FLORICULTURE AND ENVIRONMENTAL HORTICULTURE YEARBOOK -- SUMMARY May 23, 2002 May 2002, ERS-FLO-2002 Approved by the World Agricultural Outlook Board --------------------------------------------------------------------------- This SUMMARY is published annually by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. The complete text of FLORICULTURE AND ENVIRONMENTAL HORTICULTURE YEARBOOK (ERS-FLO-2002) will be available about 2 weeks following this summary release. --------------------------------------------------------------------------- Floriculture and Nursery Sales Barely Increased in 2001 Grower cash receipts from sales of floriculture and nursery crops continued to rise, but at a much slower pace, reaching $13.3 billion in 2001. Of this amount, close to two-thirds, or 64 percent, are accounted for by sales of nursery crops. The other 36 percent are from floriculture crops. Including net trade, U.S. per household consumption of floriculture and nursery crops was $133 in 2001, or $50 per capita. Total domestic consumption of both crop groups was $14.2 billion in 2001 based on the wholesale value of sales and net imports. The U.S. economic recession in 2001's third quarter left the value of floriculture and nursery crops essentially flat from 2000. After healthy gains in the late 1990s through 2000, when the domestic economy was booming, grower sales of nursery crops declined in 2001. Nevertheless, increased sales of potted flowering plants, foliage plants, and bedding and garden plants boosted overall floriculture sales, offsetting nursery crops' decline. Sales of cut flowers also fell in 2001, reflecting their sensitivity to increased unemployment and weak economic activity. Western States Lead U.S. Sales Among the geographic regions of the United States, the Western States were the highest per capita consumers of floriculture and nursery crops. In 2000, per capita sales in Western States were $68. In the next highest, the Southern States, per capita sales were $55. North-central States averaged $30, and Northeast States, $25. Among individual States, Oregon had the highest per capita sales--$191, followed by North Carolina at $123. Florida was third at $97. Based on State shares of U.S. cash receipts from floriculture and nursery sales in 2000, four States--California, Florida, Texas, and North Carolina--accounted for half of total crop value. Three- quarters of total U.S. cash receipts were earned by Western and Southern States. For the United States, consumption per household of floriculture and nursery products in 2000 amounted to $134, more than double 1985's $66 and triple 1980's $44, based on nominal wholesale value. Since 1997, the total number of growers of floriculture crops in the United States has fallen--from 12,717 to 10,965 in 2001. This reflects the steep decline in the number of smaller growers with less than $100,000 in annual floriculture sales relative to the number of large growers. In the size of farming area (both covered and open field), larger growers with more than $100,000 in annual sales increased their average acreage from 46,400 acres in 1999 to 53,700 acres in 2001. In contrast, the total growing area used by smaller growers decreased to an average 8,800 acres in 2001 from 10,200 acres in 1997. These indicate that, in general, floriculture sales by larger operations have increased relative to sales by smaller producers in recent years. Recent Trends Show Greater Demand for Floriculture and Nursery Crops Total floriculture and nursery crop sales increased continuously in the past two decades, as have floriculture crops and nursery crops separately in the past decade. Floriculture crop sales reached $4.7 billion in 2001, and nursery crop sales were $8.6 billion, as represented by grower cash receipts. These are up from only $1 billion and $2.5 billion, respectively, in 1980. Among floriculture crops, only cut flower receipts have declined since the late 1980s. These production declines were more than offset by imports, however, as the dollar's exchange rate appreciated. The growth in demand for other floriculture crops and for nursery crops is reflected partly in increased domestic sales, but more so in higher imports, especially of nursery crops. Foreign supply of cut flowers, which comprise about 50 percent of total floriculture and nursery crop imports, is largely from South America, whereas nursery stock is mostly from Canada and the European Union. The significance of imports of cut flowers and nursery stock is reflected in their growth to almost $1.2 billion in 2001 from only $160 million in 1980. Together they represent 3 percent of total U.S. agricultural imports, up from less than 1 percent in 1980. Average imports of these products, including Christmas trees from Canada, are now $11 per household, of which more than $5 are for cut flowers. These are up from only $2 and $1.10, respectively, in 1980. The strength of the dollar and U.S. income growth in recent years underlie the surge in imports. On the other hand, U.S. exports of floriculture and nursery products, while only a fraction of U.S. imports, have declined in recent years as the dollar strengthened and foreign demand weakened. Floriculture crops--U.S. consumption of floriculture crops amounted to $5.5 billion in 2001, up 3 percent from 2000. Preliminary production estimates from grower wholesale receipts were up 3.5 percent, from $4.6 to $4.7 billion. Consumption of flowering, bedding, and foliage plants was $4.5 billion in 2001, compared with less than $1 billion for cut flowers. U.S. floriculture imports were more than $900 million in 2001, but down 3.5 percent from 2000 as the total quantity of imported cut flowers continued to drop from their peak in 1996. The higher exchange value of the dollar is in part behind the decline in import value. The import share of U.S. consumption of floriculture crops was 17 percent in 2001, down from 21 percent in 1996. Without cut flowers, the import share was 7.5 percent. Cut flowers--As prices of imported cut flowers started falling since 1992, imports started to supplant domestic production. U.S. grower receipts began falling even earlier, since 1990. Imports surpassed domestic producer sales in 1995, and the import share of U.S. cut flower consumption is now 60 percent. Cut flower imports make up half of total U.S. imports of floriculture and nursery products. The other half is composed largely of other floriculture crops. Among the major cut flower imports, only roses (hybrid tea) increased in quantity in 2001. While prices of domestic cut flowers were down slightly from 2000, import prices were down sharply, now 14 percent below 1997 prices. The competitiveness of foreign growers stems from lower labor costs, smaller climate-control investments, and their cheaper currencies. Overall prices of cut flowers in 2001 were 6 percent lower than prices in 2000, and 10 percent below 1998 prices. Nursery crops--U.S. consumption of nursery crops in 2001 was down slightly from 2000, from $8.8 billion to $8.7 billion. This is due to smaller domestic production, which fell to $8.6 billion in 2001 from $8.7 billion in 2000. However, the value of imports, whose share of U.S. consumption is only 3 percent, increased 11 percent from 2000. Since U.S. consumption of nursery crops is almost 60 percent larger than floriculture crop consumption, the overall gain in total floriculture and nursery consumption in 2001 was marginal. U.S. nursery crop consumption per household was $81 in 2001, down $3 from 2000, but still $30 bigger than the $51 per household consumption of floriculture crops. Printed copies of the Floriculture and Environmental Horticulture Situation and Outlook Yearbook will be available in about 2 weeks. The full report will be available electronically in a few days. For more information contact Alberto Jerado at 202-694-5266. END_OF_FILE