Oregon Nursery Industry Grows into National Powerhouse
Oregon Prosperity Project
Industry Spotlight
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OREGON UPDATE
Oregon is a diverse state. From a rich natural resource base to its robust manufacturing industry, Oregon features an impressive variety of activities, events, people, and businesses. The Prosperity Project works to highlight that diversity by providing a closer look at the industries that define the state.
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National Powerhouse
It’s not surprising that nursery and greenhouse plants are Oregon’s No. 1 crop. The state’s climate is well-suited to a variety of popular plants. The industry’s products fit well with the image of the “Oregon brand,” which has become popular nationally and helped boost several agriculture-related industries. And Oregon growers have long been known for quality. Through the hard work and innovation of hundreds of businesses and their employees, Oregon has grown to be the nation’s third-largest producer of nursery and greenhouse products, with $948 million in annual sales, 22,859 workers and $327.6 million in annual payroll. Oregon leads the nation in production of more than 20 different plant species and is No. 1 in three broad categories of trees – deciduous shade trees, deciduous flowering trees and coniferous evergreens. But it will require persistence and innovation, two traits Oregon nursery businesses have shown they have, to stay at the top amid rising challenges. Immediate concerns include increased operating costs in Oregon and uncertain economic conditions nationally. Labor costs are a particular concern. The two states ahead of Oregon – California and Florida – have much larger populations, and growers therefore are less dependent on out-of-state sales than their counterparts here, who sell 74 percent of their products outside of Oregon. The dependence on out-of-state sales makes Oregon growers particularly vulnerable to increased production costs. West Coast states have higher minimum wages and stricter labor and environmental regulations than many competitors in other parts of the country. Since Washington and California have larger populations – and more in-state retail customers relative to the number of growers – those nurseries in those states are in a better position to pass along increased costs. And the minimum wage isn’t the only reason operating costs in Oregon have risen in recent years. New state mandates such as paid sick leave also have increased total compensation costs. And these changes have come at a time when a strong economy and changes in federal immigration policies have made it more difficult to find workers. These colliding circumstances produces difficult financial calculus for nursery-related businesses. “In the end, production costs intersect with competitiveness and pricing,” said Jeff Stone, executive director and CEO of the Oregon Association of Nurseries (OAN). If growers have higher prices than competitors, they must either reduce already slim profit margins or raise prices and risk losing business. More decisions affecting labor costs will be made in the Oregon Legislature and Congress in the coming year. Economists also warn the economic expansion, which already has set a record for duration, probably has only a couple years left in it. All of this creates uncertainty, but the industry is taking a proactive approach on one labor variable it can help control – training and recruitment. OAN and its members support horticultural programs at Oregon State University and Mount Hood and Clackamas Community Colleges and fund scholarships. The industry also supports outdoor school and Future Farmers of America, two programs that allow students from urban culture to see the value of a profession that allows them to work outdoors.

Oregon Prosperity Project - Industry Spotlight
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