floriculture production business plan

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Cut Flower Production

Flower Production

According to the 2009 Census of Horticultural Specialties (which is conducted by the National Agricultural Statistics Service every ten years) production of cut flowers is worth over $400 million annually in the United States. More than 90 percent of that production was sold on the wholesale market to florists and other outlets. These data do not reflect the contributions of small-scale and part-time growers with sales less than $10,000. Many growers are producing a small amount of cut flowers to enhance their direct-marketing product mix. With few exceptions, most producers grow fewer than 5 acres of flowers.

At present, the vast majority of cut flowers are imported from overseas. Leading producers include the Netherlands, Columbia, Kenya, and Israel. Flowers imported from overseas are largely roses, carnations, Gerbera daisies, garden mums, and orchids. These flowers ship reasonably well and make up the bulk of the flowers used in arrangements by most florists. Most of the flowers that local growers focus on are those that do not ship well or have shorter postharvest vase lives. These flowers have come to be termed "specialty cut flowers." Examples of specialty flowers include sunflowers, zinnia, lisianthus, dahlia, ageratum, and peonies to name but a few on this long list. Local growers can readily develop a market niche with these flowers by using the advantage of longer vase life if produced locally, higher percentage of usable flowers, and a wider choice of colors and varieties.

Increasing demand for a wide variety of locally grown, fresh-cut flowers has kept this market growing in volume for years. Producing fresh-cut flowers is not for everyone, however, as they have special production requirements, as well as a fairly short shelf life. Any grower considering cut flower production should also be aware of the relatively short field growing and marketing season, especially those in the northern United States.

Fresh-cut flowers are generally sold either by the bunch, in prearranged bouquets, or individually. Some growers will set up u-design displays at markets along with pre-made bouquets. Six basic marketing alternatives are available to the cut-flower grower: wholesale markets, direct to florists, pick-your-own operations, roadside stands, farm markets, and subscription. Floral cooperatives, while standard in much of the rest of the world, have yet to take root here.

Because freshness is always a consideration, astute cut-flower growers should always seek to streamline the process from the farm to final consumer. As with marketing most annual crops, entering the market early with a quality product will help attract (and retain) customers to your business and usually command a higher selling price.

When planning production, first consider your ability to market. You should conduct some market research because growers often overestimate their ability to sell in a given market. Production of less than one acre of many floriculture crops is typical for most growers.

With the wholesale option, you typically either deliver your crop to a distributor or have them pick up the flowers at your farm. Wholesalers generally buy and resell your flowers for a predetermined price that can change during the season. This marketing alternative is subject to the greatest price fluctuation as product rapidly moves in and out of the wholesale marketplace. Wholesale prices also vary based on regional, national, and international flower inventories.

Florists should always be a primary consideration when developing your flower marketing plan. Market surveys indicate that many florists show at least some willingness to purchase locally grown cut flowers. With the generally high quality and wide selection available through florists' regular market channels, their expectations for service and quality are high. Emphasis on a broad selection and freshness may open florists' doors to locally produced cut flowers. Some growers start selling to florists by bringing a van-load of flowers to their shop and inviting the staff out to check out their selection.

Pick-your-own, roadside stands, and farm markets (both on the farm and at organized farmers markets) have the potential to generate substantially higher prices for the grower. Most new growers enter flower marketing through one of these avenues as they provide the greater level of inventory flexibility that new growers will likely need as their production skills develop. For more on establishing a roadside market, see Developing a Roadside Farm Market .

Subscription sales are an offshoot of the Community Supported Agriculture (CSA) movement. Most CSAs are based around produce sales with each member purchasing a share of a farm's production. This is a contract between the growers and their members that provides for a weekly portion of fruit and vegetables based on production and subscription level. If a crop is lost, everybody loses; if there is a bumper crop, everybody wins. Some CSAs provide flower shares as part of the contract or as an option. Another option under subscription sales is in providing vase service to restaurants, country clubs, and professional offices.

Most flower prices are quoted for bunches of ten with specific stem lengths or individually for large flowers, such as sunflowers, or very expensive items, such as orchids.

Generally, prices paid are substantially higher at growers markets in urban or suburban areas than those paid in rural markets. A direct-market grower should provide only the freshest, highest-quality product in order to develop a solid niche in locally grown flowers. A list of commonly grown cut flowers grown for sale in the United State is provided below.

