Home Annual Reports Overview Cooperators Accomplishments Usefulness Work Plan Publications	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, 2002  Project S-290 (formerly S-103): Technical and Economical Efficiencies of Producing and Marketing Landscape Plants PROGRESS OF THE WORK AND PRINCIPAL ACCOMPLISHMENTS: Solid progress was made in the four major project objectives: (1) evaluate alternative green industry plant production, establishment, and maintenance systems, (2) evaluate the regional competitiveness within the green industry, and (3) evaluate the demand for green industry 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 22 states, including 12 of these states 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. Numerous articles, bulletins, and other publications were published. Objective 1: Evaluate alternative green industry plant production, establishment and maintenance systems. On May 23, sedum plugs (72's that were 1.5 inches wide x 3 inches deep) were planted into circular pots in a highly porous, expanded clay-based medium (dry bulk density = 42lbs/cubic ft.) suitable for green roofs. Pot dimensions were 14 inches wide and 5 inches deep and were originally designed as hanging basket containers. After the plugs were transplanted planted, each pot received 10 g of surface applied Osmocote 14-14-14 and were watered in. Plant varieties are as follows: Delosperma aberdeenense, Delosperma nubigium, `Basutoland', Sedum acre `Aureum', Sedum album, Sedum album `Murale', Sedum floriferum `Weinenstephaner Gold', Sedum reflexum, Sedum sexangulare, Sedum spurium `Fuldaglut, `Sedum spurium `Roseum'. There were 10 plant varieties, each with 3 replicates. Pots were arranged in a completely randomized experimental design. On May 20, and at 2-week intervals each pot will be photographed. Photos were transferred to Adobe Photoshop, sized, printed, and the outline of each plant cut out and weighed to determine a relative growth rate for each taxon. Phase II: On 20 September 2002 all pots were moved into a Penn State Horticulture Department greenhouse for controlled drought stress. Initially, all pots were brought up to pot (field) capacity. Then, every pot was weighed daily for 19 days. At the end of this cycle, all pots were immersed in water until fully saturated, drained for 3 hours, then re-weighed. 24h later pots were again immersed, drained for 3 hours and weighed. Pots were then weighed daily for 19 days and the saturation procedure described above was repeated. Researchers (at the University of Rhode Island) installed a 30'x100' computer-controlled microirrigation system with 12 independent irrigation zones. All irrigation water applied in this system is recaptured and allows for water quality analysis. This facility will be used in 2003 and future years to evaluate irrigation methods and container media to optimize low-water use container culture in the northeast. RI continues to evaluate the growth and marketing requirements of new, sustainable plant species for introduction to the nursery industry. More than 100 accessioned trees and shrubs were planted in 2002. Individual studies on 48 pesticide crop combinations were initiated in 2002. The studies were selected from the IR-4 high priority list that was developed at the Ornamentals Workshop in Houston. The workshop results represent input from pesticide manufacturers, formulators, ornamental crop producers, and ARS and land grant university scientists. These projects included insecticides, herbicides and plant growth regulators. The pesticides studied represent new chemistries and compounds that have a lower use risk than currently labeled products. Analysis of survey data collected from nurserymen in several states continues to be fruitful. Because there is limited information currently available regarding the economics of producing nursery crops using the pot-in-pot production system, two case studies were used to compare the costs of producing three species with in-ground, above-ground, and pot-in-pot production systems. A compendium of up-to-date guidelines that will assist greenhouse managers in making more informed decisions regarding their production and marketing-related business practices was developed. A section discussing major driving forces affecting the greenhouse industry is followed by sections specifically addressing marketing, personnel management, portfolio (product mix) management, materials handling and distribution, equipment procurement, cost accounting, pricing, and financial management. The financial opportunities associated with distribution of university-patented nursery products was simulated in a cooperative game created to estimate a fee and predict the behavior of nursery growers and nursery product retailers. Objective 2: Evaluate the regional competitiveness within the green industry. While greenhouse production is a growing industry in New York, competition from other states and countries is growing stronger. To stay competitive, it is essential to develop management and business analysis competency among New York greenhouse businesses. A greenhouse business analysis instrument in Excel format was designed by Uva and Richards in October, 2000 to collect financial information and perform business analysis for greenhouse operations. Our goals are to establish financial performance benchmarks and trends for the greenhouse industry, providing education to improve the record keeping and financial management skills of greenhouse managers, and to use the collected data to analyze factors important to profitability of greenhouse businesses.In 2001, 31 greenhouse businesses throughout New York State provided their 2000 business records to participate in the project. Each of the participating greenhouse businesses received a customized business analysis report after the initial visit and a follow-up visit to review the report. They also received the annual greenhouse industry benchmark report in March 2002. The industry benchmark report analyzed the greenhouse industry data according to marketing methods and business characteristics. An enterprise budget program designed in Excel format has been developed to help greenhouse growers analyze the costs of producing a specific crop and can be downloaded from the Cornell Horticultural Business Management and Marketing web-site at http://hortmgt.aem.cornell.edu/. Results of this project were presented at numerous extension and research meetings in 2002. The project expanded to include 47 greenhouse businesses from New York and Pennsylvania in 2002. An annual report analyzing industry financial performance benchmarks and trends will be completed in