June 2004

NEWS on the GROW

Midwest Growers React to Weather

The recent weather conditions in the Midwest have affected many growers in the industry. Tornadoes, severe storms and flooding have affected sales across the area in several different ways. GPN did a little checking to see what growers have been facing in the Midwest since the bad weather hit.

Over Memorial Day weekend, a large storm system prompted 1,000 severe-weather reports across 27 states, according to the National Weather Service. Across the Midwest, severe weather spawned nearly 200 tornadoes. Heavy rains caused flooding in the Midwest, with rivers in 13 states above the flood stage.

Bergmann’s Greenhouses in Clayton, Wis., has not encountered any shipping delays, but product installation has been a problem because of the cool and wet weather conditions. “We have had very slow sales with our bedding plants,” one source said of the family-run business. “Merchandise is selling very well, but sale amounts have been drastically down at this time of year.”

The heavy rain in Indiana has affected planting at many greenhouses. “The rain has slowed down getting our mums ready,” said Richard Own of Clark’s Greenhouses in Connersville, Ind. “Rainy weather has stopped us from filling our pots with soil and getting them out.”

Karol Martindale of County Line Flowers and Greenhouse in Farmersburg, Ind., commented, “We were getting warm day temperatures, but at night it was cold, not allowing the water to stay warm. We always have water lilies blooming by Mother’s Day, but they just started to bloom within the last week [early June].”

Indiana weather has also affected consumer sales. “You could definitely see what weather does to you,” said Martindale. “There are days when the customers are very few and far between simply because it’s been raining so much.”

Illinois made national headlines when Chicago was hit with its third-wettest May in 100 years in recorded history. High waters forced the evacuation of several homes; the closing of roads, schools and businesses; and city power outages. The Des Plaines River, in the Chicagoland area, had its worst flood since 1986.

“We have had 8-10 inches of rain from the first of May (until May 25) over the upper portion of the Des Plaines River,” said Bill Morris, a hydrologist with the National Weather Service, in the Lake Forester. “That is three times the normal rainfall.”

However, even with the horrible weather conditions in Illinois, growers seem to be doing well. “The weather has not affected them as adversely as you may think,” said Dave Bender of the Illinois Nurserymen’s Association. “It has not affected sales whatsoever. In fact, I think sales have been very high. There have been a couple of bad weekends, where it’s just rained all weekend, but they [Illinois growers] are reporting really strong sales during those weeks.”

Precipitation in Ohio as of May 24 was averaging 2.37 inches, 1.51 inches above normal, according to the National Weather Service. During the last week of May many counties were hit hard with severe thunderstorms, with Medina County reporting the highest amount of rainfall in Ohio at 5 inches. Gary Neil of Moore’s Greenhouses in Shreve, Ohio, noticed sales decreasing drastically because of the unusually heavy rainfall. “When it was too wet, people just couldn’t get in. We also haven’t been shipping out as much,” Neil said. “The only things that moved out well were the pansies and violas, and they did because it stayed cooler and wetter longer, and we could put them in baskets. Overall, sales have definitely been down.”

According to the National Weather Service, it was the wettest May for Lansing and southeastern Michigan since the government began keeping records in 1850. According to the Associated Press, around St. Louis, Mo., the rainfall has totaled 6.33 inches, 2.87 inches above normal, making it the wettest May Missouri has seen in nine years.

Curtis Stillwell of Grass Pad Warehouse in Olathe, Kan., summed it up best when he said, “Any time you get rain in May, it affects business. You like to see it busy every day, but when it’s raining, you’re not selling anything.”

Growers Debate Fuel Surcharge

The recent fluctuations in oil prices have prompted many growers and retailers to adjust their fuel surcharges to compensate for added costs. Currently, there are two bills that, if passed, would require a mandatory fuel surcharge when the price of fuel rises above $1.15 per gal. Until then, many growers have been debating how to make up for the extra expenses they have been incurring.

“I have begun as of June 7 to charge fuel surcharges to my retail customers,” said Sandi Hillermann-McDonald of Hillermann Nursery and Florist, Washington, Mo. “In my floral delivery area, I am adding $0.50 per stop. On my bulk nursery deliveries, I am adding an additional $2 per stop for surcharges. My equipment repair is adding an additional $2 per stop of equipment deliveries and pick-ups.”

“We have both tree and shrub delivery plus florist delivery of flowers. We have raised delivery charges as the gas prices go up,” said Bob Schmitz of Wileywood Nursery, Mill Creek, Wash.

Mike Schaefer of Schaefer Greenhouses, Aurora, Ill., had another idea. “We had to bump up prices to cover general costs. We had talked about adding fuel surcharges, but we decided to put a 3 percent price increase on our products. We might still consider it, but we thought the best thing would be just to raise the product price. When the summertime business dies down, you would never make up what you need to get with a fuel surcharge.”

Charles Schroeder of Schroeder’s Flowers, Green Bay, Wis., has increased delivery prices to compensate for the increased fuel costs. “Depending on the situation, we have increased the amount we are charging people for delivery,” he said. “We have been charging for delivery for some time now, but we did increase this year when we saw what was happening.”

William Bettinger of Bettinger’s Greenhouses, Toledo, Ohio, felt it was too late in the game to change prices. “We constantly monitor our costs and expenses, but a lot of pricing has to be done months in advance.”

Many growers are optimistic about the response they have been getting after they raised fuel surcharges or prices. “There is no other way,” said Schmitz. “I think people will accept it because their gas prices are also escalating.”

“So far, my customers seem to understand,” said Hillermann-McDonald. “The feedback I have received was tremendously in favor of such a venture. My staff came on board when I showed them that I pay at least $5,000 a month for gasoline.”