Common types of cut flowers grown for sale in the United States:

• Alstroemeria (stems)
• Anthurium (stems)
• Aster (stems)
• Bird of paradise/Strelitzia (stems)
• Calla lilies (stems)
• Carnation (stems)
• Chrysanthemum (bunches)
• Daffodil/narcissus (stems)
• Delphinium/larkspur (stems)
• Freesia (stems)
• Gerbera daisy (stems)
• Ginger and heliconia (stems)
• Gladioli (spikes)
• Godetia (stems)
• Gypsophila (bunches)
• Heather (bunches)
• Heliconia (stems)
• Iris (stems)
• Leptospermum (stems)
• Liatris (bunches)
• Lily (stems)
• Limonium (bunches)
• Lisianthus (stems)
• Marguerite daisies (stems)
• Orchid (blooms)
• Protea (stems)
• Rose (stems)
• Snapdragon (spikes)
• Statice (bunches)
• Stephanotis (blooms)
• Stock (stems)
• Sunflower (stems)
• Tulip (stems)
• Zinnia (stems)

Getting Started

The basic equipment needed to start producing cut flowers is very similar to that needed by a small direct-market vegetable grower. Small equipment such as rototillers, a low horsepower tractor, and irrigation equipment are typically the only major purchases outside of growing materials that you will need. As many annual, perennial, and woody plants are worthy of consideration for production, planning your planting takes some care.

Production Considerations

Site selection.

The vast majority of cut flowers prefer a well-drained site. Having deep, fertile soils will greatly simplify the process of site development, but soils can be improved through cover cropping, the application of composts and manures, and other soil-building practices. Conducting a soil test prior to planting and applying lime and fertilizer according to the soil test recommendations is highly recommended. Soil test kits may be obtained at your local extension office. Installing drain tile or building raised beds may offer an adequate solution for sites with poor drainage or very shallow soils. Raised beds are fast becoming a standard practice in growing higher-value produce and flowers. They provide for an earlier crop by allowing the beds to be heated by the sun on the sides as well as on the top. They can also boost production by increasing the depth of topsoil. When used with plastic covering for weed control and drip tape for fertigation, raised beds can greatly decrease weed pressure and simplify fertilizer application.

Most new growers begin by planting everything by hand. The need to plant many different flowers in small plots over a long time period tends to keep planting largely a hand operation. Plants such as sunflowers are both direct seeded and transplanted, while others are best started as plugs (starting the plant in a greenhouse or cold frame in flats with small cells in a planting medium) and then transplanted to the field or bed. While traditional vegetable transplanters can easily do double duty in planting many types of cut flowers, many growers continue to place all their plugs by hand. Spacing between plants varies widely within each species and sometimes by individual cultivar as some plants are much larger than others. In general, cut flowers are planted closely together to encourage growth of longer stems. New growers will want to learn the specific demands of each flower in order to get the best production.

Any high-value crop should be irrigated to ensure more reliable production. Most flower growers use drip irrigation tape either under plastic or laid on top of the ground to maximize water efficiency, keep water off the leaves and flowers (this improves overall quality as it prevents foliar diseases and chemical stains), and provide for fertilizer or chemical application. In addition, a steady, reliable supply of water ensures production of the longest stems possible.

Wind Protection

Producing high-quality cut flowers requires preventing wind damage since bent flower stems have little or no value. Therefore, wind protection through both site selection and use of windbreaks is necessary when planning your operation. Windbreaks can be live plants, such as an evergreen hedge, or fencing materials, such as split bamboo or board-on-board planking. Whatever method you choose, it is important to consider how far the most distant flowers are from the windbreak. The farther away the windbreak is, the less effective the protection. Sometimes, multiple windbreaks are required. Many cut flowers require stem support as well. Several wide-mesh products are available that can be used as a grid for the flowers to grow through, thus giving them support. Support mesh also prevents damage by keeping flower stems upright during heavy rain.

