Profit on poinsettias Lilliputian
Annual oversupply drives down prices every season, growers say
Posted: December 8, 2012 at 3:12 a.m.
VAN BUREN Charlotte Patterson enjoys selling poinsettias this time of year for Parks Brothers Farm near Van Buren.
“I like the bright colors, the Christmas-y look. And people are in the Christmas spirit when they come in,” said Patterson, who has worked for the company since 1999.
There’s just one downside worth mentioning for many large-scale poinsettia growers like Parks Brothers, which will produce more than 110,000 pots of the red, pink and white Christmas flowers this season.
There’s often little or no profit.
“A lot of growers only grow poinsettias in the back half of the year to offset overhead,” said Jason Parks, operations manager for the family owned Parks Brothers. “Very few growers approach it as a profit center.”
Just about two miles away from Parks’ operation, Pleasant Valley Farms was packing up the last of 100,000-plus poinsettia pots for Christmas 2012.
“It’s something that helps us keep our employees working through the year,” Tim Owen, president of the family-owned company, said this week. “If we did not do them, we would have to lay people off.”
Poinsettia sales have been troubled by years of oversupply and low-price competition, especially from “big-box” stores, Arkansas poinsettia growers and other experts say.
James Robbins, a professor with the University of Arkansas Cooperative Extension Service, called poinsettias “a tough crop because it’s hard today to be competitive.”
Chain retailers sell the plants at cost or below, as “loss leaders,” said Robbins, who specializes in greenhouse plants.
Poinsettias are the nation’s best-selling potted plant. Despite myths to the contrary, they aren’t a poison threat to humans or animals. Red varieties are overwhelmingly the most popular, experts say, and California is the top producing state.
Because of supply and price issues, some growers nationwide have recently cut back on poinsettia production.
Greenhouse Grower magazine reported in January that about 31 percent of nursery operators who took part in the publication’s annual “Poinsettia Season Recap” said they dialed back poinsettia output by 5 percent or more last year. Another 15 percent reported increasing production by at least 5 percent. The publication serves ornamental greenhouse growers.
The magazine’s survey of 150 growers nationwide also showed wholesale prices fluctuating in recent years. For 6.5-inch poinsettias, the most popular size, average wholesale prices hit $6.44 in 2009 then dropped to $6.08 in 2010. Last year they were back up to $6.87. Average wholesale prices for this year weren’t available.
Prices vary by area of the country. Average 2011 wholesale price nationwide for a 10-inch poinsettia, the size of a beach ball, was listed at $21.80 nationally, according to the survey. Parks Brothers Farm sold that plant in its retail greenhouse Friday for $14.97.
The magazine’s survey also asked growers for their “final impressions of the 2011 Poinsettia market.” Though 91 percent said they would grow the plants again this year, only about a dozen of the 49 comments described the season as “excellent” or “good.” About the same number of growers offered opinions such as: “Not real good,” “Stunk” and“Slow.”
Pleasant Valley Farms was among greenhouses that reduced production this year. Owen said his company cut off sales at the lowest price points.
“We appreciate all our customers,” he said. “But we made adjustments in some areas where we were not making money.”
His greenhouse has sold out its poinsettias this season. Neighboring Parks Brothers Farm can’t say the same and expects disappointing results.
“The margins are pretty thin” in the poinsettia growing business, Parks said. “You may think you’re going to make money. But if we have a heater go out and have a house freeze, or if you don’t sell those last 10,000 or 15,000 poinsettias, you won’t make any money.
“This year,” Parks added, “we didn’t sell the last 10,000 or 15,000.”
Even so, 48-year-old Parks Farms expects to produce poinsettias again next year, he said.
Besides keeping employees on the payroll, selling the big bright flowers at Christmastime has other rewards. “No matter how the season ends for the growers,” Parks said, “it’s always great to hear someone tell us how good our poinsettias look.”
Business, Pages 29 on 12/08/2012