State of the Industry at Cultivate’23

During Cultivate’23, AmericanHort and industry leaders shared their insights on the current state of the green industry and what the future holds.

As we near the end of 2023, take a look back at our recap of the State of the Industry address from AmericanHort President and CEO Ken Fisher, Dr. Charlie Hall from the Department of Horticultural Sciences at Texas A&M University and Craig Regelbrugge, AmericanHort executive vice president of advocacy, research and industry relations.

Ken Fisher stresses importance of relationships

During his opening speech at the State of the Industry presentation at Cultivate’23, AmericanHort President and CEO Ken Fisher stressed the importance of maintaining relationships in the green industry. Specifically, he said, it’s important for industry members to maintain in-person relationships that span years, if not decades.

The speech, given on Monday, July 17, featured Fisher noting that there are industry members who have attended Cultivate (or a previous version of the event before the formation of AmericanHort) for 40-plus years. Those relationships, Fisher says, are a big part of what makes the green industry special.

“It’s easier and easier, unfortunately, to let go of personal relationships,” Fisher said, noting that his concern stems from a generational shift and the ease of communicating digitally.

“It takes a long time to grow an old friend,” Fisher said. “Our industry won’t be as strong tomorrow as it is today, I have concerns, if we don’t continue to invest in our friends in this industry.” He noted that it will be a priority for AmericanHort to provide the in-person events that can help foster long-lasting bonds.

Fisher also made his case for growers to advocate on behalf of the industry. Fisher, along with AmericanHort executive vice president Craig Regelbrugge, spent time discussing ongoing labor concerns and the need for H-2A and H-2B reform. Fisher advocated for industry members to work with their congressional representatives and push past politics to make the case for what the industry needs. That could be by directly contacting elected officials and/or working with AmericanHort in their efforts to lobby elected officials on various topics.

“We can’t hope that regulatory issues will skip us or get taken care of by someone else,” he said. “... We have to demonstrate, as an industry, our strengths to protect our weaknesses.”

Three takeaways from Charlie Hall

In opening his State of the Industry address at Cutlvate’23, Dr. Charlie Hall poked fun at himself.

At Cultivate’22, Hall said there was a chance of recession in the next year. That, to date, has not happened. So, as Hall put it, his prediction was technically correct.

“Last year, I stood in this exact same spot,” he said. “I predicted a 50% probability of a recession occurring, which by definition means there was a 50% probability of a recession not occurring. And I’m pleased to report that I was 100% correct.”

Here are three takeaways from Hall’s presentation. For those who couldn’t attend and want to see his full presentation, email Hall at charliehall@tamu.edu.

1. Most growers reported increased profits in the first part of 2023: Hall said sales were generally strong in the first half of 2023. Seventy-six percent reported increased gross sales year over year. Sixty-nine percent of growers reported net profits this year versus last.

The 31% of growers who didn’t report increased profits, Hall said, could have been facing increased input costs that cut into profit and/or growers not raising prices enough (or at all) to stay in line with rising costs.

He also noted that labor costs continue to rise. Non-agricultural wages are up 18% since 2018 nationally. By comparison, agricultural wages have risen 25% over the same period.

2. 25-35-year-olds are a potential boom market: According to Hall, there is a “historical amount of 25-35-year-olds in the country now.” That, he said, is a potential market to drive new plant sales, provided they begin purchasing homes.

The next step, then, is for the supply of homes to meet possible demand on top of interest rates settling in at a level that makes mortgages more affordable. (Interest rates going down, Hall said, will be a “shot in the arm for home sales.”) On the supply side, the number of permits for new builds is increasing nationally — an indicator that the housing market could head in a direction that is good for the green industry.

3. A recession isn’t imminent: Toward the end of his presentation, Hall answered the question he joked about at the beginning: Is a recession coming or not?

Various economic indicators, Hall said, indicate that there’s more than a 50% chance of some kind of economic downturn. In his own projections, he’s come to the same conclusion. However, he says, that doesn’t mean a full-on recession is coming.

Instead, Hall said, there’s “a high probability of a mild, short-lived downturn” during the first quarter of 2024. From there, he said, business should kick back up once the busy spring season drives sales.

Craig Regelbrugge shares political outlook

The key political priorities for AmericanHort include ensuring an adequate workforce; business practices, regulation and compliance; research and innovation; and sustainable tools, technologies and practices.

That was the message shared by Craig Regelbrugge, AmericanHort executive vice president of advocacy, research and industry relations, during his portion of the State of the Industry address during Cultivate’23.

Regelbrugge said the current political environment is “about as difficult as I have seen in 30 years.” He noted that “politics has always been a rough and tumble sport” and “never been kumbaya and roasting marshmallows.”

“But there used to be a generally accepted appreciation that when the fighting’s over, there’s a time where you have to come together, and you have to find solutions,” he said. “These days, we have a few too many who are coming to Washington to grandstand to build their own version of their own personal brand, and there are fewer incentives than ever to get to solutions. ... We do have challenges that all can be resolved, but it’s going to require our government functioning in a way that it’s struggling to at the moment.”

In the midst of the current political landscape, Regelbrugge said AmericanHort continues to advocate for vital issues in the horticulture industry.

Speaking for himself, not on behalf of AmericanHort, Regelbrugge took issue with Florida Gov. Ron DeSantis’ treatment of immigrants, noting that it has “profound implications for what are the three pillars of the Florida economy: agriculture, tourism and construction.” He also noted that DeSantis is not alone in his actions.

“It’s become almost a litmus test, it seems at times, the using of the I word — immigration and immigrants — to fan flames in order to achieve popular support,” Regelbrugge said. “We certainly have legitimate challenges as a nation. I believe we would all agree we should have secure and well-managed borders. We should have orderly processes to come here. We should have respect for the rule of law. But I personally have approximately zero tolerance for the demagoguing and the scapegoating of immigrants for all of our ills and challenges. ... Our industry has been built from the ground up and grown from the ground up and achieve the success you achieve largely with the helping hands of a lot of hard-working women and men who are not from around here and came here in a variety of contexts.”

Chris Manning is managing editor of Greenhouse Management magazine. Emily Mills is associate editor of Garden Center magazine. Contact them at cmanning@gie.net and emills@gie.net.