25 firms, 50 firms, and 100 firms accounted for 10.22%, 12.58%, and 15.78% market share, with the 398 firms included in the sample accounting for a combined 24.54% market share.
The poultry industry and the ornamental floriculture and nursery products industry were compared by examining the largest 41 firms in each industry. The top firm in the poultry industry is much more dominant (23% market share versus 14% for the leading nursery). The four firm concentration is 48% for poultry versus 41% for the ornamental floriculture and nursery products, using the 398 firm nursery data.
Objective 3: Evaluate the demand for green industry plants, materials and services. An intercept survey was conducted of 200 self-selected participants at an annual flower show in Detroit, MI. This was one of seven U.S. markets where the survey was conducted. Participants were asked to view a set of 16 digitally altered photographs of a two story home with varying landscapes. Landscape variables included plant size, plant type, and design sophistication. Results showed consumers perceived a 12 percent increase in home value when the home had good landscaping. Six professional landscape companies estimated cost to install the 16 landscape types. Return on investment, where ROI equals differences in perceived value over base house, installation cost, averaged 140 percent for all landscapes which included medium and large plants. A second consumer intercept study investigated consumer perceptions and preferences for 12 traditional flowering pot plants and selected forced perennials. Dimensions identified included flower color, flower form, and traditional indoor, outdoor use.
Survey of home owners was taken in the spring regarding value of pest resistant plants. The survey was in cooperation with other states. The object was to determine whether a customer would be willing to pay more for a plant that had shown evidence of being more resistant to a specific pest or whether the market was limited by the traditional price for the species. If the customer is willing to pay more, plant development individuals would be willing to select and introduce new plants with benefits when knowing their costs could be recovered. New plants could reduce pesticide use/or improve esthetic quality. Results are being tabulated by another participant and no results are published at this time. To have a further understanding of the pricing structure in the nursery industry, data was collected on plant prices over time. Seven species were analyzed for their price trends over the past 125 years by collecting data at five year intervals. Six firms, which had been in operation for most of the time period, were tracked. Data is being analyzed. A budget on the startup and operational costs of a small and large landscape firm were updated with 2000 values.
The business analysis program is an ongoing research and extension effort which seeks to compile financial benchmarks for various horticultural businesses, and teach managers about their application in business management. Data collected for the Florida cut foliage industry for 1997 were published as a UF-FRED Economic Information Report (March 2000), and presented to an industry group (Nov. 1999). Financial data were collected for a sample of 37 wholesale ornamental plant nurseries in Florida for 1998, and results were published as Economic Information Report 00-5 (November, 2000). A presentation “Nursery Business Analysis and Outlook for the Florida Ornamental Plant Industry”, was made to Farm Credit of Southwest Florida (Punta Gorda, Feb. 2000). An educational training program “Landscape Cost Analysis and Job Bidding”, was presented to landscape service professionals at the Central Florida Tree and Landscape Maintenance Conference (Orlando, FL, March 2000), and the Trees Florida 2000 Conference (Tarpon Springs, FL, June 2000).
A marketing study survey of turfgrass sod buyers was conducted for the eastern United States (mid-1999) and the Central US (mid-2000). Results of the study were published as a UF-FRED Economic Information Report 00-2 (April 2000) and in Acta Horticulturae, 536: 499-505 (Sept. 2000). A presentation “Demographic Trends Relevant for Sod Producers in the New Millennium”, was made at the annual meeting of Turfgrass Producers International (San Antonio, TX, Feb. 2000).
As part of an Extension State Major Program on Business Management for Florida's Horticulture Enterprises, we sponsored an educational program for growers entitled "Surviving A Tax Audit", Orlando, FL, June 28, 2000, in which an expert on tax law informed nursery growers about coping with tax reporting requirements. Also sponsored two in-service training programs for University of Florida agricultural extension agents. A program entitled "The Labor Labyrinth", held in Orlando, FL, Oct. 18, 1999, provided information on the continually evolving rules for employers. A program entitled "Determining Asking Price", Orlando, FL, Sept 27, 2000, presented techniques for setting prices for products bases on financial statement information.As part of the Economic Impact Analysis Program in the UF Food & Resource Economics Department, we conducted several studies on the impact of agricultural and natural resource industries in Florida. Several publications describing economic impact analysis of the horticulture industry were written. An internet web site was developed to provide publications, Florida economic data, and information on Center projects, services offered, and center personnel (http://www.fred.ifas.ufl.edu/impact). Results of an economic impact study of Florida’s environmental horticulture industry in 1997 were published in the Journal of Environmental Horticulture (Sept 2000) and Acta Horticulturae, and were presented at the annual meeting of the Southern Regional Science Association (Miami Beach, FL, April, 2000), and at the International Society for Horticultural Science (Guernsey, UK, Sept, 2000) A special project was done on economic impacts of the Florida Botanical Gardens and related cultural attractions in Pinellas County, Florida, as requested by Pinellas County Extension, and results were published as a staff paper on our website.
