Sold Out

Courtesy Nelson Nursery
Courtesy Nelson Nursery

After a recession, a brake on plant production, and widespread nursery failures, finding the plants you want for a project could be tough.

By Anne Raver

After four long, slow years, the housing market is picking up, and landscape architects are beginning to get more calls about work. But after such a long slump, there’s a potentially big problem: Where are they going to find the high-quality plants they need?

The nursery industry has been battered. Nursery owners had ramped up production in an overheated economy. When the real estate bubble burst, they dumped trees and stopped putting more in the pipeline. Hundreds of nurseries went out of business.

“Overall planting, industry-wide, may have been down 50 percent or more,” says Nancy Buley, Honorary ASLA, the director of communications at J. Frank Schmidt & Son Co., in Boring, Oregon, one of the country’s largest wholesale growers of liners, or rooted trees. “Some of our customers didn’t line out any stock at all for two or three years.”

Now, growers say, it seems the recession is catching up to landscape architects all over again in a scarcity of plants, especially of two- to three-inch-caliper trees and some popular shrubs. And the nurseries that have survived are now raising their prices on precious items shipped hundreds of miles.

“We’ve gone up to Canada to find a white birch,” says Eric Brightman, a landscape architect with Michael Van Valkenburgh Associates, based in Brooklyn, New York, and Cambridge, Massachusetts.

“There is a severe shortage of quality plant material,” says Brian Nelson, a co-owner of Nelson Nursery, which grows specialty shrubs in Mooresville, North Carolina. “We just shipped 220 Cephalotaxus 400 miles to Bethesda, Maryland. The landscape company was looking for ‘Duke Gardens,’ one of my personal favorites, for an estate near Wilmington, Delaware.”

The shortages are being seen across the country on the bread-and-butter trees and shrubs—live oaks and southern magnolias in the South, for example, October Glory maples in the East—because trees aren’t like sod. You can’t grow them in a season. “Trees are grown on a three-, five-, seven-, even 10-year cycle, and their production simply can’t be cranked up to match the economy and demand,” Buley says.

Orders were up 15 percent in May of this year over the previous year at Schmidt, which harvests and ships hundreds of thousands of trees a year. And since the first of the year, Buley has fielded four or five calls a day, compared to a few a week during the slowdown, from landscape architects trying to locate specific trees of a certain size for their clients. Buley uses the company’s Tree Locator service to list growers reasonably close to the client who had bought bare-root liners of Amelanchier laevis ‘Spring Flurry’ (a good Bradford pear substitute), for example, or Ulmus americana ‘Jefferson’ (it resists Dutch elm disease) three to five years earlier.

Buley foresees imminent shortages of trees in the 1.75- to 2.5-inch-caliper range, “particularly the unusual varieties and cultivars.” Though solid figures are hard to come by—the U.S. Department of Agriculture no longer surveys the health of the nursery industry, and growers’ associations don’t track production figures and sales—the Green Industry Research Consortium, a group of agricultural economists and horticulturists, produces a National Nursery Survey of all 50 states every five years.

The industry topped out at $175 billion, according to the consortium’s most recent report, in 2009, which collected data from the beginning of 2008, before the effects of the crash took hold. But just how much production and sales would fall over the next four years, and start to pick up again over the next few, is only being assessed this year for the survey to be published in 2014.

In the meantime, Charlie Hall, an agricultural economist based at Texas A&M University, who helped found the consortium and who travels the country speaking and consulting for the industry, offered some estimates.

“Anecdotally speaking, roughly a quarter of our growers have exited the industry, and 40 percent of our landscape contractors,” says Hall, a professor and the Ellison Chair in International Floriculture at the university. “About 20 to 25 percent of garden centers have exited as well.” (That 40 percent drop in contractors includes the “mow-blow-and-go or have-truck-will-landscape” types, who get into business as easily as they get out.) “And my estimates may even be conservative.”

