SUSTAINABLE PRACTICES, ECONOMIC CONTRIBUTIONS, CONSUMER BEHAVIOR, AND LABOR MANAGEMENT IN THE U.S. ENVIRONMENTAL HORTICULTURE INDUSTRY

• Sponsoring Institution: National Institute of Food and Agriculture
• Project Status: COMPLETE
• Funding Source: HATCH
• Reporting Frequency: Annual
• Accession No.: 0224221
• Multistate No.: S-1051
• Project Start Date: Oct 1, 2010
• Project End Date: Sep 30, 2015
• Program Code: [(N/A)]- (N/A)

Recipient Organization
UNIVERSITY OF FLORIDA
G022 MCCARTY HALL
GAINESVILLE,FL 32611

Performing Department
Food and Resource Economics

Non Technical Summary
The environmental horticulture industry, also known as the Green industry, includes nursery and greenhouse producers, landscape service providers, horticultural product wholesalers/retailers, and various allied professionals. Nursery and floriculture (greenhouse) crops include a wide variety of ornamental plants for landscaping purposes such as trees, shrubs, ground covers, turfgrass, bulbs, and propagation stock, as well as plants used for interior or patio decoration such as cut flowers and greens, potted flowering plants, foliage plants, and bedding/garden plants. The wholesale value of nursery and floriculture crops in the U.S. is around $18 billion (Jerardo, 2007). Economic impacts of the U.S. Green Industry in 2002, including indirect and induced impacts in other sectors of the economy, were estimated at $148 billion in output or revenues (in 2004 dollars), 1,964,339 jobs, $95 billion in value added, $64 billion in labor income, and $7 billion in indirect business taxes (Hall, Hodges and Haydu, 2005, 2006, 2007). During the past two decades, the Green industry has been one of the fastest growing parts of the agricultural economy in the United States, due to robust demand for ornamentals plants and related services from commercial and residential development and increasing affluence. However, current trends and driving forces indicate that consumer demand is maturing. Obviously, the severe economic recession of 2007-09 has placed considerable financial strain on these businesses. In order for Green industry firms to survive in the long run, managerial decision-making must be based on accurate and timely production and marketing information. In spite of the magnitude and growth in the industry, there is a lack of up-to-date and reliable information on the economic characteristics of the Green Industry. USDA-NASS conducts annual surveys of wholesale growers of floral and nursery crops in selected states, however, recent federal budget cutbacks have forced a drastic reduction in the number of states covered, to only 15. As a consequence, USDA-ERS has discontinued its annual Situation and Outlook reports on the nursery and greenhouse industry, with the result that stakeholders in many states with a significant industry presence are disenfranchised. The Census of Agriculture, conducted every five years, is comprehensive in scope, but lacks meaningful detail on nursery and greenhouse producers. The Census of Horticultural Specialties, conducted approximately every 10 years, as a supplement to the Census of Agriculture, provides considerable detail on specific products and market channels, but is too infrequent to be of use to most industry professionals. Work under this project will complement ongoing efforts of other organizations to provide current production and marketing research for the U.S. nursery and greenhouse industry, such as the USDA-ARS Floriculture and Nursery Crops Initiative, the USDA Federal/State Marketing Improvement Program, the Horticulture Research Institute, the American Floral Endowment, and the Specialty Crop Research Initiative.

Animal Health Component

(N/A)

Research Effort Categories

Basic

(N/A)

Applied

(N/A)

Developmental

(N/A)

Classification

Knowledge Area (KA)	Subject of Investigation (SOI)	Field of Science (FOS)	Percent
601	2199	3010	40%
603	6110	3010	40%
604	2199	3010	20%

Knowledge Area
601 - Economics of Agricultural Production and Farm Management; 603 - Market Economics; 604 - Marketing and Distribution Practices;

Subject Of Investigation
6110 - Economy of the United States and sectors thereof; 2199 - Ornamentals and turf, general/other;

Field Of Science
3010 - Economics;

