Specialty Crop Update (The Forgotten White Meat) Ben Campbell University of Georgia Not Meat!!! Jackfruit

What is a specialty crop? USDA-AMS: Specialty crops are defined in law as “fruits and vegetables, tree nuts, dried fruits and horticulture and nursery crops, including floriculture.” This definition, although more exact than previous legal definitions, leaves a certain amount of latitude in interpretation.

The Green Industry/Environmental Horticulture Industry Production, distribution, wholesale retail and services Nursery and Greenhouse Floriculture Turfgrass

Top States (from Hodges et al. 2015) Total Output Output per Capita Output/Sq Mile California North Dakota District of Columbia Florida Connecticut New Jersey Texas Florida Rhode Island Illinois Oregon Connecticut Ohio Vermont Massachusetts

Where Locating? Georgia as example 2012: Grey=no firms Yellow=1-3 firms Green = 4-7 Blue=7-10 Red = more than 10

Employment Contributions (from Hodges et al. 2015)

Direct Employment (from Hodges et al. 2015)

Output Contributions (from Hodges et al. 2015)

Issues with providing a specialty crop update (especially for Green Industry) Little data on the greenhouse, nursery, and turfgrass sectors – especially for price, production, and demand Ag Census Census of Horticultural Specialties Floriculture and Nursery Crop Yearbooks (stopped in 2007) S-1065 Multi-State – survey of industry every 5 years IBIS World Reports Industry Surveys Floriculture crop summary – USDA-NASS Rely heavily on: Economic outlook Weather predictions – especially in Spring for demand; in Winter for supply Greenhouse Grower, 2016 State of the Industry http://www.greenhousegrower.com/management/growers-and-suppliers-move-forward-with-cautious-optimism-in-2016/#Tinsel/126522/3

US housing starts

US housing starts

U.S. Dept. of Housing and Urban Development According to the U.S. Census Bureau, U.S. building permits up 6% in first half of 2017 compared to the first half of 2016. The increase is not consistent across all regions. The Northeast has the largest increase, and the South has a 5 percent increase in permits from 2016 to 2017. However, through the first half of 2017, building permits in Georgia remained consistent with 2016 levels. Table 1. New Privately-Owned Housing Units Authorized in Permit-Issuing Places US Northeast Mid-West South West 2014-2016 11% 4% 13% 9% 18% 2015-2016 -19% 31% 5% -1% U.S. Dept. of Housing and Urban Development

US GDP The overall economy is an indicator of green industry growth. Kiplinger and Trading Economics both have the 2018 U.S. gross domestic product growth rate at 2.4 percent,

Unemployment Claims

Georgia Georgia Gross State Product Year Percent 2005 2.9 2006 1.9 2007 2.4 2008 -1.9 2009 -3.1 2010 13.1 2011 1.4 2012 0.9 2013 2 2014 2.3 2015 0.7 2016 2.1 2017 2.6 The overall economy is an indicator of green industry growth. Kiplinger and Trading Economics both have the Georgia state product growth rate expected to be around 2.9 percent in 2018. http://www.usgovernmentspending.com/compare_state_spending_2017bZ0a

Georgia Green Industry (with Brady Brewer) Farm Gate Sales Agents: Each GA county reports all agricultural production within the county Total production should be reliable as some over-/under-estimate Specialists: Average prices are reported for each commodity Farm gate sales are then calculated for each commodity Each year since 2000 Can give us an idea where things are headed Impacts of recession/drought of 2008

Georgia Production Container Nursery Field Nursery Turfgrass Greenhouse Acres Sq. Ft. 2001 3,749 5,214 39,517 17,559,610 2002 3,964 5,600 42,808 19,689,850 2003 3,946 5,846 47,223 19,419,518 2004 4,199 7,677 46,910 18,400,981 2005 4,389 8,314 49,195 19,224,290 2006 4,676 8,707 48,830 19,707,472 2007 4,718 9,238 50,535 19,068,323 2008 4,379 8,202 41,207 18,977,843 2009 4,740 8,248 33,937 17,675,066 2010 3,848 7,269 26,821 16,500,013 2011 3,489 7,069 23,093 19,690,854 2012 3,574 6,796 21,678 18,028,008 2013 3,704 7,097 22,457 17,133,765 2014 3,656 7,029 24,513 16,378,393 2015 3,699 6,912 25,657 22,613,281

What is apparent from the production numbers: Many firms went out of business or experienced significant contraction after the recession and drought. Turfgrass The number of sod farms and average sod farm size are off 32% and 28% from 2007 to 2012, respectively. In comparison, the number of U.S. turf farms decreased by 8% with a 15% decrease in average farm size from 2007 to 2012, respectively. Greenhouse and nursery side The number of farms in Georgia decreased by 28% from 2002 to 2012 with a 5% reduction in average farm size. U.S. production was off only 10% during the same time period with average farm size shrinking by 15%.