March 2002. A searchable web-based database is being developed to collect data and present results in 2003, and additional greenhouses are being recruited in New Jersey and Michigan for future studies. Data to support analysis of adjustments in marketing and management practices of wholesale and retail firms will continue to be obtained by mail survey techniques. A review of the survey instrument was initiated in 2002. Nearly all states in the S-290 project provided assistance in distributing the survey. Final changes will be made in 2003 with planned distribution in January, 2004. University Poinsettia Trials were organized by Louisiana State University. This study measured the performance of 25 cultivars in multiple states. The plants were also evaluated by the general public. Determining consumer preferences in combination with determining good varieties for production in the south will enable Mississippi growers to produce high quality poinsettias with high consumer acceptance. Several states participated in this study. A survey of technical Information requirements for Hispanic nursery employees conducted in Oregon and Ohio was completed in 2002. In Oregon and Ohio 375 and 250 surveys, respectively were distributed to Spanish-speaking nursery employees. In Oregon 193 and in Ohio 127 were completed. The purpose of these surveys was to determine the backgrounds, experience level and work activities of nursery workers, their technical information interests, and what resources are available to these workers. Differences were discovered between the Hispanic work force in Oregon and Ohio in backgrounds, years of experience, work activities, technical topics of interest and current resources available. Objective 3: Evaluate the demand for green industry plants, materials and services. Analysis of survey data collected from nurserymen in several states continues to be productive. Growers may utilize this information in making decisions regarding the type of market outlet they will emphasize in attempting to develop sustainable competitive advantage in the marketplace. Recognition of structural shifts in regional demand is imperative in today's dynamic green industry. As growers respond to the dynamic market place where they are competing for sales with growers in other regions, the ability to satisfy the needs of the targeted outlets becomes increasingly critical. The trend toward more sales through mass merchandisers (and home centers) will probably continue, and the key factors here are large volume requirements at very competitive prices. Nurseries focusing on landscapers and garden centers will need to emphasize plant quality and convince buyers that the higher quality is present and worth the higher price usually necessary in these outlets versus the mass merchandisers. Because of the limited information currently available regarding the economics of producing nursery crops using the pot-in-pot production system, two case studies were used to compare the costs of producing three species with in-ground, above-ground, and pot-in-pot production systems. A compendium of up-to-date guidelines that will assist greenhouse managers in making more informed decisions regarding their production and marketing-related business practices was developed. A section discussing major driving forces affecting the greenhouse industry is followed by sections specifically addressing marketing, personnel management, portfolio (product mix) management, materials handling and distribution, equipment procurement, cost accounting, pricing, and financial management. The financial opportunities associated with distribution of university-patented nursery products was simulated in a cooperative game created to estimate a fee and predict the behavior of nursery growers and nursery product retailers. Research programs on horticultural economics includes business analysis of ornamental plant nurseries in Florida, analysis of economic structure and development, marketing, and evaluation of technologies for plant production. This work involved survey research to collect economic information from businesses. Research activities for the horticulture industry: Economic impact of horticulture and other sectors of agriculture using primary survey data and the Implan input-output modeling software; Market survey research for turfgrass, ornamental plants, and related horticultural products. Research, client service, and extension education on business analysis for horticultural production were provided. Market expansion strategies for turfgrass producers in the western U.S. Economic impact of Florida's nursery industry was completed. Economic impact of Florida's golf course industry was completed. Operating cost study of the Florida horticulture industry is underway. Under the Economic Impact Analysis Program in the UF Food and Resource Economics Department, we conducted studies on the impact of horticulture and other Florida agricultural industries. An economic impact study of Florida's environmental horticulture industry in the year 2000 was completed in 2002. An economic impact study of the Florida golf industry was also completed in 2002. A 3-year project entitled Market Expansion Strategies for Turfgrass Producers in the United States, funded by the International Turf Producers Foundation, was completed in 2002. This work sought to develop recommendations for increasing overall demand for turfgrass. Other institutions may adapt the survey instruments developed in t his study. There has been continuing interest in measuring the contribution of the green industry to Louisiana's economy. In 1997, an input/output model (IMPLAN) was used to estimate that the contribution was about $1.3 billion. With economic growth and change, those results are outdated. Researchers updated and improved the study through better and more thorough methodology. Sectors included were nursery and sod producers, landscape design, installation, and maintenance (LDIM), and golf. Other areas of economic activity conduct significant landscape maintenance that should be attributed to the green industry. These include churches/cemeteries, public and private schools (elementary through university), parish/city grounds and parks, state parks and recreational areas, road shoulder maintenance, airports, construction industries, and real estate. Consumer retail expenditure on nursery industry products was included. Surveys were conducted to verify or update the IMPLAN data set, and were mailed to those sectors where secondary data was not available. Regular mail was the dominant approach, but email surveys were used when it appeared feasible. Dillmans methodology