Keywords

economic contributions

sales

output

value added

employment

impact analysis

economic multipliers

marketing margins

input-output models

implan

survey

Goals / Objectives
Objective 2: Evaluate economic contributions of the green industry This objective seeks to evaluate the structural economic characteristics and contributions of the Green industry to the national and state economies of the United States through survey research and regional economic modeling. Specifically, the project will: determine the marketing and management practices of wholesale and retail nursery firms; identify structural changes and/or trends; evaluate regional competitiveness within the ornamental plant industry; and evaluate to total regional economic contributions of the Green industry. The results of this study will provide industry stakeholders with information to help identify and quantify the extent of various on-going structural adjustments, and will inform industry professionals regarding future expansion plans, selection of product portfolios and production methods, and market outlets. The national survey data sets generated will provide input for scientific investigation that is not available from any other source, and will greatly supplement the breadth and depth of information provided by USDA-NASS. By using regional economic models, the project will evaluate the secondary economic impacts (multiplier effects) of the Green industry that are generated through the supply chain of input purchases and household spending by industry employees. This will provide a more complete reckoning of the importance and linkages of the Green Industry. Many states and industry organizations have found these impact studies to be useful in communicating the importance of the Green Industry to policy makers, regulators, investors and the public at large, particularly in relation to issues such as environmental regulations, water usage, and work force immigration.

Project Methods
This objective of the project will encompass several studies to estimate the economic impacts of the Green industry nationally and at the state and region level, based on primary survey information together with secondary industry statistics. The two principal studies planned for the first two years of the project are a national survey of nursery and greenhouse producers, and an economic impact analysis of the Green industry. The third year of the project will be dedicated to outreach activities for Green industry stakeholders, researchers, and extension professionals. Primary market research data on the nursery and greenhouse sector will be gathered through a national survey of wholesale producers. Lists of nursery and greenhouse producers throughout the U.S. will be compiled from industry associations, extension professionals, and state phytosanitary regulatory agencies. Where possible, firms will be classified by size. A stratified sampling plan will be developed based on firm size, with greater sampling intensity for larger firms. A total of about 18,000 firms or roughly one-third of the population will be surveyed, depending upon budget constraints. Surveys will be conducted via mail, with at least two mailings, including survey forms, cover letters from the investigators and return envelopes. Completed surveys will be identified by code numbers so that sample data can be expanded to estimate values for the industry population. The complete data set will be made available to the entire project team for use in various analyses and publications. Primary survey information for nursery and greenhouse producers will be augmented with secondary sources such as the Economic Census for 2007, to evaluate the contributions of landscape services and marketing/trade sectors of the Green industry. Using these primary and secondary data sources, we will estimate the broad regional economic impacts of the Green industry, including estimates for producers (growers), service providers (landscape installation and maintenance), and marketing/trade sectors. Regional economic models for the Green industry will be developed for each state of the U.S. using the IMPLAN (Impact Analyses for Planning) Professional software and associated regional datasets (MIG, Inc.). In this input-output, Social Accounting Matrix (IO-SAM) framework, regional models account for commodity production, industry output, employment, income, transfer payments, taxes and capital investment, for over 500 industry sectors, resident households, and governments, in any county or multi-county region of the United States. Economic multipliers derived from these models estimate total contributions to the regional economy in terms of output (revenues), employment, and value added or income, including direct effects that represent the initial value of the industry in question, indirect effects of supply chain input purchases, and induced effects of local spending by employee households. Results of the national survey and economic impact analysis will be disseminated in two separate publications, made available in both print and electronic form on internet websites.

Progress 10/01/14 to 09/30/15

Outputs
Target Audience:Nursery and greenhouse producers Landscape service professionals State nursery and landscape industry associations State and local government agencies Elected policy makers US Department of Agriculture Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest?Project findings are routinely disseminated through peer-reviewed journal articles and state extension publications. What do you plan to do during the next reporting period to accomplish the goals?Further analysis of the National Green Industry Survey will be conducted to evaluate trends in specific industry practices.

Impacts
What was accomplished under these goals? A national survey of the U.S. environmental horticulture or "Green" industry was conducted in 2014, and results were published in 2015 in two journal articles and several state reports. An economic contribution analysis of the U.S. Green industry was accomplished, and results were published in peer-reviewed journals and individual state extension publications. These products helped to inform industry stakeholders about production and market trends, in support of business decision-making to enhance profitability and sustainability. The studies also served to educate policy-makers and the public at large about the role and importance of the Green industry in local, state, and national economies, in support of informed public policy.

