Nursery industry rebounds years after recession
Gresham nurseryman Rod Park describes the 2008 economic recession as like swimming underwater in a storm growers didnt know which direction they were headed while gasping for air.
No one knew how long we would have to hold our breath, said Park, owner of Parks Nursery along Southeast 282nd Avenue in Gresham. It was longer than we thought it would be.
The effects of the recession were felt nationwide. Few were spared, especially Oregons nursery industry, which had enjoyed years of expanding sales then got hammered in the national housing bust.
During the recession Oregons nursery industry lost about 35 percent of its operators. Especially hard-hit were nurseries who borrowed money to expand, then were left with loans when sales dried up.
Oregon nursery industry revenue peaked in 2007 with $988 million in sales. By 2011 those sales had dropped to $641 million before rebounding to $745 million in 2013.
Nursery crops are not like strawberry crops. You cant plant it one year and sell it the next, said Jeff Stone, Oregon Association of Nurseries executive director. Often you have two to 15 years to get that product to market. What happened is with the downturn and business drying up, (nurseries had to ask) do you continue to plant, can you survive?
For nurseries in East Multnomah County and Clackamas County, the answer to this questions was based on their financial stability before the recession.
Park, a former Metro councilor, has worked for his familys nursery since 1977, the year the Blazers won the championship. The Gresham land has been in his family since 1947.
We were fortunate in that we had gone into the Great Recession in relatively good financial health, he said. That allowed us to be a little more aggressive than our peers.
Dan Nelson, owner of Hans Nelson & Sons Nursery in Boring, said they too were fortunate with their financial stability to help survive.
It took a lot of nurseries out, not only here in Oregon, but across the country. Theres less people doing this than there used to be, Nelson said. Financially, if you couldnt afford to stay you were gone.
But making decisions to stay afloat was a guessing game.
Youre trying to take the best information you can, gauging it, you read the reports, look at the news, trying to figure out what the economy is going to do, Park said. Nursery items are a want item. One of the ways I monitored was looking at Home Depot and Lowes. How were they doing?
By paying attention to what people were buying want versus need items Park tried to cut back accordingly. Nelson said they did the same.
We cut back planting, cut back on employees, Nelson said.
Park likened it to a balancing act, less planting while exploring new products to keep sales going.
It was probably as deep and dark as this industry has experienced, Stone said. Those who have made it through the shipwreck the ones who were able to make it to shore, made it through. Its now a growth market, and theyre starting to see benefits of that.
I think over the last 18 to 24 months weve seen signs of improvement, Stone said. I think this is the first year where its really coming back. Were starting to see shortages of plant material in the marketplace.
Although the total number of nurseries hasnt increased at the same rate as before the recession, Stone said there is tangible growth.
Oregon is so well positioned by their production and the climate we have here I think they have an opportunity to grab even more of the market share than they had prior to the downturn, he said.
In addition, by adapting to the recession, many nurseries sought new products to stay competitive.
That helped, Nelson said. Its more diverse.
But as Oregon adapted, so did the rest of the nation. East Coast nurseries improved their product and have lower transportation costs to major markets, making the competition more intense.
Oregon has very high quality material its a given and a known. But theres only X amount of clients at certain prices, Park said. There are only so many people who can buy a Tesla. No matter how good it is. Thats the problem. You can only go so far on that particular model before it doesnt work anymore.
Stone said while its true other markets have closed the quality gap some, hes not worried for the Oregon markets future.
Ill still put an Oregon plant against a New Jersey plant any day, he said.
Labor availability and cost compounded with an increasing minimum wage could impact the industrys rebound.
Going forward the lack of labor that will work in agriculture is definitely a problem, not only for nurseries, but industry in Oregon, Nelson said. I keep the same size crew all year around, because Ive got work all year around. That makes it easier.
Park said for these reasons, hes continuing to explore new technology to stay ahead of the labor issue.
Were continuing to figure out whatever we can do to mechanize, he said. Whatever we can adjust or replace to increase productivity. Were continuing to look and strive in that direction.
While enjoying the slow return of business and industry, Park said hed categorize the nursery industry future as uneven.
The reason I say that, is during the midst of the recession we saw people were buying color petunias, daisies, things that were fairly inexpensive and they could still put something in, Park said. Then we saw the other side of the spectrum. People with money were continuing to buy big plant material. But the middle, there just wasnt a middle because they dropped off.
People would put on a new roof if they needed, but they wouldnt remodel their kitchen.
What I see is the middle slowly coming back, he said.
But the uncertainty of labor costs, transportation costs and the economy in general make it hard for Oregon nurseries to compete.
So just give us a fair chance, and well compete, Park said.