The $600 Million Dollar Problem

               An odd sight began to appear as the wagon trains made their way west along the Oregon Trail.  It all started near Independence, Missouri where pioneers had just purchased what they’d need for the four-month journey and to start a life at the end of it.  Within the first few hundred miles of the journey, cast iron cookstoves, pianos, and anvils began littering the trail.  They were just too heavy and had to be abandoned.  The story makes me ask what would happen if just one guy had gone back the other way to tell everyone.

               The Oregon Nursery Industry brings in revenues around $1.4 Billion (ya, with a “B”) annually and yet it is estimated that 30% of their material goes unsold.  What are the options for legacy material?  You can shift it into a larger pot, allow it to hold over an extra year as it gets longer in the tooth, or liquidate it.  Even the most effective selling machine I’ve known in the industry used to say, “You never sell the last 10%.”  Usually that’s because whatever’s left is out of balance and doesn’t have order starters to ride with.

               In a recent survey I took, the number one frustration for growers was Cherry Pickers and I think this is exactly why.  Some hot shot buyer comes in to swipe all your primo crops of upright junipers and Japanese maples but leaves the hydrangeas and weigela behind.  It’s really not anyone’s fault. 

               Growers build their production plans around historical sales trends.  The challenge comes when those signals lead one direction but change in the 3-5 years it takes to bring certain crops to market.  It’s like seeing a moving target and then closing your eyes before throwing the dart.  Growers make an educated guess and the good ones come close but there’s virtually no chance you’re going to hit a bullseye with the market.  There are just too many variables.  Plus, the other growers are likely following the same trends. 

               High demand excites increased production.  We’ve all heard sales reps say the words, “I could sell as many of these as you can grow!”  However, when all those crops from various growers hit at the same time, you end up with a glut and any leftover crops will force conservative growers to cut production.  If too many growers cut even slightly at the same time, another shortage will occur which brings up demand and the cycle continues. 

               I can recall visiting growers in Oregon some years ago trying to sell liners.  When I mentioned Dwarf Alberta Spruce, each of the ten or twelve growers said, “Oh, they’re too long on the market.  I’m cutting back.”  That next year, I was turning down order after order for 10,000+ trees.  It’s a vicious cycle.  For a few years, it’s globosa.  Then Japanese maples.  Boxwoods have had a run recently.  Same with Taxus and upright junipers. 

It’s a $600 Million dollar problem and makes me think of the Oregon Trail, littered with expensive cast iron cook stoves and anvils.  What would happen if just one guy went the other way and told everyone.  Would they listen?