Plant Shortages Persist

It has been almost a year since the plant shortage crisis of 2021. No doubt the status of the shortages in 2022 is the most important question right now for the industry. The short answer is that the shortages are persisting, and the industry will have to adapt. Since the nature and expanse of the plant shortages is not identical to 2021, it makes procurement and landscaping operations more challenging.

Here’s your quick primer on what’s different this year, key shortage trends that will impact your business and some helpful guidelines to cope. You can read a more in-depth analysis in the 2022 Plant Shortage Report released by GoMaterials. The report is based of off proprietary data from thousands of plant orders and estimates across the U.S.

The root cause of the shortages stems as far back as the 2018 recession, when many nursery businesses downsized their operations or were forced to close doors. It’s estimated this reduced nursery production by as much as 50 percent.

Fast-forward to 2022, rising inflation and higher input costs have further restrained the capacity of wholesale nursery businesses. Fertilizer costs, for example, have increased by almost 100 percent, in addition to higher fuel and labor costs.

In addition, supply chain blocks triggered by the pandemic are nowhere close to subsiding. Resins are still in short supply, impacting nursery pot supplies. We also have a fullblown truck driver shortage at hand, making out-of-state sourcing more challenging. On the other hand, new housing starts and federal funding have fired up the demand for landscaping and thus for landscaping plants and trees.

A first difference is the breadth of plant categories impacted by the shortages. For example, in 2021, ornamental grasses accounted for 36 percent of all shortages in the plant variety. In 2022, the shortages are more evenly spread with both perennials and ornamental grasses at 19 percent and shrubs at 25 percent.

Another key difference is the pricing trends across categories and sizes for the plants in short supply. For instance, prices for smaller pot sizes such as one- to three-gallon pots of Foxtail Fern and Pink Muhly grass have cooled off a little, pointing to a slight recovery. At the same time, new top contenders have emerged for the “hard-to-find” plant materials category.

The difference in overall price increases compared to 2021 can also be the silver lining to the shortage cloud. While many of the severely short plants reported a 40-50 percent price increase last year, the numbers are more reasonable this year. The average percentage price increase for low-stock plants and trees is reaching close to 22 percent in the South.

When it comes to sizes impacted, original shortages from last year are no longer restricted to larger pot sizes. Wax Myrtle, for example, which mainly reported a shortage of seven gallon or bigger sizes last year is becoming harder to find even in three gallon in 2022.

Part of the reason can be the industry choosing to substitute with smaller sizes to fill the immediate requirements. The net result, however, is the deepening of the shortage crisis across all sizes.

What many of us thought was a blip caused by the pandemic is turning into a chronic supply chain issue. Many of the base materials used by nurseries, such as pots, are still unavailable in the wholesale market with months of backorders pending.

A recent article in Landscape Architecture Magazine reported that some pot manufacturers are now requesting one–or two–year advanced commitments from the nurseries. This is likely to cause a more selective planting schedule for the nurseries and an increase in procurement complexity. It may become more commonplace for wholesale growers to focus on their specialty and team up with other nurseries for other types of materials to fulfill their orders.

Last, but not the least, early trends indicate that the demand for “drought-tolerant” and hardy plants will increase as more governments and cities issue new water conservation policies. Two of the top three hardest-to-find plants this year fall under the drought-tolerant category. As the busier season rolls in, more drought-tolerant plants may join the list.

The obvious question is what to do about the shortages? There are easy ideas such as working with trusted nursery partners, growing your network of partners or opting for a professional plant brokering service, such as GoMaterials. However, in a highly competitive procurement scenario, you constantly need to ask if this crisis can be resolved by just focusing on procurement. Here are a few recommendations for landscaping businesses to help stay profitable in the long term.

At times, there’s just no going around the difficult conversations. There just aren’t any good replacements for species like the Ginkgos. It’s perhaps better to take initiative and inform customers, landscape architects and city inspectors about the state of the shortages.

It’s a common industry practice to estimate jobs based on older catalog prices. However, as the plant shortages continue, old pricing equations may not be accurate, which could result in underestimating the project costs. Landscaping businesses would be better served by getting confirmations from their suppliers before bidding or accepting a project.

in Place Going by the trends this year, it’s a fastmoving world when it comes to substituting plant materials. As the industry switches gears, many projects will eventually make the same substitution choices, leading to a forever-changing shortage landscape. The importance of having multiple backup plans cannot be overstated!

To sum it up, it’s going to be yet another year of operational challenges; however, there’s a lot to take inspiration from. The consistent demand for landscape materials will help the horticulture industry build confidence to scale up its operations to pre-2008 levels again. Additionally, the plant shortages may be a blessing in disguise when it comes to increasing plant diversity.

More than anything else, updating and sharing knowledge about the latest trends can be the best way forward for the industry.

Marc Elliot is CEO and founder of GoMaterials, an online marketplace for sourcing plant materials for landscape professionals.

www.gomaterials.com