Welcome to MFGA News
At the start of our busy growing season, we are offering members a quick glance at news they can use. This will be a monthly publication with breaking news items of interest to members.
We’d love to showcase our members—feel free to send photos, stories, and profiles of your business—short glimpses of our green industry businesses at their best!
Pesticide Licensing Guidelines
It’s Spring, when there is a high volume of individuals taking the Pesticide Exam. There are issues that can affect whether or not someone can obtain a pesticide license. Be prepared and watch the tutorial video on how to take the exam: MDAR, Pesticide Program Exam Demo. MDAR rules and guidelines: download. For more information, visit the Using Pesticides page.
SNEAK PEEK: 2022 Input Cost Pressures Continue
Created 03/10/2022
By Charlie Hall, Chief Economist, AmericanHort
The Index of Prices Paid by Growers report, first developed by Dr. Charlie Hall in 2017 as part of the Your MarketMetrics industry benchmarking program, will be released in the next couple of weeks, but our Chief Economist is providing a sneak peek for this issue of Connect. The report documents the inflationary pressures on the most important inputs used by green industry growers. Each cost-related line item is weighted by its relative share of total COGS and by using this methodology, a weighted average rate of inflation in the prices of these grower inputs is estimated.
Results from this indexing analysis indicate that the summary weighted Index of Prices Paid by Growers ranges from 100 in 2007 to a high of 145.8 in 2021. This means that the overall cost inputs used to produce nursery and greenhouse crops is almost 46% higher in 2021 than it was in 2007, with labor experiencing the largest increase (53.1% higher in 2021) among these inputs. The year-over-year (YOY) increases are also calculated and the tracked expenses in 2021 increased about 9.6% over what they were in 2020. Based on separate econometric models for each input using market research across the allied trade sector (and conversations with allied trade pundits associated with producing these inputs), another 5.3% increase in input costs is forecast for 2022.
SNEAK PEEK—Click for more details.
The three individual components of the index that experienced the largest cost increases since 2007 included containers, labor, and the cost of freight and trucking, which are 65.1%, 53.1%, and 43.1% more expensive, respectively, than they were in 2007. Labor has been a two-fold dilemma for growers with the cost and availability of labor being a severe limitation for nursery and greenhouse growers alike. The search and acquisition costs for labor have also increased, on top of the increased wages and associated burden of labor. All other categories of costs have also experienced increases since 2007.
Of course, there may be further adjustments that manufacturers, distributors, and other allied trade firms will need to make in their respective 2022 price schedules because of the uncertainty that exists in the marketplace currently. Three in particular involve: (1) plastics-related inputs where container and plastic sheeting prices continue to be in a state of flux because they are correlated to petroleum, resin, and energy prices that are currently erratic due to winter storms across the country and other geopolitical forces (e.g. Russia invading Ukraine); (2) short-term freight pricing resulting from expected tonnage increases associated with continuing e-commerce pressures, exacerbating limited trailer supplies and driver shortages; and (3) the methodology underlying the adverse effect wage rate is still in flux politically which could affect the rate of growth in labor costs. Any of these factors (or other unforeseen events) may translate into higher/lower levels of input cost increases that are currently forecasted for 2022.
Index of Prices Paid by Growers in the Green Industry 2007–2019 (2007=100)
Once released, the full report will be available on the YourMarketMetrics.com website, and the video version of the Industry Insider Report will be on the AmericanHort Knowledge Center.
MassGrown Exchange
MDAR’s Exchange connection includes flower growers and buyers. Sign up to post jobs and find suppliers, products and service. Register to list your flowers and plants, search and post for free here. Tour the platform here.
Call for Entries!
Enter the MDAR and Mass Ag in the Classroom 2023 photo calendar contest. Showcase your plants and your business—MFGA is the May sponsor. Deadline is July 1. More information here. Hint: submit high resolution and horizontal photos!
Application Period Open for MDAR’s Viability Grant Programs
MDAR is accepting applications from Massachusetts farmers who wish to participate in one of the Department programs that help with farm viability in Fiscal Year 2023. The Request for Response containing program details and the application form is posted through a link on each program website. If you would like an application mailed to you, contact the program coordinator listed. The due date for all these three applications is Tuesday, April 26, 2022.
For more information and a FVEP application, go to: Farm Viability Enhancement Program (FVEP) | Mass.gov or email Melissa Adams or call her at 413-726-2001.