High Tunnels and Greenhouses

The short outdoor production season in the northern United States has encouraged the adoption of growing structures to lengthen the marketing season. Having overhead cover also prevents damage to blossoms due to rain. Unheated greenhouse frames, such as high tunnels, can meet this need with a modest investment. These structures provide ventilation by rolling up the sides and, if equipped, through roof or ridge vents. The additional radiant heat stored in a high tunnel allows for a planting date 4-6 weeks prior to the outdoor season and may allow another 4-6 weeks of production in the fall after the first frost. Some growers place small heaters in their tunnels to allow for an additional 2 or more weeks of season extension.

A greenhouse is a climate-controlled environment with heat and ventilation carefully managed for maximum plant growth. Greenhouses can look very similar to high tunnels, but they are much more expensive to construct and maintain due to their more sophisticated structure and environmental controls. Producing flowers in a cost effective manner may not be possible in a greenhouse due to the high cost per square foot of production area. Many growers use smaller greenhouses to produce transplants for use outdoors or in high tunnels versus using the space for flower production.

Pest Control

Cut flowers represent a wide group of plants. There is a significant difference in pest problems among each genus, species, and cultivar. Discussion of the range of pest-management options available to cut-flower growers is beyond the scope of this publication. As a new grower, you will want to do some careful research into each plant that you choose for your operation. When possible, select those that are indicated as relatively pest free. Keep careful records of those that you do select and scout your plants often for pest problems. Detecting a pest problem early will usually make controlling it easier and less costly.

While a wide variety of insects will inhabit any flower planting, only a few are recognized as causing economic damage, including aphids and thrips. There are wide differences in not only pests but also tolerance to specific pests. Biological, biorational, and synthetic chemical controls are available. Pest populations can also be controlled by naturally occurring parasites and predators. Avoiding cover sprays of broad-spectrum insecticides will help maintain these populations. Beneficial insects, such as lacewings, can also be purchased from biological control companies. Biorational controls include horticultural oils, insecticidal soaps, and plant extracts such as neem oil. These typically have short residuals and minimal impact on beneficial organisms. It may be necessary to use synthetic chemicals for insect control at times. Always use products labeled specifically for the use you intend and seek to use materials that have the lowest toxicity to bees.

Fungal diseases can have a major impact on cut-flower plantings. While many diseases will not kill the flowers, they can drastically reduce their marketability. Powdery mildew can be a real problem in zinnias and many other flowers. Many seedlings are susceptible to damping off, and a number of leaf spot fungi can also reduce the value of certain species. Good crop rotations, careful selection of cultivars, maintenance of optimal growing conditions, and control of weeds and insects will significantly reduce the incidence of diseases.

Weeds are generally controlled best through good preplant soil preparation. Using a cover crop will not only add valuable organic matter to increase soil tilth, but many cover crops will also outcompete or suppress weeds. Cereal rye, for example, can provide significant weed control through smothering and suppression from natural herbicides produced by the rye. Other cover crops, such as hairy vetch, will add significant nitrogen to the soil and attract many beneficial insects as well. These cover crops are traditionally planted the prior year and are usually tilled under prior to planting your flower crop.

Using a preemergence herbicide labeled for use in flowers is another avenue worth considering. Only a handful of herbicides are currently labeled for flower production. In general, it is very easy to find an herbicide to control both pre- and postemergent grasses in flowers, but the choices for broadleaf weed control are very limited because many flowers are closely related to these weed types. Planting plugs alleviates much of this problem as well-chosen preemergent herbicides seldom damage well-established plants. The Penn State Extension publication Controlling Weeds in Nursery and Landscape Plantings (available for free through your local extension office) is a good source of information on herbicide use in flower production. Make sure you read the product label and understand the proper uses of any herbicides before you apply them.

Many growers decide to use plastic mulch for weed control. This has many advantages over herbicides in that it works on all weeds and will prevent mud from splashing onto the flowers as well. Until recently, the only choice was black plastic, which worked well. Now research is exploring many of the new, colored plastic mulches. In vegetable production, research conducted on some of these colored mulches has shown them to increase yield and decrease pest populations.

Some of the pesticides that may be used in cut-flower production are restricted-use pesticides and require a pesticide license to purchase. Pesticide applicators tests are usually administered at county extension offices, so you should contact your local office for dates and times of these examinations. When using any pesticides in your enterprise, remember to follow all label recommendations regarding application rates and personal protection equipment (PPE) requirements. Also remember that any Worker Protection Standards (WPS) apply both to you and your employees.