Publications

• Type: Journal Articles Status: Published Year Published: 2015 Citation: Hodges, A.W., H. Khachatryan, M.A. Palma, and C.R. Hall. Production and Marketing Practices and Trade Flows in the United States Green Industry in 2013. Journal of Environmental Horticulture, vol. 33(3):125136, Sep. 2015.
• Type: Journal Articles Status: Awaiting Publication Year Published: 2015 Citation: Fisher, P.R., J.C. Vallejo, A.W. Hodges and C.R. Hall. Tracking Losses in Floriculture Crop Production. Acta Horticulturae. In press.
• Type: Journal Articles Status: Accepted Year Published: 2016 Citation: Khachatryan, H., A.W. Hodges, M.A. Palma and C.R. Hall. Inter-regional Trade Flows Within the U.S. Nursery Industry. Submitted to Journal of Environmental Horticulture, accepted with minor revision, Dec. 2015.
• Type: Conference Papers and Presentations Status: Published Year Published: 2015 Citation: Hodges, A.W., C.R. Hall, M.A. Palma and H. Khachatryan. Update on the State of the Green Industry: 2014 National Nursery Survey Results. SNA Research Conference Proceedings, vol. 60, 5 pages, 2015.
• Type: Other Status: Published Year Published: 2015 Citation: Hodges, A.W., H. Khachatryan, C.R. Hall and M.A. Palma. Benchmarking your Business: Take aim. Nursery Management magazine, April 2, 2015.
• Type: Other Status: Published Year Published: 2015 Citation: Hodges, A.W., H. Khachatryan, C.R. Hall and M.A. Palma. Production and Marketing Practices and Trade Flows in the United States Green Industry, 2013. Southern Cooperative Series Bulletin 420, May 26, 2015, 61 pages, available at greenindustryresearch.org.

Progress 10/01/13 to 09/30/14

Outputs
Target Audience: Target audiences for this program include wholesale nursery growers, landscape services providers, horticultural retailers,allied industry professionals, and industry associations. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest? The results of this project were disseminated to stakeholder groups through industry magazines, websites, online tools, electronic publications and presentations at meetings and conferences. What do you plan to do during the next reporting period to accomplish the goals? During 2015, additional articles on financial analysis and management will be written and developed as an online training program developed with colleagues in the University of Florida Department of Environmental Horticulture. Analysis of the sixth National Green Industry Survey will be completed, and a report on the survey finding will be written and submitted for publication as a Southern Experiment Station Bulletin, as well as refereed journal articles. An updated economic contribution analysis of the U.S. green industry will be completed, and submitted for journal publication.

Impacts
What was accomplished under these goals? During this project period (Oct 2013-Sep 2014), the investigator had the following accomplishments: 1. Coauthored two electronic extension documents on the economic outlook for nursery and floriculture crops and the landscape services industry in Florida in 2014 (see publications). 2. Updated a website for financial benchmark analysis of wholesale nurseries (see other products). 3. Continued development of an online tool for nursery crop production simulation and cost analysis (see other products). 4. Prepared and recorded a webcast presentation on the economic outlook for the nursery and landscape industry in Florida (see other products). 5. Made two presentations on business and financial management for industry group workshops. 6. Obtained grant funding of $34,000 from Horticultural Research Institute for a project entitled "An assessment of national and regional trends in production and marketing practices in the US nursery and greenhouse industry". 7. Made revisions to a questionnaire and compiled mail and email lists of industry firms, and conducted a national survey of wholesale and retail nursery firms (see other products). This was the sixth National Green Industry Survey conducted by this multi-state project at five-year intervals over the past 30 years. The survey provides critical time-series information on production, marketing and management practices in the industry that is not available from any other source. The data is also used for an economic contribution analysis of the industry. These products and outputs will enable Green industry owners, managers and allied professionals to achieve greater productivity, efficiency, profitability, environmental sustainability, and regulatory compliance in their business operations.

Publications

• Type: Other Status: Other Year Published: 2014 Citation: Khachatryan, Hayk, Alan W. Hodges, Mohammad Rahmani and Thomas J. Stevens. Investigation of economic impacts of Floridas highway beautification program. Sponsored project report to Florida Department of Transportation, University of Florida, Institute of Food and Agricultural Sciences, 44 pages, May 2014.
• Type: Book Chapters Status: Published Year Published: 2014 Citation: Behe, Bridget K., Alan W. Hodges, Julie P. Newman, Trent Teegerstrom, P. Kenkel and Ursula K. Schuch. Chapter 18, Business Management Basics, in Container Nursery Production and Business Management Manual, J. Newman, Technical Editor, Publication 3540, University of California Division of Agriculture and Natural Resources, pages 269-291, June 2014.
• Type: Other Status: Published Year Published: 2014 Citation: Khachatryan, H., Alan W. Hodges and Shawn Steed. Floriculture crops economic outlook for 2014. Electronic Document Information System publication FE941, University of Florida, Institute of Food and Agricultural Sciences, 15 pages, March 2014, available at http://edis.ifas.ufl.edu/pdffiles/FE/FE94100.pdf.
• Type: Other Status: Published Year Published: 2014 Citation: Khachatryan, H. and Alan W. Hodges and Shawn Steed. Florida nursery crops and landscaping industry economic impacts, situation, and outlook. Electronic Document Information System publication FE946, University of Florida, Institute of Food and Agricultural Sciences, 10 pages, Sep. 2014, available at http://edis.ifas.ufl.edu/pdffiles/FE/FE94600.pdf.

