Ornamental economics

The United States is the world's largest producer of greenhouse and nursery crops. In fact, net farm income for growers of greenhouse and nursery crops is among the highest of all production specialties, according to the U.S. Department of Agriculture's Economic Research Service (ERS). "In terms of total economic output, or the value of the industry and its closely associated business activities, the floriculture and environmental-horticulture sector ranks as the second-most-important segment of U.S. agriculture," reports ERS.

For the purpose of ERS studies, environmental horticulture includes nursery plants such as trees, shrubs, ground covers, vines, and fruit and nut plants, as well as bulbs, sod (turfgrass), and unfinished plants and propagative materials such as cuttings, plugs and seedlings.

Floriculture and horticulture also is the fastest-growing sector of U.S. agriculture. In 1996, grower cash receipts reached $10.6 billion, an increase of 5 percent over the previous year's $10.4 billion. As the graph below shows, receipts have continued to rise since 1989 at an average rate of 5 percent, or $500 million, annually. Environmental horticulture rose from $4.6 billion in 1989 to $6.9 billion in 1996.

The environmental-horticulture industry fluctuates with the economy. When economic conditions are poor, housing and other construction slow down and horticulture sales follow suit. "Most landscaping is not done until construction is completed, creating a 6- to 12-month lag in sales of landscaping plants behind construction startups," writes ERS's Doyle Johnson in Agricultural Outlook, July 1997.

"When the general economy slows significantly, decline in sales of environmental-horticulture products will be delayed for at least 3 to 6 months as landscaping contracts are fulfilled and construction activity winds down."

The weather also plays an important role in environmental-horticulture sales, as many products are field-grown, and producers must wait until field and soil conditions are optimal for removal, Johnson says. "Many crop growers have shifted to producing containerized plant materials that can be relocated to greenhouses and other winter-protected sites and marketed readily at late and more economically beneficially times."

As the map at left illustrates, the South and West have the highest concentration of greenhouse and nursery production, which is primarily due to climatic factors but also because of the demand created by their proximity to population centers. Midwest and Northeastern states also make a significant contribution to the national production figures. Ten states account for more than two-thirds of the country's total output (again see map for geographic breakdown).

In 1996, the U.S. exported $225 million in greenhouse and nursery products. These products mainly include specimen trees and foliage plants shipped to Europe or Canada, according to ERS. While other developed countries spend more money on floriculture, the U.S. spends two to three times more on outdoor landscaping plants. In 1997, U.S. consumers spent nearly $37 billion on environmental horticulture, or about $138 per capita, Johnson reports.

Source: Economic Research Services, U.S. Department of Agriculture. Agriculture Outlook, July 1997.

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