Jul 17, 2017
Cultivate’17 Keynote Looks at Industry Changes

The State of the Industry keynote, July 17, at Cultivate’17 outlined the challenges and changes the horticulture industry currently faces. Five of the top issues affecting the industry are labor, margin structure, understanding consumers and their spending habits, industry infrastructure and generational transfer. Craig Regelbrugge, senior VP of industry advocacy & public policy at AmericanHort, and Charlie Hall, Ellison chair at Texas A&M University, further discussed some of these key topics.

Regelbrugge discussed labor and the industry’s workforce outlook. Labor in the horticulture industry is paper-challenged, aging and migrant labor is beginning to settle, he said. New labor is not entering the industry and growers face challenges receiving the foreign workers needed as H-2B paperwork gets tied up in the application process.

The current Farm Bill expires in September 2018, and the horticulture industry needs a seat at the table discussing it, Regelbrugge said. Passed once every five years, “the farm bill is the principle expression of agricultural policy,” he said. The farm bill is important to the industry because it directs funds to projects focused on pest and disease management, funds the Specialty Crop Research Initiative and Nursery Crop Insurance Pilot Program, and more.

Other issue priorities for the industry include commerce/plant trade, tools and inputs, business management and research/statistics, Regelbrugge said.

Charlie Hall focused on the economics of the industry.

“Uncertainty” describes the past year, Hall said. But “uncertainty gives us tremendous opportunity.”

Before jumping in to the economic outlook, Hall encourage audience members to remember that people “don’t mind paying for things that enhance the quality of our life. And what we’re selling is enhanced quality of life.”

Hall discussed current economic conditions pointed to a few factors influencing the outlook, including:

  • Job growth is good but beginning to slow down
  • The leading economic index is positive for the ninth consecutive year
  • Consumer confidence is holding
  • Fuel prices remain low
  • Retail sales are slowly growing
  • The international forecast is better

Changing demographics are an important factor in the industry’s economic outlook, Hall said.

“A steady stream of millennials are approaching the age that homeownership tends to rise,” he said. “There are more millennials than there are baby boomers.

Hall noted there are about 10,000 baby boomers retiring every day.

The health and well-being benefits of plants resonate with millennials, Hall said.

“If we don’t remain relevant to millennials, we’ll miss the boat.”

What about the future? Hall said that depends on what he calls “Trumponomics” or “MAGAnomics,” the goals and focus points of the Trump administration, such as reducing regulation and taxes, increasing infrastructure, stricter immigration enforcement, renegotiating trade deals and repealing the Affordable Care Act.

Hall does not anticipate the economy falling into a recession any time soon.

“The likelihood of a recession between now and this time next year is about 15 percent,” he said. “We’re in the third longest expansionary period in our history.”

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