Although a few large growers didn’t stop production, many reduced plantings, some by 30 percent, others by 80 percent. And they dumped thousands of trees and shrubs, even though they knew that could mean shortages if the worst recession since the Great Depression ever ended.

“I threw entire crops away, took them to dump,” Nelson says. “I can’t say how it felt, in words that you could print.”

Nelson and his mother, Nadine, who founded the nursery with her husband, Bill, in 1958, grow large containerized specialty shrubs—‘Duke Gardens,’ Japanese plum yews, ‘Zabeliana’ English laurels, ‘Bartzella’ intersectional peonies—on four acres.

Mooresville, a bedroom community of Charlotte, a financial center for the state, was a hotbed of new construction before the crash. “We were rockin’ an’ rollin,’” says Nelson, who doubled production every year on many items in the boom years. “Then came the severe drop, and we did not have the government or municipalities to rely on as much as the Research Triangle did. So, it’s been really tough.” His sales dropped 30 percent. But plants were in the pipeline, with maintenance needs for five or six years before sale.

The Nelsons tightened their belts, dipped into personal savings, and kept as many plants in production as they could. And their client base, mostly area garden centers with design/build arms and some landscape architects, remained loyal.

“It was a huge mistake, in retrospect, having those kinds of numbers,” Nelson says. “But throwing them away was absolutely the right thing to do. We have 55 years of reputation riding on everything we sell. We can’t sell a junky plant.” Now, Nelson’s inventory is moving out the door fast, and he has started to raise prices 7 to 10 percent, “because they’re worth it, and people pay good money for good plants.”

Looking back on those glory years, John Barbour, a Georgia tree grower, says, “I would have been pretty smart if I’d said, ‘They’re lending money to anybody that walks in the bank, building stuff that shouldn’t be built; there are too many trees on the market; this is time for caution.’ Instead, I made the decision to expand.”

Barbour and his wife, Patty, founded Bold Spring Nursery in 1985, when they planted 13 acres of trees outside Monroe, Georgia, northeast of Atlanta. Their specialty is balled-and-burlapped, five- or six-year-old shade and ornamental trees.

By 2005, they were planting 40,000 trees a year on 400 acres. So they decided to buy a 600-acre farm near Hawkinsville, south of Atlanta, and ramped up to 90,000 trees a year.

“A good thing was that we basically sold out our other nursery, just before the crash, so we were fortunate, going into the recession, to not be loaded with a lot of mature inventory,” says Barbour. “But the downside was, it was poor timing to expand a tree farm.” Meanwhile, the cost of diesel fuel, plastic, and burlap keeps going up.

Tree prices stopped falling in 2011, Barbour says, and inched up 2 or 3 percent in 2012. Now, inventory is getting scarce, and nurseries can raise their prices. “This year, we’ve seen a dramatic rise,” Barbour says. “Our younger three-year-old trees have gone up 24 percent; all our other material has gone up about 6 percent.” That’s after a long haul when Barbour was forced to sell two-inch trees, instead of maintaining them to the three- to four-inch-caliper size his machinery and fields are set up for—900 trees per acre, as opposed to 2,000 or so, for small trees sold at garden centers. “We want to grow the tree all the way to the size it’s supposed to, but when you’re wounded, you sell anything,” he says.

Now, he and other growers are starting to hold back the material, to produce larger trees, because they’re not desperate for cash. So that will mean a shortage of larger trees down the pike. Designers who want eight-year-old maples will confront a shortage of them in four years. “It’s a bubble that’s going to haunt us for years to come,” Barbour says. “You can’t wave your wand and create more four-year-old maples this year.”

Barbour foresees a shortage in go-to commodity items for his region: Nellie Stevens hollies, southern magnolias, small conifers such as Thuja ‘Green Giant,’ and other plants used for screening.

“A nurseryman has 400 for sale, and the first customer with a bid project buys 200 of them. A month later, he’s sold out and he’s got nine months to go. People call. They’re gone.” Even if tree production increases rapidly, Barbour says, “there will be a gap in the pipeline of at least three to four years.”