Progress 10/01/12 to 09/30/13

Outputs
Target Audience: Target audiences for this program include wholesale nursery growers, landscape services providers, horticultural retailers, allied industry professionals, and industry associations. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest? The results of this project are disseminated to stakeholder groups through industry magazines, websites and online tools. What do you plan to do during the next reporting period to accomplish the goals? During 2014, additional articles on financial analysis and management will be written and developed as an online training program. The sixth National Nursery Survey will be completed using a combination of mail and internet survey samples. A report on the national survey will be written and submitted for publication as a Southern Experiment Station Bulletin, as well as refereed journal articles. Also, an economic contribution analysis of the U.S. green industry will be completed.

Impacts
What was accomplished under these goals? During this project period (Oct 2012-Sep 2013), the investigator had the following accomplishments: 1. Coauthored two articles on nursery financial management for the industry magazine OFA Bulletin. 2. Updated a website for financial benchmark analysis of wholesale nurseries 3. Continued development of an online tool for nursery crop production simulation and cost analysis. 4. Prepared a recorded webcast presentation on the economic outlook for the nursery and landscape industry in Florida. These products will enable nursery industry owners and managers to achieve greater productivity, efficiency and profitability in their operations. In addition, the investigator completed revisions to a questionnaire and compiled mailing lists of industry firms for a national survey of wholesale and retail nurseries to be conducted in 2014. This will be the sixth such national survey conducted by this multi-state project at five-year intervals over the past 30 years. The survey provides critical time-series information on production, marketing and management practices in the industry that is not available from any other source. The data are also used for an economic contribution analysis of the industry.

Publications

• Type: Other Status: Published Year Published: 2013 Citation: Fisher, P., A. Hodges, B. Swanekamp and Charlie Hall. Are your crops making money? Using enterprise budgets to calculate costs and profit. OFA Bulletin, pp. 1, 3-6, July/August, 2013.
• Type: Other Status: Published Year Published: 2013 Citation: Fisher, P., A. Hodges, B. Swanekamp and Charlie Hall. Seasons, space and shrinkage affect production costs. OFA Bulletin 937, pp. 14-18, Jan/Feb. 2013.
• Type: Other Status: Published Year Published: 2013 Citation: Hodges, A.W., M. Rahmani and T.J. Stevens. Economic contributions of agriculture, natural resources, and related food industries in Florida in 2011. University of Florida-IFAS Extension publication FE935, Gainesville, 40 pages, June 2013, available at http://edis.ifas.ufl.edu/fe935.

Progress 10/01/11 to 09/30/12

Outputs
OUTPUTS: Completed projects on economic contributions of the environmental horticulture industry in the U.S. and California, with partial sponsorship of the Horticultural Research Institute and California Landscape Contractors Association. Continued development of a web-based economic decision support tool for container nursery management, under sponsorship of the Florida Nursery Growers and Landscape Association Endowed Research Fund (with Tom Yeager). Made presentations as follows: Hodges, A.W. Measure what you manage: Analyzing your business for bottom-line results. Winfield Risk Management Seminar Series in Tampa, Apopka, Homestead, Florida, July 31-Aug. 2, 2012; audience=150. Market trends in the nursery and landscape industry. Tampa Bay Wholesale Growers, Plant City, FL, Nov. 8. 2011, audience=30. Marketing and bidding for horticultural products and services. Workshop at Miami-Dade County Extension, Oct. 25, 2011, audience=25. PARTICIPANTS: Sponsors for this program include the Horticultural Research Institute, Florida Nursery Growers and Landscape Association, and the California Landscape Contractors Association. TARGET AUDIENCES: Target audiences for this program include wholesale nursery growers, landscape services providers, horticultural retailers, allied industry professionals, and industry associations. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
Findings from this program were used by industry organizations, policy-makers, and UF/IFAS research and extension personnel to better understand and communicate to the public the important contributions of environmental horticulture to the economy of Florida and other states. Electronic documents authored by Hodges on the UF/IFAS EDIS website received a total of nearly 45,000 accessions (hits) in 2011-12.

