The Blue Mountain Eagle
by Sierra Dawn McClain
SALEM — Facing increasing costs and supply shortages, Oregon nursery growers say they are forced to make difficult decisions.
According to the Oregon Department of Agriculture, nursery and greenhouse products remain the state’s top agricultural commodity. The industry made $1.18 billion in sales in 2020, and demand remains strong. But high demand doesn’t always mean more profitability. Instead, many growers see profit margins tightening amid rising prices on freight, labor and other inputs. “Our (profit) margins are definitely going to get squeezed here going forward,” said Noah Fessler, in sales at Woodburn Nursery and Azaleas.
Noah and his brother, Kyle Fessler, said that in 2019, if the cost to send a truck of nursery stock from Oregon to the East Coast hit $6,000, “we thought that was crazy high.” This spring, according to their broker, that trip costs $10,000 to $12,000.
Amanda Staehely, a grower at Columbia Nursery LLC in Canby, said her average freight price to the East Coast increased 45% to 55% between 2019 and 2021, and her Northwest freight rates — within Oregon, Idaho and Washington — increased 60% to 80%.
Like most nursery growers, Staehely ships the majority of her product east of the Rockies, and she is concerned customers won’t want to pay the high shipping costs.
This January, at a trade show in Baltimore, Staehely said many people said they liked her product but wouldn’t buy from Oregon because other states, including Tennessee, have lower shipping rates.
“It’s not an even playing field,” she said. “Oregon is at a competitive disadvantage.”
International shipping costs are also up.
The Fesslers said that a few years ago, they paid $10,000 to $11,000 to ship one container of coconut coir — a potting fiber — from Southeast Asia. This spring, it cost $25,000.
Josh and Chris Robinson, brothers and growers at Robinson Nursery in McMinnville, said that a few years ago, their nursery paid $3,000 to $5,000 to ship a 40-foot container from China. This year, it cost $16,000 to $25,000.
Input costs are up, too.
Staehely, of Columbia Nursery, said pricing on her baskets, containers and burlap has increased 7% to 15%, fertilizer costs have tripled and some chemical prices have quadrupled in one year.
The cost of off-road diesel has also been volatile, forcing growers to buy in bulk every time they see a dip in fuel prices.
Supply shortages have also rocked the industry.
Todd Nelson, grower at Bountiful Farms Nursery in Woodburn, said he ordered fertilizer six months ago. It finally arrived March 14.
“In-time buying is a thing of the past,” he said. Nursery owners are now ordering supplies months in advance and carrying higher inventories.
Most growers say they’re also concerned about the availability and cost of labor. In response, many are investing in automation.
Nelson, of Bountiful Farms, and the Fesslers, of Woodburn Nursery and Azaleas, have both invested in pruning robots that they’ll use for the first time this year.
But not everyone can afford automation. Because Staehely runs a small nursery, she said she can’t afford machinery that costs hundreds of thousands of dollars.
“That’s not within the reach of some of us,” she said.
Growers say that to keep up with demand and maintain healthy profit margins, they’ll need to keep innovating.