With tree shortages looming, landscape architects need to check for availability of specific cultivars and species “before they specify,” Buley says.

The trees J. Frank Schmidt is planting this spring, she says, are a decade away from being available as a three-inch-caliper tree harvested from its customers’ fields in Boston; Omaha, Nebraska; Atlanta; Chicago; and other parts of the country. And with prices rising, specs for a job that won’t be constructed for a year or more need to figure in those increased costs.

Barbour advises landscape architects to contract ahead for projects, to avoid finding themselves without the shade trees and other key plants that define their designs.

“One of our staple shade trees is October Glory maple, and as we got into the spring season, we had customers looking for the two- to three- to four-year-old October Glories, saying, ‘I can’t find these; they’re not there.’”

Three years ago, at Bold Spring Nursery, a two-inch October Glory was selling for $40. This year it’s $79. Before the crash, it was $100; a four-inch maple brought $400. That size plunged to $90; now it’s selling for $177.

That makes sense to Barbour. “A four-inch tree was planted before the depths of the recession, so there are a lot of them out there,” he says. “So the price of a four-inch tree hasn’t rebounded to the extent a two-inch tree has, which was planted three years ago, when people just weren’t planting trees.” The shortage is going to be more acute this fall, as growers hold back more of these beauties for larger sizes.

Some of the large nurseries that weathered the recession most successfully were buffered by prior contracts—for thousands of particular trees, ordered at a particular price, years before sale—forged by landscape architects who regularly walk the grower’s fields to tag trees, as well as to ask the grower to plant specific numbers of species and cultivars needed for a particular job.

Barbour encourages more landscape architects to do just that. “But what we hear from architects is that they have less budget for traveling to select plant material—but they have a greater need than ever to do that because there is so much substandard material in nurseries right now.”

He hears that fewer are administering contracts. “Now it’s more of a design role, where they draw a picture,” he says. “Developers are just trying to squeeze a design out of the architect.’”

But these contracts between grower and designer benefit both in a tight economy. Halka Nurseries, for instance, which grows about 200 different kinds of specimen trees, from liners, on 2,600 acres in southern and central New Jersey, did not reduce production during those four slow years.

“We never stopped planting 20,000 trees a year,” says Chet Halka Jr., whose father, Chester, started the nursery in 1954, in Millstone Township. He runs the business with his two daughters, Jaimie and Kate. “We continued to plant because my trees are a minimum of five years, an average of 12 to 14 years, and some are 30 years old. So, if I stopped planting and the economy came back, then I wouldn’t have anything to sell.”

Now, Halka wishes he had more trees. “This spring has been unbelievable. We can’t do enough of the jobs out there before leaf break, and I wish I’d had that money last spring.”

But what kept Halka running, aside from dipping into his own savings, were contracts with public projects and high-end residential work. Landscape architects like Edmund D. Hollander, FASLA, and Michael Van Valkenburgh, FASLA, actually come out and personally tag trees. “Certain architects want different trees that have not been grown,” says Halka. “Michael said to me three or four years before the project for Brooklyn Bridge Park started, ‘I want five or six varieties of trees, multistem, and I can’t get a deposit from the owner.’ He wanted 150 of each variety, a thousand trees, planted close together for growing multistem. Kentucky coffee, ginkgo, honey locust, red maple, that’s part of the diversification.”

He has a similar relationship with Hollander, who often needs salt-tolerant trees for oceanfront properties in the Hamptons: Juniperus chinensis (more salt-tolerant than J. virginiana), black cherry, sassafras.

“We do have a market for large trees,” he says. “Thank God for the billionaires in the Hamptons.”

Anne Raver writes about the environment, including gardening and farming, wildlife habitats, and landscape design.

