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AmericanHort Industry Insider Report: A Perspective on Profit Margins

What would it take to accurately measure costs in the green industry?

It takes a curious economist, 25 passionate industry businesses, and a shared mission of increasing the industry’s profitability.

It’s no secret that grower input costs have risen over the past 10 years, nor is it a surprise that the prices we charge for plant products haven’t kept up. As a result, profit margins have slowly been “squeezed,” making it harder for green industry businesses to stay in business and compete economically.

Join us to learn what’s happening to the industry’s profit margins.

Over the course of the next six weeks, AmericanHort will release videos and articles from our chief economist -- and lead on this study -- Dr. Charlie Hall, who will dissect key input cost areas and their impact on profit margins. Videos and articles will focus on three critical cost input areas:

  • Energy & Fertilizer
  • Labor
  • Trucking

A Perspective on Profit Margins | Episode 1: An Introduction

Margin compression is a critical industry phenomenon. Costs have increased over the past 10 years while our prices have remained the same -- squeezing profit out of the picture. 

Learn why it's time to think about pricing strategies and how to use this data to influence your decisions.

Charlie Will Discuss:

  • Industry index of prices paid by growers over 10 years
  • Data trends of cost inputs
  • What to do with this information

A Perspective on Profit Margins | Episode 2: Labor

This segment focuses on labor. Labor is the primary component of the overall industry cost structure that has increased the most, so it therefore demands the most attention.

Charlie Will Discuss:

  • Availability of Labor and why it's an issue
  • The cost of labor and why it's increased
  • The effects of labor demand and supply on the pricing index

A Perspective on Profit Margins | Episode 3: Energy & Fertilizer

This segment focuses on energy (gas, electricity, etc.) and fertilizer. The two are correlated, so learn the trends in energy over the past 10 years and how it allows us to forecast prices into the near future.

Charlie Will Discuss:

  • Trends in energy costs
  • Geopolitical influences on energy costs
  • Relationship between energy and fertilizer costs and what that means for the future

A Perspective on Profit Margins | Episode 4: Transportation

Transportation and distribution costs have increased by 17.5% since 2007, which makes it a significant part of the profitability picture for growers headed into the future. Learn what has influenced this increase and how those influences will impact future transportation costs.

Charlie Will Discuss:

  • Trends in transportation costs
  • What influences these transportation costs
  • Transportation challenges for growers into the future

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