was followed. Generally, the information sought in surveys was sector revenue, expenditures and employment. Target population lists were from several sources, including Louisiana Department of Agriculture and Forestry, the American Business Directory, state agency lists, and internet sources. Responses were used when appropriate to generate sector outputs. The grower and service sectors, golf, retail, and a combined model for industries with significant green industry links, were modeled individually. For results, multipliers generally were between 1.5 and 2. The Production sector's total economic impact measured in gross sales was estimated at $605million, while the total economic impact on personal income, gross state product and employment were $246 million, $385 million, and 15,160 jobs, respectively. For other industries, the gross sales and employment impacts, respectively, were Retail ($557.16 million, 14,218); and golf ($202.43 million, 4,018). The overall impact was estimated at $2.5 billion and 47,776 jobs. Work continued with collecting price and plant data from nurseries. Using catalogs on file at the Bailey Hortorium, Cornell Univ. and the Andersen Library, Univ. of Minnesota and several nurseries were selected which had been in operation in excess of fifty years. In a few cases catalogs were available for over 100 years. A few diverse species were selected which were available over this entire span. Species included: red and sugar maple, white ash, P.G. hydrangea, A. W. spirea, Norway spruce, viburnum, California privet, etc. Price data were collected at five-year intervals over this period of time except for recession years when in was collected annually for a period. This data should indicate the change in pricing over time and its relation to inflation. The same information was collected from eight nurseries for a period from the mid 1980's until the present. This price data were collected on an annual basis. Data should give an indication to the price changes during the dramatic growth phase of the industry and its reponse to the recession of the early 1990's. The data collected from 2001 and 2002 are currently being analyzed. Initial observations indicate recessions have a definite impact on the price of nursery stock. Bermudagrass remains the most profitable warm season grass when compared to centipede and zoysia--the 4-6 month versus 14-16 month production cycle is critical. Bermuda's average market price of $1.05 per sq. yd. is $.10 above breakeven price for 100 or so acre operations and $.28 above for 1,000 or so acre operations. Start-up capital investment for the 100-acre farm averages $5,000 per acre while it is $3,000 per acre for the 1,200 farm. Total costs approximate $3,550 per acre for the smaller farm and $2,700 for the larger farm. Cash flow analyses indicate that most smaller turfgrass farms will not realize a profit until the sixth year of operation, while large farms typically generate a profit by the third year. Objective 4: Evaluate the effectiveness of alternative merchandising techniques. One alternative to traditional Christmas trees could be developed from popular firs and pines. This study was initiated to determine consumer preferences and marketability for six evergreen tree species, using three decoration themes, and three price points. Conjoint software generated 27 alternatives from the 6 x 3 x 3 orthogonal design. A web-based survey was conducted using a sample of 5000 potential participants purchased from a national survey sampling firm. The 230 participants were compensated with a $5 e-coupon. The conjoint model accounted for 91.2% of the variance, indicating it accounted for most of the variation in consumer preferences. Consumers valued species as the most important attribute (61% of the consumer's preference) with decoration color/theme the second most important feature (27%) and, lastly, price (12%). Black hills spruce was the most preferred species overall. Consumers preferred the red-theme decoration and, logically, the lowest price point. When consumers were divided into age groups, we discovered their preferences for price point varied. The price was the most important attribute for those participants under age 25. The importance of price decreased as participant age increased until 60 where price again became more a more important component. In a separate study designed to investigate consumer perceptions of new flowering woody shrubs positioned as potted flowering plants, we chose 15 flowering plants based on their differences in use (indoor or outdoor), plant habit or form, and flower-color for a web based study conducted in May, 2002. Three plants were florist flowering plants: azalea, florist hibicus, and florist hydrangea. Six plants were perennials: campanula, delphinium, euphorbia, geum, lauentia, sisycrisum. Six plants were flowering shrubs: hibicus, hydrangea, itea, wine and roses, and syringa (two forms). Consumer perceptions were measured with a semantic differential scale, which consisted of bipolar adjective pairs that anchor either end of a set of numbers. We asked participants to evaluate perceived similarities in pairs of flowering plants. When bipolar adjective pairs were most similar, they received a rating of 1, and dissimilar plants received a rating of 7. By transforming participants' judgments of similarity into distances represented in a multidimensional space, the plants were visually clustered on a grid or perceptual map. A protocol was presented for the introduction of new plants that have patents, copyrights, or trademarks into the marketplace. The potential of a market, its growth rate, and the shape of the product life cycle provide key insights into current and future market demand, the foundation of a successful (profitable) plant introduction. A market share index related to promotion, product, price, and place was developed to: (1) identify important sources of lost market share opportunity, (2) provide a mechanism to assess changes in market share and trace the change to one of the four P's, and (3) estimate market share potential. Pricing issues were addressed as they related to price sensitivity, product positioning, and the competitive environment. Firms holding a proprietary product advantage should consider either a skimming or penetration pricing strategy depending on their goals. The steps of the suggested protocol are idea inception, product definition, technical review, market evaluation, economic evaluation, company evaluation, product reevaluation, prototype production, market plan redefinition, test marketing and evaluation, product launch, and actual market evaluation and modification.