Publications

• Hall, C.R. and A.W. Hodges. Economic, environmental and well-being benefits of lifestyle horticulture. Chronica Horticulturae 51(4): 5-8, Dec. 2011.
• Hodges, A.W., C.R. Hall and M.A. Palma. Economic contributions of the green industry in the United States in 2007-08. HortTechnology 21(5): 628-638, Oct. 2011.
• Palma, M.A., A.W. Hodges and C.R. Hall. Economic contributions of the Green industry to the California economy, 2007. Sponsored project report to the California Landscape Contractors Association, 21 pages. Oct. 2011.
• Barret, C., X. Zhao and A.W. Hodges. Cost-benefit analysis of using grafted transplants for root-knot nematode management in organic heirloom tomato production. HortTechnology vol. 22(2), pages 252-257, Apr. 2012.
• Cho, A., A.W. Hodges and C. Chase. Partial budget analysis of summer fallows for organic nutrient and weed management in Florida. HortTechnology vol. 22(2), pages 258-262, Apr. 2012.

Progress 10/01/10 to 09/30/11

Outputs
OUTPUTS: Completed following projects in 2010-11: Economic analysis of alternatives to methyl bromide for weed and pest control on golf courses. Economic contributions of the green industry in the United States, 2007. Economic contributions of the Florida environmental horticulture industry in 2010. Economic contributions of the Green industry to the California economy, 2007. Economic Impacts of a $30 million Investment in Highway Beautification in Florida. Made presentations at following conferences: Economics and business management in the nursery industry. Workshop by Association of Florida Native Nurseries, Kissimmee, FL, Jan. 28, 2011, audience=75. Economic indicators for the turgrass industry. Turfgrass Producers International midwinter conference, Orlando, FL, Feb. 2011, audience=200. Economics and business management in the nursery and landscape industry. Rhode Island Nursery and Landscape Association. Providence, RI, Mar. 16, 2011, audience=20. Economic contributions of the environmental horticulture industry in Florida in 2010. The Landscape Show, Florida Nursery Growers and Landscape Association, Orlando, FL, Sep. 29, 2011, audience=150. Marketing and bidding for horticultural products and services. Workshop at Miami-Dade County Extension, Oct. 25, 2011, audience=25. Market trends in the nursery and landscape industry. Tampa Bay Wholesale Growers, Plant City, FL, Nov. 8. 2011, audience=30. Obtained total funding of $132,375 in support of these projects n 2011. PARTICIPANTS: Thomas J. Stevens, postdoctoral research associate, and Mohammad Rahmani, coordinator of economic research. See list of publications for other collaborators. TARGET AUDIENCES: Industry organizations. Individual agricultural producers. Local and state policy-makers. Agricultural media. Extension agents and researchers. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
Findings from this program were used by industry organizations, policy-makers, and UF/IFAS research and extension personnel to better understand and communicate to the public the important contributions of environmental horticulture to the economy of Florida and other states. Electronic documents authored by Hodges on the UF/IFAS EDIS website received a total of nearly 20,000 accessions (hits) in 2011.

Publications

• Hall, C.R. and A.W. Hodges. Economic, environmental and well-being benefits of lifestyle horticulture. Chronica Horticulturae 51(4): 5-8, Dec. 2011.
• Hodges, A.W., T.J. Stevens, M. Rahmani and H. Khachatryan. Economic contributions of the Florida environmental horticulture industry in 2010. Sponsored project report to the Florida Nursery Growers and Landscape Association. 40 pages, Sept. 2011; available at www.fred.ifas.ufl.edu/economic-impact-analysis.
• Rahmani, M. and A.W. Hodges. Economic impacts of citrus production in the Conserv II area in central Florida. Report prepared for Carl Fabry and Rex Clonts, 4 pages, July, 2011.
• Rahmani, M. and A.W. Hodges. Economic Impacts of a $30 million Investment in Highway Beautification in Florida. Report prepared for Florida Nursery Growers and Landscape Association, February 2011.
• Hall, C.R., A.W. Hodges and M. Palma. Sales, trade flows and marketing practices within the U.S. nursery industry. Journal of Environmental Horticulture 29(1): 14-24, March 2011.
• Hodges, A.W., C.R. Hall and M.A. Palma. Economic contributions of the green industry in the United States in 2007-08. HortTechnology 21(5): 628-638, Oct. 2011.
• Hodges, A.W. Economic analysis of alternatives to methyl bromide for weed and pest control on golf courses. Sponsored project report to the U.S. Department of Agriculture, Sep. 2011.
• Hodges, A.W., C.R. Hall and M.A. Palma. Economic contributions of the green industry in the United States, 2007. Southern Cooperative Series Bulletin 413, Southern Association of Agricultural Experiment Station Directors, 66 pages, May 2011; available at www.greenindustryresearch.org.