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Down on the (South American) Farm

South American flower growers persevere despite slower sales, higher costs and other challenges.
    by Christine Boldt

     Fresh cut flowers imported from South America provide U.S. consumers with beautiful products on a year-round basis. And because they are now available in many venues, including retail florist shops, supermarkets, mass markets, drug stores, convenience stores, etc., consumers can easily purchase these beautiful products as gifts or for their own enjoyment at home.

     Yet most retailers and consumers do not know where their flowers come from nor do they know what it costs to grow those flowers. Here are some data that may shed some light, for both floral employees and customers alike, on where flowers come from and why their costs may be changing.

consumers are buying fewer flowers

     In 2009 there were more than 5.3 billion stems of flowers imported into the U.S. Of those flowers, 60 percent came from Colombia, 30 percent came from Ecuador and 10 percent came from the rest of the world.

     Because flowers are not considered necessities of life, growers in the United States and throughout the world have felt the impact of the recession because consumer discretionary spending has been reduced, and sales volumes have decreased significantly. In the past, when the U.S. has experienced recessionary periods, South American growers had the ability to shift their sales to other countries that were not affected by America’s financial challenges.

     However, this time, the recession goes beyond the borders of the United States and has had a more global impact. Therefore, while some markets have expanded and some new ones have opened for South American growers, floral consumption, worldwide, remains relatively flat. In addition, the costs of transporting flowers across greater distances have also increased, minimizing some of the benefits of reaching out to new markets.

     While sales have decreased due to the global recession, Colombia has also experienced an even more severe challenge caused by the devaluation of the Colombian peso, which results in an unfavorable exchange rate between the U.S. dollar and the peso. Therefore, when growers are paid in U.S. dollars, they receive fewer pesos per dollar than they have in the past. As the cost of everything continues to increase, their money is worth less compared to the dollars they receive in payments, and that has a direct impact on net profitability.

growers’ costs on the rise

     Indeed, the costs of producing flowers in all growing communities—South America, California, Holland, etc.—have increased in all aspects. This includes labor, energy, pest control and other chemicals, packaging, air freight, etc. Meanwhile, prices for cut flowers have not increased. Instead, growers have continued to lower prices at wholesale and retail to almost unreasonable levels.

     Farms have tried to adjust to these challenges by cutting costs, but it becomes difficult to cut further without affecting quality. Every day, farms have to make decisions on what they need to do to stay in business.

progressive efforts

     Admittedly, South America’s flower growers have had some challenges in recent years. But they are doing what they can to look to the future.

     One way to get an edge, of course, is for growers to find products that will distinguish them from their competitors. However, as prices decrease, capital available for investing in new products and new technologies is limited, making it harder for the farms to produce and introduce the new varieties that have the potential to increase interest and, therefore, demand. Yet, new varieties will find their way to market although perhaps a little more slowly than in the past.

     In addition, South American growers are continuing to focus their attention on social and environmental causes. In Colombia, the Florverde® program, which is an initiative to ensure the “quality of life of workers and their families, as well as environmental sustainability for generations to come,” complies with strict international social and environmental standards. Certified farms have grown by 11 percent, and the number of hectares has increased by 16 percent. In Ecuador, a similar program, called FlorEcuador®, is increasing farms—they’re now up to almost 100 farms certified—and hectares as well.

     The “picture” for South American growers may not be entirely rosy today, but there’s much to look forward to on the horizon.

        

florecuador • agriflor 2010

     The 13th biennial edition of FlorEcuador • Agriflor 2010, an international flower trade show held in Quito, Ecuador, is set for Oct. 6-9. The event will be held at Cemexpo, which will host more than 200 exhibitors from around the world, all showcasing a broad range of floral products and related services.

     Highlights of the 2010 show include a farm tour, a “flower party” and the quality competition into which growers and breeders will enter the “best of the best” in cut flowers.

     For more information about FlorEcuador • Agriflor 2010 and to register for the event, go to www.agriflor.com.


Christine Boldt is the executive vice president of the Association of Floral Importers of Florida (AFIF), an organization that works on behalf of its members to ensure the “free flow of imported floral products into the United States.” For more information about AFIF, go to www.afifnet.org.

Super Floral Retailing •• Copyright 2010
Florists' Review Enterprises, Inc.