We conducted a consumer intercept stud y using photographs of ten species of perennials; four species of traditional indoor pot plants to develop a perceptual map. More than 200 self-selected participants of the annual Detroit flower show chose to complete the survey, providing us with their p erceptions of the similarity/dissimilarity of the pairs of plants shown. One perceptual map has been developed; we plan to develop additional maps using different segmentation scenarios. We conducted taste studies using six edible flower species with par ticipants from an annual gardening program at the MSU campus. Self-selected participants tasted three species and provided visual, scent, and taste evaluations. We also surveyed professional chefs in the Detroit metropolitan area and student chefs at MSU for their perceptions of these edible flower species. We surveyed 200 self-selected participants at the annual Detroit flower show for their perceptions of landscape value suing digitally altered photographs of a two-storey home. This was part of a seven-state project. Results showed that customers perceived an increase of 10-12% on a $200,000 home which had good landscaping.
Following up on a study of the demand for labor in Florida's turfgrass industry was an examination of associated labor issues affecting turf-related enterprises (FL). A similar project developed a business management oriented teaching case for a small nursery and landscape business (LA). The focus was on an employee empowerment program that moved decision-making closer to the work site. The case used balance sheets and owner description of objectives and implementation to show the firm's changing managerial structure in its attempts to encourage employee initiative and entrepreneurship, thus capturing the potential advantage of a decentralized management style. The case suggests caution since not all managers want to be in an empowered environment, and the learning curve in implementing this system may be a significant factor.
Concentration in the produce/floral distribution system has been documented. Because impacts are expected to vary by company size, a study of the perceived impacts and responses to the pressure of concentration on small and medium sized produce/floral distribution companies was initiated. A literature review covering concentration and strategic planning and strategic response, both inside and outside the food/floral system, was conducted. Research methodology for a national mail survey was identified, a mailing list from the Produce Reporter Company’s Blue Book Services was developed, and a survey instrument focusing on factors identified from the was written.
Research was conducted on consumer perceptions and expectations of garden center products service quality (TX, AL, NC, GA, TN, DE). Data is currently being analyzed.
Effects of consumer advertising and the demand for plants purchased in independent garden centers during the fall marketing season. Consumer surveys were conducted and results indicate that garden center managers could improve the effectiveness of their advertising by focusing on a special promotion event or plant sale.
Quality characteristics consumers consider important when purchasing ornamental plants and estimating how much they will pay for these characteristics. The survey phase of this project was completed. Preliminary findings have been presented at the American Horticulture Society's Annual Meeting and at the Southern Nursery Association's Annual Research Conference.
Objective 4: Evaluate the effectiveness of alternative merchandising techniques. Using a landscape valuation survey in Mississippi, consumers were asked to rate the value added by various landscaping styles to a home in Jackson, MS, the following results were discovered. The use of evergreen-only plant material decreased the value of a $150,000 home by an average of almost $1800. The use of deciduous plus evergreen plant material decreased the value of the home by over $1400. The use of deciduous and evergreen plant material plus color increased the value of the home by over $700. The use of the previous three plus a hardscape increased the value of the home by almost $2500. Use of small plant material decreased the value of the home by over $2700 while use of medium plant material decreased the value of the home by over $500. Use of large plant material increased the value of the home by almost $3300. Use of only foundation-type planting decreased the value of the home by almost $3900. Incorporation of an island-style planting increased the perceived value of the home by over $300. The use of a sophisticated landscape design incorporating several of the above elements increased the perceived value of the home by over $3500. The annual economic impact of the Mississippi horticulture industry is estimated in 3-year intervals, starting 1994. The economic impact is estimated by using the IMPLAN Professional 2.0 software and the annual Mississippi IMPLAN state datafiles (MIG, Inc., 1999). Several measures are used in calculating the economic impact of the industry. First, the outputs of horticulture products grown, processed and distributed in Mississippi. Second, the incomes earned by households because of the new outputs of horticulture products. Third, the employment generated because of the new outputs of horticulture products. In estimating the economic impact of the Mississippi horticulture industry, three components are considered, namely direct, indirect and induced effects. Direct effects are effects in the initial sector under consideration. Indirect effects are those related to the purchase of inputs by the directly affected industry. These indirect impacts extend as each supplier purchases from other suppliers. Induced effects are those related to the purchase of goods and services resulting from wages paid by the directly and indirectly affected business. These induced effects have additional indirect and induced effects as well. Most of the Mississippi horticulture operations were o annual bedding/garden plants, turfgrass, nursery plants, and potted flowering plants. The total sales value of the Horticulture industry used in this analysis is equal to the sum of the cash receipts from floriculture, greenhouse and nursery products grown by operations located in Mississippi. There were 476 greenhouse and nursery operations and 1000 floriculture operations in 1997.