Friday, September 16, 2011
Bullish Strategy for Spring 2012 for the IGC
I have a "guest blogger" this time... Jim Eason is a great friend and owner of Eason Horticultural Resources. His insight below is typical of the sharp thinker that Jim is. Enjoy...
In the planning process for 2012 that we help our grower/retailer customers with each year, a distinct opportunity is presenting itself to the trade for 2012. Consider the facts: 1) A good portion of the eastern half of the US has been hit with rather horrific weather conditions for the last two spring seasons resulting in rather drastically reduced sales of most ornamentals for many operators; 2) The once in a decade deterioration of economic conditions (unemployment, increased food, fuel, and insurance costs) from 2009 and beyond drastically reduced what the average consumer had to spend on non essentials resulting in even further reduced sales of ornamentals. 3) Most manufacturers (and growers and retailers) are once again reducing their production and inventories as the US (and world) economy "appears" to be sliding back towards a recessionary position; 4) Those growers and retailers in regions of the eastern half of the US that had half way decent weather during the past two springs actually did OK and some actually increased sales which once again proves the well known importance of weather in the sales of ornamentals REGARDLESS of the condition of the economy!
So......... what should a grower or retailer plan to do for next spring? If you consider the facts above you can do one of two things. You can further cut your production plan and your inventory availability for 2012 OR you can take a deep breath and "trust" that most operators will NOT have the gumption nor the line of credit with their bank or their brokers to INCREASE their production and inventories and FORGE AHEAD AGGRESSIVELY WITH AN INCREASED VOLUME OF UNIQUE, DIFFERENTIATED products. This is commonly referred to as a contrarian strategy. These strategies almost always work well when the rest of the world is in the fetal position and living in total fear of failure. An old saying in the nursery business goes: When everyone else is cutting back, plant aggressively. It takes guts (and good credit) but if there was ever a year to use this approach, 2012 may well be the best one we've seen in a long time.
Jim Eason, Eason Horticultural Resources, www.ehrnet.com