Harvest and Postharvest Handling

Flowers are best harvested in the morning after the dew has dried but before the heat of the day because the flowers are cooler and will suffer less heat stress and better retain their quality. Packing damp flowers close together for shipping will promote the development of Botrytis (gray mold), which will render the flowers unfit for sale. Rapidly cool the harvested flowers or at least remove them from direct sunlight. Many flowers benefit from the use of floral preservatives. Some flowers, such as yarrows, are best harvested as soon as pollen is evident, while sunflowers are best harvested as soon as the flower is almost completely open. Again, knowing the characteristics of each flower you decide to grow is critical to producing a high-quality product. Planting small test plots prior to entering actual production will aid in the flower-selection decision-making process.

Environmental Impacts

In the normal course of operations, farmers handle pesticides and other chemicals, may have manure to collect and spread, and use equipment to prepare fields and harvest. Any of these routine on-farm activities can be a potential source of surface water or groundwater pollution. Because of this possibility, you must understand the regulations to follow concerning the proper handling and application of chemicals and the disposal and transport of waste. Depending on the watershed where your farm is located, there may be additional environmental regulations regarding erosion control, pesticide leaching, and nutrient runoff. Contact your soil and water conservation district, extension office, zoning board, state departments of agriculture and environmental protection, and local governing authorities to determine what regulations may pertain to your operation.

• Risk Management

You should carefully consider how to manage risk on your farm. First, you should insure your facilities and equipment. This may be accomplished by consulting your insurance agent or broker. It is especially important to have adequate levels of property, vehicle, and liability insurance. You will also need workers' compensation insurance if you have any employees. You may also want to consider your needs for life and health insurance and if you need coverage for business interruption or employee dishonesty. For more on agricultural business insurance, see  Agricultural Business Insurance .

Second, check to see if there are multi-peril crop insurance programs available for your agricultural enterprises. There are crop insurance programs designed to help farmers manage both yield risk and revenue shortfalls. However, individual crop insurance coverage is not available for all crops. If individual coverage is not available for what you grow, you may be able to use the AGR/AGR-Lite program to insure the revenue of your entire farm operation. To use AGR-Lite you must have five years of Internal Revenue Service (IRS) Schedule F forms. For more information concerning crop insurance, contact a crop insurance agent or check the Penn State Extension website.

Finally, the USDA Farm Service Agency has a program called the Non-Insured Assistance Program (NAP) that is designed to provide a minimal level of yield-risk protection for producers of commercial agricultural products that don't have multi-peril crop insurance coverage. NAP is designed to reduce financial losses when natural disasters cause catastrophic reduction in production. NAP coverage is available through your local USDA Farm Service Agency office. The application fee for this program may be waived for eligible limited-resource farmers.

Sample Budget

Included in this publication are two sample cut-flower production budgets. These budgets utilize custom hire for some of the field work. Hiring custom operators and labor may be a more viable option for small-scale or beginning producers considering the large capital expenditures required for equipment. You should also investigate renting specific pieces of equipment like plastic mulch layers. Producers who own equipment should substitute equipment costs for the custom-hire costs in the budgets. The budgets summarize the receipts, costs, and net returns of a cut-flower enterprise producing sunflowers and lisianthus. These sample budgets should help ensure that all costs and receipts are included in your calculations. These budgets can also be used as the basis for developing budgets for other types of cut flowers.

Costs and returns are often difficult to estimate in budget preparation because they are numerous and variable. Therefore, you should think of this budget as an approximation and make appropriate adjustments in the "Your Estimate" column to reflect your specific production and resource situation. More information on the use of crop budgets can be found in Enterprise Budget Analysis .

You can make changes to the interactive PDF budget files for this publication by inputting your own prices and quantities in the green outlined cells for any item. The cells outlined in red automatically calculate your revised totals based on the changes you made to the cells outlined in green. You will need to click on and add your own estimated price and quantity information to all of the green outlined cells to complete your customized budget. When you are done, you can print the budget using the green Print Form button at the bottom of the form. You can use the red Clear Form button to clear all the information from your budget when you are finished.

