Nurseries report resurgence of plant sales
By Kate Campbell
Ornamental nursery crops lead San Diego County agricultural production, but the recession hit the nursery business hard.
This spring, however, growers like Donnie Dabbs of Briggs Tree Co., say business has improved significantly.
Demand for ornamental landscaping plants this spring has been strong enough to create some supply gaps, said Donnie Dabbs general manager of Briggs Tree Co. in San Diego County. He says nursery growers are “potting up” as fast as they can to meet demand and increase the variety of available garden options.
A mild spring, an improved economy, pent-up demand and a strengthening real estate market have combined to yield what California wholesale nurseries and garden centers call their best sales volumes in years.
Nursery owners say they're seeing long-time property owners embarking on garden renovations, including installation of new irrigation systems and drought-tolerant plants, while homeowners who've recently purchased foreclosed or distressed properties are sprucing up neglected landscaping.
"For some homeowners, looking at the landscaping they've had for years is like looking at avocado shag carpeting from the '70s," said Donnie Dabbs, general manager of Briggs Tree Co. in San Diego County. "Some homeowners find their gardens are out of style and they're redoing them."
Family-owned Briggs Tree Co. grows ornamental plants and trees on about 200 acres and serves Southern California landscape contractors, commercial property managers and the public. The company also ships plants to Arizona, Florida, Texas, Nevada and Washington.
"It looks like foreclosure properties have been gobbled up and we're starting to see new construction activity," Dabbs said. "But during the past few years, plant inventories went way down because of the recession; growers didn't pot up. We're trying to catch up and fill the gaps with better selection."
Because California's billion-dollar nursery sector is closely tied to the real estate market, growers cite market recovery as a significant force behind the rebound they're seeing in sales of ornamental plants and landscaping material. California growers account for about 20 percent of the nation's total value of nursery plants.
February was the 12th consecutive month in which the state's median home sales price increased year-over-year, according to real estate analysts at Data Quick. Of the existing homes sold last month, Data Quick reported that 17.5 percent had been foreclosed on during the past year. Analysts said in February 2009, nearly 60 percent of homes sold were in foreclosure.
"Indicators of (real estate) market distress continue to decline," Data Quick analysts said. "Foreclosure activity remains well below peak levels reached several years ago."
At Kawahara Nursery Inc. in Morgan Hill, Josh Kawahara said business has improved.
"At this point in our season, the year is already a success," Kawahara said. "Our sales are up about 40 percent compared to last March."
Numbers can be misleading, he cautioned, noting that March 2012 was very rainy, which slowed sales, but April sales were strong last year.
"We're up against big numbers this month," he said. "But with the housing market picking up, we're hopeful sales will continue to be strong. We think more people are staying at home, instead of traveling, and that they will be enjoying more time in their yards."
Whether consumers are sprucing up the garden for personal enjoyment or improving curb appeal for a future sale, surveys indicate good return on the investment: Landscaping can add as much as 15 percent to a home's market value, according to The Gallup Organization.
"We definitely saw a drop-off in sales during the recession," said Kawahara, who grows for the wholesale nursery market, primarily in Northern California. "Nurseries have had a difficult time and some have gone out of business. That has created product supply gaps and we're looking to see if we can help fill those gaps."
California nursery owners agreed the recession and real estate market collapse created very difficult economic conditions. They said they expect nurseries that survived the recession to be stronger, more tightly focused on their product offerings and bigger, through increased merger and acquisition activity.
"The economy is feeling better," said David Cox, owner of L.E. Cooke Co. in Visalia. "We are seeing a resurgence in sales. I recently made a sales call at a retail nursery and by the time I left on a Wednesday morning, the parking lot was full."
Cox produces deciduous fruit trees, which require a year or more to grow to market size, and he said he's expanding plantings by up to 15 percent for the 2014 crop.
"I'm cautiously optimistic," said Cox, who chairs the California Association of Nursery and Garden Centers board of directors. "In our business, success depends on whether we can control the cost of inputs, access adequate labor and rely on continued economic recovery.
"That being said, we're on the upswing," he said, "enough so that I can make money, which has been difficult to do in the past few years."
Whether this upswing is due to seasonal weather fluctuations, an improving real estate market, pent-up demand or changing tastes in garden landscaping, Jon Reelhorn, owner of Belmont Nursery in Fresno, said, "I'm no expert in real estate and the economy, but I can tell you that right now our sales are back to 2003 levels. Last month was the best we've had in years."
He said consumers are continuing to buy fruit trees and vegetable plants, "but the ones spending the most money are people who want to renovate their landscaping. Our landscape design people can barely keep up. I just hope it stays strong into the summer." But he ended on a cautionary note: "One thing that scares me is the possibility of drought."
(Kate Campbell is an assistant editor of Ag Alert. She may be contacted at email@example.com.)
Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.