Labor Georgia (and US) firms have had to adapt to changing economic conditions either through automation or changes in hiring practices. USDA Census of Horticultural Specialties for 2009 and 2014 it is apparent that Georgia firms are moving from hiring long-term (150 days of employment or more per year) to shorter-term workers (less than 150 days of employment per year). Overall, employment was up 12% (equivalent to 2 workers per firm) from 2009 to 2014, but long-term employees were down 37% (equivalent to 2.6 workers per firm) with short-term employees hiring up 91% (equivalent to 5.6 workers per firm). These statistics show how firms that survived the recession/drought are changing their business practices to maintain/increase competitiveness.

Georgia Prices Greenhouse Turfgrass Field Nursery Container Nursery per Sq. Ft per Acre 2001 13.70 3,825 14,534 55,832 2002 15.85 3,768 16,787 56,328 2003 16.74 4,127 15,832 56,088 2004 15.92 3,750 15,308 54,832 2005 15.48 3,713 14,557 53,847 2006 16.46 4,056 14,201 53,105 2007 16.07 3,699 12,478 51,982 2008 15.17 3,504 12,298 47,783 2009 16.38 3,775 12,089 48,837 2010 16.42 3,439 11,810 48,339 2011 14.71 3,407 10,507 43,048 2012 14.81 3,977 10,307 40,856 2013 14.63 4,135 10,126 40,409 2014 16.20 4,255 11,095 40,158 2015 16.41 4,276 13,073 40,926

Expect growth in 2018 Industry goes as economy and weather goes Production side Increasing production and constant/increasing prices Demand side Increasing demand Increasing price competition Other factors: Household incomes – slow, but upward growth for GA and US incomes Weather (hoping for dry weekends during the spring) Forecast is for warmer winter and normal spring weather Input costs: especially water, labor, and production practices Will mitigate some of demand and price increases

Where are we Headed? New/differentiated/niche products Production practices Greenhouse Grower, 2016 State of the Industry http://www.greenhousegrower.com/management/2016-state-of-the-greenhouse-industry-numbers-at-a-glance/#Tinsel/126531/10

Where are we Headed? Labor Labor Greenhouse Grower, 2017 State of the Industry http://www.greenhousegrower.com/management/state-of-the-industry-2017-growers-are-ready-to-invest-to-alleviate-labor-pains/

Georgia Turfgrass Survey (Clint Waltz) Clint Waltz, UGA Turfgrass Specialist, Does an annual turfgrass survey of Georgia producers

Bermuda Supply Zoysiagrass Supply Centipede: 60% adequate supply St. Augustine: 50% project shortage, down from 80% in 2016

Annual Sod Survey 2017 Conclusions – Price Price Expectations Bermudagrass – 76% forecast to remain steady Zoysiagrass – 73% foresee stable prices Centipedegrass – 56% remain constant Tall fescue – 50% remain constant St. Augustinegrass – 67% foresee stable prices

2017 Turfgrass Costs On-the-farm Delivered to Atlanta* Turfgrasses 2016 2017 Change --- Cents / ft2 --- % Bermudagrass 25.5 24.5 -3.9 31.7 29.6 -6.6 Zoysiagrass 42.6 42.5 -0.2 49.4 47.3 -4.3 Centipedegrass 26.9 25.1 -6.7 33.9 30.1 -11.2 Tall Fescue 29.3 29.2 -0.3 34.9 35.1 0.6 St. Augustinegrass 39.3 32.5 -17.3 45.3 36.5 --19.4 * Delivered price includes freight and pallets.

Expect growth in 2017 (demand and profitability) Industry goes as economy Largest sales area: Landscape contractors – increased housing starts and disposable income Athletic fields – government = policies at local and federal level; private = income Golf courses – disposable income Other factors for 2017: Input costs: especially water and labor

Thank You! Questions??