Sample Budget Worksheets

• Sample Cut Flower Budget-Lisianthus
• Sample Cut Flower Budget-Sunflower

Initial Resource Requirements - Lisianthus

1,000 sq ft

$1,000-1,200

$2,300-2,500

• Rototiller or small tractor (20-30 hp)
• Mulch layer
• Planting tools or equipment
• 5-gallon buckets (for harvesting)

Initial Resource Requirements - Sunflower

$1,200-1,400

$2,500-2,800

For More Information

Publications.

Armitage, A. M., and J. M. Lushman, Specialty Cut Flowers:The Production of Annuals, Perennials, Bulbs, and Woody Plants for Fresh and Dried Cut Flowers , 2nd ed. (Portland, Ore.: Timber Press, 1993).

ATTRA, Field Grown Cut and Dried Flower Production and Marketing (information pkg). Phone: 800-346-9140.

Byczynski, L., and R. Wimbiscus, The Flower Farmer: An Organic Grower Guide to Raising and Selling Cut Flowers (White River Junction, Vt.: Chelsea Green Publishing, 1997).

Gill, S., E. Dutky, R. Balge, W. MacLachlan, and S. Klick, "Production of Celosia as Cut Flowers," "Production of Yarrows as Cut Flowers," "Production Annual Sunflowers as Cut Flowers," and "Production of Asiatic and Oriental Lilies as Cut Flowers" (Riverdale: University of Maryland Cooperative Extension Service).

Sellmer, J., and T. Harpster, Controlling Weeds in Nursery and Landscape Plantings (University Park: Penn State Extension, 2012).

Sturdivant, L., and P.S. McRae, Flowers for Sale: Growing and Marketing Cut Flowers: Backyard to Small Acreage (A Bootstrap Guide) (Friday Harbor, Wash.: San Juan Naturals, 1994).

Association

Association of Specialty Cut Flower Growers 155 Elm Street Oberlin, OH 44074 Newsletter: The Cut Flower Quarterly

Growing for Market A monthly newsletter covering many small farm issues, very strong in cut-flower production and marketing (subscription is $33 per year) PO Box 3747 Lawrence, KS 66046

Prepared by Steven M. Bogash, retired extension educator; Thomas G. Ford, extension educator, Blair County; Lynn F. Kime, senior extension associate; and Jayson K. Harper, professor of agricultural economics.

Portions of the information for this publication were obtained with support from the Northeast Sustainable Agricultural Research and Education program.

• Farm Management
• Production Economics

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Cut Flowers

Where to Start – Information for Beginning Cut Flower Growers

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Many people dream of owning their own business. Typically businesses are started small, possibly from a hobby such as gardening, and developed into a viable self sustaining business. Occasionally a thriving business can be purchased. Many people are attracted to the floriculture industry because of their interest in growing plants. However, actual plant production accounts for only a portion of what is required for a successful business:

• Grow a quality product
• Sell the crop
• Handle / Store / Transport the crop
• Production efficiency
• Business management
• Make a profit

Floriculture businesses must be equally adept at marketing their crops and managing the business to generate a profit and justify the financial investment. Without the latter two components, a business will not survive. New businesses should realize that it usually requires 3 to 5 years for the business to show a profit and owners should plan accordingly. Prior to starting a business, a number of considerations must be made.

• The first step is to determine if you have the right personality to own and operate your own business. Visit with people who already own their own businesses. Are you ready for the time, responsibility and commitment required? Analyze your strengths and weaknesses. Are you a natural grower, people manager, or sales person? Do you dislike managing people or handling customer complaints? Enlist the opinion of family and close friends to help you evaluate your skills and deficiencies. You do not need to be able to do everything well but you must be able to hire or partner with others who have the skills and traits you lack.
• Obtain sufficient capital to start the business and operate until it makes a profit. Unless you are quite lucky, your business will not make money the first year and may not for several years. You must not only have enough money to keep the business operating until it is profitable but also to support yourself, and possibly your family during that time. Even after the business is profitable, it may not make enough money to allow you to pay yourself enough to live on for several more years. Field cut flower production operations typically do not require much initial capital but a number of major expenses might be needed (although, not all at once generally) including irrigation, cooler, greenhouses for propagation or production, hoop houses, and delivery vehicle.
• Determine if there is sufficient market for the products or services your business will offer. If you are selling to the general public, are there enough customers within your area to support your business? Define the area you intend to reach. Direct retail will depend on people who can readily drive or walk to your business, which generally means that you must be in or close to a metropolitan area. Selling wholesale may allow you to reach a broader area, such as a hundred mile radius, but will require you to deliver the product. See the next point also.
• Is there demand for the products or services your business will offer? Your potential customer base may be large enough but may not be able to support your business if there are too many competitors already in the market. Analyze your competition. Are there products or services that they do not offer? Define your niche – in other words, why will your customers buy from you rather than from someone else? Remember lower prices will not work in the long run. That strategy only works for large companies who can produce or sell large amounts of products and services and make money through economy of scale.