Franks Nursery Launches Discount Program

Franks Nursery recently announced the launch of its new “Business Benefits” program available to all licensed businesses, non-profit organizations and government agencies. The program offers member companies a 10 percent discount on any purchase over $250 made at Franks Nursery’s 169 stores in 14 states.

To enroll in the program, potential members fill out an application and present a business tax ID, business license, resale certificate or other business documentation such as a business card, letterhead or invoice at any Franks store. Once the application has been submitted, a Franks membership card will be given to the applicant and he/she can get the benefits instantaneously. Each business is limited to two cards. In the future, the card or membership number must be presented at checkout to receive the discount.

According to Craig Hazenfield, contact at Franks nursery, the stores received materials a few weeks ago and direct mailed information to almost 1,000 businesses. “The program is new, but response from our store managers on having a program like this has been very positive and supportive,” Hazenfield said. Applications for the benefits program as well as a complete list of store locations are available at www.franks.com.

Michigan Required to Report Water Usage

As part of an effort to protect Michigan’s water resources, growers are now required to report water usage to the Michigan Department of Agriculture (MDA) or the Michigan Department of Environmental Quality (MDEQ), due to the recently amended Natural Resources and Environmental Protection Act. The amended act states that agricultural water users that have the capacity to withdraw surface or groundwater exceeding 100,000 gal. per day, or 70 gal. per minute, must register and report annually actual water withdrawals or face penalties of $1,000 for each violation.

“It is going to be a huge cost as well as an inconvenience,” said Amy Frankmann, executive director of the Michigan Nursery and Landscape Association. “The flow meters needed to measure the water are hundreds of dollars, and people have more than one well. They also have to hire a plumber and well driller to install the flow meters.”

According to the MDEQ, in 2001, Michigan’s thermoelectric power plants, self-supplied industries, irrigators and public water supply systems withdrew a total of 10,633 million gal. of water per day, representing a total water volume of nearly 4 trillion gal. withdrawn during the year, enough to cover the entire state with about 4 inches of water. About 90 percent of that water was returned to the Great Lakes.

According to MDEQ, Michigan’s Water Use Reporting Program is an effort to “inventory, analyze and report baseline information for major water uses in Michigan.” The primary goal of the program is to “inform the public of the value of the shared water endowment of the Great Lakes Basin,” and to encourage efforts to sustain the water resources. It also aims to “establish an environmental baseline and continuing assessment of major water uses, including power generation, industrial, irrigation and public water supply.”

Registration is based on the total pumping capacity of a facility’s system, regardless of how much water is actually withdrawn during a given year. Actual reported water withdrawals might be lower. “It is very difficult to determine the total pumping capacity because most wells were installed 50, 75, 100 years ago or more,” Frankmann said. “It will be extremely difficult to find the original paperwork and determine what the capacity is.”

Samples of both the MDA and MDEQ reporting forms are available but should not be returned at this time. The actual reporting forms will be mailed out by December 2004. However, according to the MDA and MDEQ, the registration form should be completed and sent no later than October 1, 2004. Even though neither the MDA nor MDEQ report is due until 2005, producers are still required to report each month of use in 2004. According to Frankmann, water producers were not notified until April/May 2004, but they are still required to keep track since the beginning of the year, forcing inaccurate estimates.

Agricultural producers can choose between two reporting options. They can register with the MDA and submit an annual water withdrawal reporting form, called an “Agricultural Water Conservation Plan.” The data submitted will eventually be turned over to the MDEQ, and the total reports will be by county. Producers can also register with the MDEQ and submit a water use reporting form annually and pay a $100 filing fee each year. This data will be kept by the individual farmer or grower.In the Agricultural Water Conservation Plan, according to the MDA, information must be given about the farm/operation involved, pumps used and conservation practices implemented. For each pump, producers must provide information about the water source and water use. Nursery and greenhouse crop producers must identify each crop and acreage for water used for irrigation. They should identify the crops as field nursery crops, container nursery crops or greenhouse crops. Conservation practices include tasks associated with system management, record keeping, irrigation scheduling and application processes.

In the Agricultural Water Use Report, according to the MDEQ, information must be given about the farm/operation involved, water use and sources, irrigation crops and acreage, location and water level of wells, and monthly water withdrawals. A registered facility is no longer required to report if it connects to a public water supply system and removes all self-supplied pumping equipment.

AFE Announces Internships/Scholarships

The American Floral Endowment’s (AFE) Internship Scholarship program awarded five students paid internships and cash scholarships totaling more than $25,000. Since 1961, AFE has been a leading not-for-profit organization dedicated to the research and educational development needs of the floral industry, benefiting growers, wholesalers, retailers, allied trade companies and the general public.

The Vic and Margaret Internship Selection Committee awarded four scholarships ranging from $4,000-6,000. This program provides students with hands-on experience at commercial production facilities. The recipients for the March 2004 deadline were Kelly Bull, University of Florida; Natalie Bumgamer, West Virginia University; Shannon Mahoney, Purdue University; and Carrie Radcliffe, University of Georgia.

The Harold F. Wilkins Scholarship Committee awarded one scholarship for $3,500 to Brian Krug from North Carolina State University. This program was established to aid and encourage students to have an internship in floricultural experience outside of the United States. Krug will be interning in the United Kingdom.

As an industry-wide, industry-based organization, AFE has received over $11 million in contributions from individuals and companies. The endowment is looking for companies to provide educational internship opportunities. If a company is interested in hosting a student, it can contact the Endowment office at (618) 692-0045.