
As an agricultural economist working
in the horticultural industry, I am often asked about
prices and quantities produced or about costs and
benefits. Sometimes I get asked about current or
deflated prices, about real or perceived value, or about
the true value of products in the marketplace. Depending
upon the questioner or the audience, the answers can
take different forms.
Ask me about the cost
of bringing a new seed variety to market, and I
might talk about years of breeding and selection
work, years of production trials and time to build
up parental lines, time for preparing marketing
plans, and then time for producing and marketing
the seed crop. In total, this process can easily
take seven to eight years. Seed production, itself,
often involves off-shore facilities, hand pollination,
careful screening to prevent cross-contamination,
worries about insect or disease damage, and the
strictest sanitation to guarantee clean seed stock.
I am often amazed that there are many varieties
still on the market that sell for a fraction of
a cent per seed wholesale that might end up for
a cent or two at the professional grower level or
for a few pennies per seed at retail. It all seems
like too great of a bargain at times.
If a question about costs is directed to me from
a consumer, I often begin by asking what services
are going to be included. It is one thing to buy
a simple blooming plant at a retail garden center
or mass marketer. If that plant is grown to a larger
size or becomes a component in a mixed container,
its value can change dramatically due to the extra
time spent watering, fertilizing and caring for
the plant, the extra greenhouse heat needed when
the plant is started earlier to achieve that size,
or for the value-added container in which it is
grown.
It is quite another topic if a professional landscaper
is installing the plant. And if the landscaper is
expected to care for the plant all season long,
then we're talking about an entirely different tier
of costs. I have seen the same four-inch geranium
which might sell for $3 to $5 at retail, depending
on the market, sell for $7 to $10 installed, or
for over $30 to $35 per plant if a season-long maintenance
contract is involved. Such a contract might include
the original planting and mulching, weekly dead-heading
of spent blossoms, monthly fertilization, weekly
watering if there is no rain or irrigation system,
and removal at frost. Both the $3 dollar plant and
the $35 plant with perpetual care might be considered
bargains, depending upon the circumstances.
An entirely different discussion might ensue if
the discussion of value was centered upon the "worth"
of a plant. I was recently forced to consider the
value of a floral planting from several different
perspectives in the same conversation with a group
of interested homeowners. Folks were contemplating
adding a major floral presentation at the entrance
to a subdivision. There was some contention over
the costs of the project versus the worth to the
homeowners. Some homeowners noted sales in the subdivision
were slowing and suggested "beefing up"
the entrance would not only make a statement about
the subdivision to the "outside world"
but was almost required considering what other subdivisions
in the vicinity were doing. Other homeowners feared
the additional costs in homeowner assessments and
questioned the worth considering the entrance plantings
would only be seen by passersby. In the end, a third
perspective was offered by the landscaping service;
the company owner wanted to donate the plants and
care, as the planting would serve as a signature
for his efforts in a way that regular lawn, tree,
and shrub care could not.
As I considered the arguments, before the landscaper's
offer was forwarded, I looked for a good measuring
stick. Knowing everything I know about the societal
benefits of green spaces about which many of these
columns have been written, I wondered if the homeowner
cost of the project should be compared to less than
the cost of a gallon of gas per homeowner per month.
Should the cost of the project be compared to less
than a dime per day? What value could be used to
communicate the true value of the project for these
homeowners? At what price would the majority feel
the cost was justified?
While
I struggled to answer the questions to everyone's
satisfaction, I knew it was a debate about real
versus perceived values, about expenses versus investments,
about costs versus benefits. When a person buys
fresh cut flowers, he or she often perceives them
very differently whether buying them in a supermarket
and taking them home to a waiting vase or from a
florist with combined artistic expression and expertise,
perhaps, accompanied by a fancy container and some
delivery services. The supermarket bunch of flowers
may be equally appealing to some folks for some
occasions as the fancy florist arrangement, but
sometimes the preference is to include additional
services. For instance, most probably would prefer
dealing with a caring florist for wedding or funeral
flowers or for celebrating that special occasion.
Many even prefer choosing the florist's expertise
on a regular basis. (Incidentally, research has
shown that the best floral consumers can appreciate
both venues for what they offer.)
In similar fashion, flowers at this subdivision
entrance have a value that goes beyond the cost
of the plants, whether or not it is always appreciated
by each homeowner. If the planting helps to attract
buyers thereby reducing home vacancies, it will
have paid for itself in increased neighborhood security.
If the planting draws a few more folks to tour the
subdivision, and this extra traffic helps to deter
crime, this provides another bonus. If the planting
increases property values in an otherwise soft market,
yet another extra might be tallied.
The planting's value increases exponentially if
curb appeal is considered, for curb appeal begins
at the subdivision entrance and goes to the front
door of each home. The plants provide not only esthetics,
but they declare to the world that this community
has pride. Pride is just one of the attributes that
has yet to be packaged and which has yet to be priced.
Along with the residents' pride, a certain esteem
could grow for this subdivision from the outside
community. This, too, would be hard to value separately
or adequately.
Our America in Bloom web site, www.americainbloom.org,
has a resources tab that is loaded with studies
demonstrating the benefits of flowers and plants,
shrubs and trees, lawns and groundcovers. Also,
please consider attending the
AIB's Annual Symposium and Awards Program. Issues
similar to this debate will abound.