9 thoughts on “Sold Out”

  1. I know it would be nice if wholesale nurseries like Wilson Nurseries would have all sizes and varieties that customers would like to have. I think this is a great opportunity for contractors to provides 3″ to 6″ trees for a job and make it look so much more mature. The prices on these larger trees are reduced because all nurseries have good quantities to sell. In many cases our 3″-6″ trees are on a spacing that allows the tree to be 12′-13′ wide. Nurseries like ourselves even have a hundred or more “MATCHED”,, Autumn Blaze maple, Linden,Red Sunset maple, Norway maple and Locust,. A few others on the same spacing are Viburnum Prunifolium, Thornless hawthorn, Cornus mascula ” Golden Glory”. We find that with the EAB problem the demand for larger trees is very good and will only get better over the next 3-4 years.
    I have seen many opportunities over the last forty years and I feel we have some very good business to enjoy now and in the near future.
    Roger Fick
    Wilson Nurseries, Inc.

  2. The only other point I would like to add is that the gap everyone is referring to here in 2″ and 3″ trees cannot be filled in. As stated in this article, it is a result of people not planting for a few years when economy, money and space was tight. We will end up chasing this gap through all sizes of trees. Next year it will be 3: and 4″ and then 4″ and 5″ and so on. We will be dealing with the results of the poor economy for years to come.

    Doug Miller
    Purchasing Manager
    LMI Landscapes

  3. It’s good to see that other nurseries prepared for the future similar to what we did at Worthington Farms. Our availability on all of these tree that will be short in the near future is great! Green Giants, Red Maples, Willow Oaks, Southern Mags, Oakleaf Hollies, and Nellie Stevens Hollies, just to name a few. It’s also great to see the industry finally starting to rebound and the economy beginning to thrive. Great people and great nurseries throughout the entire country put there lives at stake to vamp up production in those down years and I’m glad to see those tough decisions finally starting to pay off!

    Rob Jones
    Sales and Marketing
    Worthington Farms, Inc.

  4. The Green Industry’s opportunities are just like every business opportunity, the leaders will be the first to the market and reap the greatest benefits. Once the “word” gets out that the nursery business is a great place to invest, start new businesses, or greatly expand current businesses, all sorts of people begin to clammer aboard the roller coaster. My guess is this article might be one of the first shots in the next surge of fortune seekers. Unfortunately, most in this business seem to plant for today’s needs without thinking about what tomorrow will bring. Once the slow moving green industry roller coaster gains momentum, it runs out of tracks. As soon as all the new businesses begin to sell their plants and current grower’s expansion plants begin to hit the market, the economy usually sours and the industry crashes. This cycle of feast and famine has turned several times since I chose this as my life’s work, back in the early 70’s. Most cycles only lasted a few years and most were able to survive, but the latest dip is a game changer and will affect this business for many years to come. It’s about time our industry makes an honest attempt at policing itself and try to minimize the peaks and valleys of these cycles. Unfortunately our business is so full of so many factions and a lack of leadership that I’m afraid this pattern will be repeated over and over again.

  5. The last few years has been rough on the landscape industry, and unfortunately many companies have not survived. But as described above, the industry’s lag time in response to economic ebb and flow is an ongoing fact of life. I have worked through several of these cycles during my career as a landscape architect, and they created obstacles, but also opportunity. As landscape architects, plants are our ‘palette’ and the founder of our company, Carl Johnson, stressed, it is important to know your palette and what is available. That meant knowing suppliers and spending time in the field, seeing what was available. That connection to suppliers, was critical at times like these and presented wonderful opportunities for putting together dramatic plant palettes using mature specimens that might not otherwise be available. Major corporate landscapes would not have been the same without those ‘special’ finds located when inventories were out of sync with market demand. As the article encourages, landscape architects need to find a way to get out of the office, see what’s in the field, preferably before or during design, and create palettes that respond to current inventories. Further, to the extent possible, and there are many ways, commit to your selections before the projects go to bid. It will foster better design solutions and dramatically improve the appearance of the built work.

    So get out there; the glut of big stuff will be gone in no time!

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