Plant and Flower Growing in the US Industry Market Research Report Now Available from IBISWorld
Demand for discretionary products like flowers fell with the whims of the recession. In addition, large retailers are beginning to take over large swaths of the retail market for flowers and nursery goods. As a result, establishment numbers are falling, though larger operators will likely benefit from industry consolidation. Despite improvements in the overall economy, the rising value and volume of cheaper imports will continue to hamper industry growth through increasing price competition. In light of this trend, the industry’s profit margins will diminish, but operators may be able to take advantage of genetic modification, resulting in greater production. For these reasons, industry research firm IBISWorld has added a report on the Plant and Flower Growing industry to its growing industry report collection.
Los Angeles, CA (PRWEB) March 23, 2012
The Plant and Flower Growing industry has fared poorly in the past five years. The influx of cheap-cut flower imports from Colombia has had a staggering effect on domestic farmers, decreasing revenue at an average annual rate of 4.2% over the five years to 2012. IBISWorld expects revenue to total $13.5 billion by the end of 2012. Over the five years to 2012, the number of establishments is anticipated to fall to 45,565, reflecting a myriad of problems within the industry. According to IBISWorld industry analyst Nikoleta Panteva, the recession has tightened the purse strings of US consumers, and highly discretionary products, such as flowers and nursery plants, have suffered from decreased demand. Additionally, large retailers, such as Walmart and Safeway, have taken over a substantial portion of the retail market for flowers and nursery items. These stores have the power to set low prices, forcing growers’ rates to drop. Improvements in transportation allow large farms, which can afford to ship cross-country, to be the main suppliers to buyers nationwide, since they offer better prices and variety than their smaller competitors.
As an agricultural industry, nursery and floriculture production has a low level of ownership concentration. Small family-run operations tend to dominate this industry. As such, there are no major players in the Plant and Flower Growing industry. While small businesses make up the greatest component of the industry, consolidation is resulting in rising numbers of large-scale producers. Competition and cost pressures are forcing smaller production farms to close as the industry moves toward large-scale production. A possible outcome of higher concentration will be greater profitability among large farms as fixed costs fall relative to production, says Panteva.
In 2012, IBISWorld expects the industry to continue declining, with revenue decreasing 3.9% from 2011. While the overall US economy is no longer in a recession, weak discretionary spending will continue to put a strain on flower sales throughout the year. Government support programs will likely pass over this farming industry, since flowers and nursery plants are discretionary goods unlike food. Furthermore, cheap imports allow Americans to purchase flowers at a low price, causing demand for domestic products to diminish even more. Through 2017, IBISWorld forecasts that revenue will continue to decline. Duty-free imports will continue to infiltrate the market, while the domestic industry struggles to remain on the map through intense price competition. Genetically modified plant seeds may be the lifesaver this industry needs; however, current opposition to the movement leaves their future uncertain. For more information, visit IBISWorld´s Plant and Flower Growing report in the US industry page.
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IBISWorld industry Report Key Topics
Establishments in this industry primarily grow nursery plants, such as trees and shrubs; flowering plants, such as foliage and ornamentals; and short rotation woody trees, such as Christmas trees and cottonwoods. These plants can either be grown under cover or in an open field.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation´s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
For the original version on PRWeb visit: http://www.prweb.com/releases/prweb2012/3/prweb9321417.htm