Blooming Greenhouse Industry Surpasses Tobacco

Source from:  By JOHN BOYLE Asheville Citizen-Times ETOWAH, N.C. Published Wednesday, May 05/25/2006

The new crop of homes and commercial buildings in western North Carolina may encroach on farmland, but it has a major upside for some growers, especially those in landscaping and greenhouse-related businesses. Savvy producers of flowers, perennials, shade trees and sod have tapped into a burgeoning market that has supplanted tobacco as the top crop in North Carolina. In Henderson County - long considered the apple capital of North Carolina - the nursery and greenhouse industry generates 10 times the revenue of that traditional crop. "In western North Carolina it's ever-increasing - it's one of the fastest growing segments of our market," said Ken Allison, a third-generation nurseryman with Hillside Nursery in Henderson County, which produces flowering and shade trees. "Probably in the last five years, our (regional) business has been up about 300 percent." That comes as no surprise to Brian Long, spokesman for the N.C. Department of Agriculture and Consumer Services. The downside to growth is that farmers often have to scramble to put together enough land to grow crops, or the land their family has owned for generations becomes so valuable they sell rather than pay taxes on it. "But there is no denying that when you've got more people moving into the state, obviously that's going to mean more customers for all sorts of growers," he said. "There'll be a greater demand for local food, and especially nursery and landscape products." The robust greenhouse and nursery industry has surpassed tobacco as the top crop in the Tar Heel state. In 2004, the industry generated $832 million in sales, compared to $620 million for tobacco. And that doesn't count Christmas trees, which generated another $101 million. In his nine years on the job, Cliff Ruth, an agent specializing in ornamentals for the Henderson County office of the N.C. Cooperative Extension, has seen ornamental and greenhouse-related businesses increase from 240 to more than 500 in Henderson County alone, and from about 1,000 employees to 3,000. Nine years ago, gross receipts from ornamentals totaled about $50 million. Now it's $110 million, plus another $40 million generated by landscaping business, placing Henderson second behind Mecklenburg statewide. "A lot of folks know Henderson County as apple country, but that generated about $15 million last year," Ruth said. "Last year our gross income from the green industry was 10 times our gross income from apples." In Transylvania, which Ruth also covers, green receipts tallied about $50 million. About 40 percent of the state's greenhouse products are grown within a 50-mile radius of Asheville, Ruth added, and growers supply retailers from big chains like Lowe's to independently owned garden shops. Mountain ornamental growers produce more than 3,400 species of plants and trees. Ruth knows of one producer who grows 500 types of perennials. Producers range from the huge Van Wingerden greenhouse operation in Mills River, which sprawls over 35 acres and produces more than 150 varieties of plants, to smaller operations that specialize in flowering shrubs. Other growers concentrate on "environmental landscaping" - wetland plants that developers use when they have to replace disturbed wetlands. The industry has been "one of the best-kept secrets out there," and Ruth says farmers are catching on to the financial possibilities. An acre of sod can generate $5,000, while an acre of corn doesn't produce $500, he said. But he cautions against jumping in without a business plan or the ability to market your product. "We still have an industry where three out of five don't make it," Ruth said. "In the nine years I've been here, we've had a lot of businesses open and close their doors. People try to get in it, but they don't do their homework." It's a demanding business, with higher profit margins but higher risks, too. Nursery and greenhouse producers spend an enormous amount of time scouting for insects, spot spraying, pruning, mowing and training (shaping) trees. "Once you start a nursery, you've just adopted yourself a newborn, and unless you've got a reliable baby sitter, you don't leave," Ruth said with a laugh. He estimates startup costs for a container nursery at $30,000 an acre, a field nursery at $10,000 to $25,000 an acre, and a greenhouse operation at $150,000 to $200,000 per acre. "If they're not making 20 to 25 percent, they probably shouldn't be in it," Ruth said of the desired industry profit margin. Tomato farming, by contrast, typically has a profit margin in the 15 percent to 20 percent range, while corn is around 5 percent. The profit is less, but so is the initial expense, Ruth said. Edneyville sod farmer Fred Pittillo did his homework and continues to stay on top of the latest industry trends to keep Turf Mountain Sod growing. When Pittillo shifted out of the dairy business in 1987 and started sod production on five acres, the business had just three employees, including him. Now he's got 35 full-time employees, 10 sod harvesting machines and more than 1,200 acres in cultivated grass. His company serves a 150-mile-radius territory, with much of his sod going to subdivisions from Charlotte to Grandfather Mountain. One recent project was sodding the Jack Nicklaus-designed golf course at the Cliffs at Walnut Cove. Pittillo knows growth is a double-edged sword for the farmer. Without it, he couldn't thrive. "But to me, unplanned growth is not good," said Pittillo, 64, who has served on the Henderson County Planning Board. "I'll say it this way: If we don't have the roads and infrastructure to go along with the growth, even getting from field to field is going to be tough." Allison, of Hillside Nursery, agrees. His family's business is big enough now to have 62 sales representatives working the East Coast, but they have more trouble cobbling together land to grow their trees. "We appreciate the growth and what it means financially to the business," Allison said. "But with that, it also makes it harder t