Ornamental plant production, is one of the fastest growing agricultural industries in West Virginia. It is a highly specialized and intensive form of agriculture. Unlike field or row crop agriculture, which bases production costs on acres, greenhouse costs are calculated on a per square foot of growing area or per plant basis. In addition, expenditures for greenhouse structures and plant material are considerable. These circumstances allow little room for error, so a great deal of planning is required before entering the greenhouse business. A person considering entering the greenhouse business must have a basic knowledge of propagation, plant nutrition, soil management, greenhouse structures, pest management, environmental control systems, marketing, employee relations and business management. Greenhouse operations often start as a single unit operated by a family. With modest-sized operations, experienced people function as "jack of all trades" while larger operations usually require a full-time and part-time staff. This fact sheet will explain the steps to follow and decisions to make before starting a greenhouse business.
Selecting a Crop
Determine the market potential for a crop before you grow it. Every grower should conduct a market analysis to determine what specific crops, product sizes and quantities are in demand.
Wholesale or Retail?
The crops grown are principally a function of the type of operation in which they are sold. Wholesale operations might produce both cell-pack bedding plants and seasonal pot plants. Retail operations in urban markets may find a stronger market for larger bedding plants and a wide selection of flowering plants. For example, fall sales of large chrysanthemums in 3-gallon and larger containers may appeal to individuals who want "instant landscapes."
To determine which crops have excellent market potential, visit florists and garden centers both in your area and neighboring states. Local landscapers and professional gardeners also can provide insight into new crops. Some of the popular greenhouse production items are found in Table 1.
Cut flower consumption is high, but the majority of greenhouse operators produce potted and bedding plants. Although the information here focuses on potted and bedding plant production, the information presented is applicable to cut flowers as well.
Selecting the Marketing Channel
Choosing the type of crops you will produce will help establish the marketing channels. The primary marketing channels are wholesale and retail.
Wholesale growers produce a diverse group of plant material for use by vegetable growers, landscapers or for resale by florists or garden centers. Wholesale growers produce plants for daily, seasonal or contract sales. If there are a number of local florists and garden centers that need products in your potential trade area, then a wholesale growing operation should be investigated.
Wholesale-daily sales. For successful daily sales, growers produce at least five different crops simultaneously. Growers produce different species and cultivars in order to have for sale up to 15 different items. In addition to the blooming material, growers purchase foliage plants from growers in Florida for resale.
Wholesale-seasonal sales. Many plants are associated with specific holidays or seasons. The wholesale-seasonal grower will produce a variety of plants (Table 2) but will specialize in the one or two most popular crops sold at a holiday. Wholesale-seasonal growers usually sell directly to one or more major buyers. To increase the amount and price range of offerings, growers produce and sell a diversity of sizes and cultivars. For example, a grower may offer white, pink or red poinsettias in sizes ranging from 1 bloom in a 4-inch pot up to 25 blooms in an 8-inch pot. Growers will produce poinsettias for sale as early as November 15.
Wholesale-contract sales. If there is a landscape maintenance or vegetable industry near the site you are considering, then contract growing is a possibility. Contract growers produce specific crops under contract for one or more customers. For example, bedding plants grown for landscapers consist of specific cultivars based on the landscaper's need to quickly fill a planting area with plants in full color. Landscapers may replant a given area three or more times a year with seasonal plants. In addition, the constant replacement of damaged plants by landscapers requires the contract grower to have replacement plants available at all times. To provide for replacement plants, contract growers must plant continuously April through October. Initial plants are grown in 3-inch pots, but by late summer only 6-inch pots are in production.
Vegetable transplant producers grow specific vegetable varieties based on the requirements of farmers who have placed orders. Some producers grow one crop and then shut down the greenhouse for the rest of the season, while others produce an additional crop of bedding plants to better utilize their greenhouse. Seeds are sown based on the farmers' anticipated dates of planting into fields.
Table I. Availability of typical greenhouse crops
Table II. Seasonal plant material produced for specific holidays
The market for contract growing fluctuates. It is not uncommon for a grower to discard large portions of a crop during the season because markets did not materialize. Although the demand for products may vary, prompt servicing of the landscaper's and farmer's needs is the cornerstone of a successful business relationship.
Retail growers produce crops to sell through their retail operation. A retail grower's crops may include some of the crops that a wholesale-daily sales operation produces. The exact product mix depends on the retail outlet. For instance, a retail grower with a garden center may produce crops for sale from mid-March through October. In contrast, a retail florist may produce crops for sale year-round with the majority of the production between January and June.
To increase the number of crops that can be grown in a single year and decrease the amount of time the crop is in the greenhouse, retail growers often purchase prefinished crops, which they grow on a flower. For example, a grower may receive prefinished poinsettias in the first week of October and then grow them for 10 weeks until they flower. Traditional wholesale growers would have the same crop in their greenhouse for more than 17 weeks. Another strategy that works for retail growers is to produce crops that are not available from wholesalers during peak market periods. During the spring, garden centers may have trouble purchasing high-quality flowering baskets, geraniums, impatiens and begonias from wholesalers. Some retail growers produce only those crops that are in short supply and purchase the remainder of the products they need from local suppliers.
Whether to undertake a retail operation depends mainly on two factors. The first is simply the grower's interest in retailing--many do not want to deal with consumers on a daily basis. The second factor is zoning restrictions, which prohibit many growers from conducting full-service retail operations on their property. Check with the appropriate county zoning office before beginning retail sales.
Specialize or Generalize?
Both wholesale and retail growers must decide whether to specialize or generalize their crops. Specialty growers improve their capability of efficiently producing a top-quality crop. When growers are able to reduce costs and improve quality through specialization, their products are more competitive than plant material imported from outside the region. A common error new growers make is trying to diversify when they are still too small to service any one market. When small growers devote a major portion of their production area to one crop, they are able to improve their production program and become well known in the marketplace. The best advice is to first determine your options and then decide which option will become profitable most rapidly.