It may be wise to list out two types of customers. The primary customers are those who you anticipate will buy most of your products or services. They are the ones that you will direct most of your marketing towards. Secondary customers are those who may purchase some of your products and services but not in large enough amounts to support the business. You should always consider your secondary customers, especially in case your primary customers fail to support your business, but do not pay so much attention to secondary customers that you lose your primary customers. For example, a cut flower grower may target florists as there primary customers and have wholesalers or a grocery store as their secondary customers. The following are options for marketing outlets.

MARKETING OUTLETS

Growers use the following marketing methods to sell product directly to the public.

FARMERS MARKET

Farmers markets are a relatively easy marketing method for new growers of cut flowers. Overhead costs are generally low and most, if not all, of the advertising and organization duties are handled by the farmers market organization. The time spent selling product is usually limited as farmers markets are only open for a few hours a day and a limited number of days each week. Customers expect to buy directly from the producer and typically are not as concerned about packaging. Prices can be high because the product is considered fresh from the grower; however, in some cases they may be lower if customers are expecting a Abargain@ by buying directly from the grower.

ROADSIDE STAND

As with farmers markets, the overhead costs on roadside stands are usually low. The stand can be operated directly from the growing location (see also on-farm sales, below) or can be set up at a highly visible location near or in population centers. Often bedding plants and fresh and dried cut flowers are sold with fruits and vegetables. The floriculture crops are compatible with the edible products in that the bright, eye catching colors of flowers can alone bring in customers. As with farmers markets, prices can be high, depending on customer expectations.

ON FARM SALES

On farm sales have been developed more extensively in the fruit and vegetable industries but are readily applicable to floriculture. On farm sales can range from something as simple as a roadside stand to a pick your own field cut flower operation to a fully developed family entertainment center with animals, areas for children, tours, and educational displays. Floriculture crops such as cut flowers or bedding plants are often sold with fruits and vegetables. One appeal of on farm sales is being able to manage all aspects of the business from the farm. Of course, the drawback is the need to maintain the farm in a highly presentable condition. Location is especially important as the general public must be able to easily locate the business, yet retain a rural image.

The traditional florist shop is a major outlet for cut flowers. Florists sell large amounts of cut flowers and foliage, usually in the form of flower arrangements. Florists also sell decorated potted flowering and foliage plants. Much of the florists sales are based on events such as holidays, birthdays, funerals, anniversaries, and parties. In addition to local sales, florists act as agents for nationwide floral wire services, such as American Floral Services (AFS) or Florist Telegraph Delivery (FTD). To send flowers to a friend or relative in a distant location, customers contact their local florist who wires or sends the order to a florist in the second location.

MASS MARKETS

Mass market outlets are those companies including grocery stores, department stores, and other stores that sell plant materials as part of a broad range of items. Although the cut flowers may be an important part of the business, they rarely constitute the majority of sales for the business. The commitment to floriculture sales by mass markets ranges from a few buckets in the vegetable section to full service florists or garden centers that operate the entire year. Mass markets often focus on daily or impulse purchases. A large portion of floriculture products are sold through mass market outlets in the United States.

WHOLESALERS

Wholesalers bring in product from numerous growers allowing the retailers to obtain all, or most all, their cut flowers from one location. From the grower=s point of view, prices received from the wholesaler tend to be low, but so are marketing costs. The price per unit must be recovered by efficiently growing and selling large volumes of plant materials. Wholesalers are also concerned with buying from reputable growers who will be able to deliver a consistent and high quality product.

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