Dr. Charles R. Hall Professor University of Tennessee crh@utk.edu www.uxtension.utk.edu/hbin Economic Worth of the Green Industry in the U.S. Today s s Topics Structural changes in the green industry. Economic impacts of the green industry in the U.S. Why are economic impact data so important? Basics of grassroots lobbying efforts. MINING FERTILIZER PLANTS CHEMICAL PLANTS OIL WELLS PETROLEUM PRODUCTS FISHERIES FORESTRY Output of selected U.S. green industry sectors, 1987-2003. T R A D E A S S O C I A T I O N S FERTILIZER; METAL WORKING PESTICIDES TOOLS & MACHINERY Production DIRECT MARKETING Marketing TRADE PRESS & PUBLICATIONS Consumption AG COLLEGES; RESEARCH FARMS Nursery & Greenhouse Firms DISTRIBUTION & LANDSCAPE FIRMS FUNCTIONS Installation Maintenance Storage Transportation Financing Information PAPER MILLS PLASTICS MANUFACTURING Extractive & Manufacturing Wrappings, Containers Packaging materials Labels Irrigation materials PRINTED MATERIALS: (Catalogs; signs; packaging) INDIRECT MARKETING FIRMS Brokers Landscape contractors Lawn maintenance firms Re-Wholesalers Terminal market firms Cooperatives Auctions RETAILING Garden centers Retail nurseries Retail greenhouses Florist shops INSTITUTIONAL Plant stores Schools Supermarkets Hotels; Resorts Discount mass merchants Hospitals Home improvement centers Restaurants Farm markets Interior landscapes Flea markets Malls Mail order Corporate landscapes Electronic marketing Public buildings Community parks Churches EXPORTS: Market Area to Market Area Other states Canada Europe IMPORTS: Columbia, The Netherlands, Ecuador, Mexico, Canada, Guatemala, Australia, Israel, England, Costa Rica, Hawaii, Philippines, Japan, China, Africa Regulatory Trade Agreements Trade Barriers & Import Restrictions APHIS/PPQ Patents, Royalties & Copyrights Environmental Protection Pesticide and other chemical regulations Billion Dollars (deflated 2004) 40 35 30 25 20 15 10 5 0 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 Landscape & Horticultural Services Nursery & Greenhouse Lawn & Garden Equipment Manufacturing Retail Nurseries & Garden Stores U.S. nursery and greenhouse grower cash receipts, 1994-present (1,000 dollars). Nursery and greenhouse grower cash receipts by type, 2005 (1,000 dollars). $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 Nursery $10,710,979 $8,000,000 $6,000,000 $4,000,000 $2,000,000 Industry shows recession resistance and strong correlation to housing starts. Greenhouse $5,300,140 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 $0 2004p 2005f 1
Top 10 Nursery and greenhouse states in terms of grower cash receipts, 2004p. Floriculture grower cash receipts, by crop group, 2004-05 forecast (1,000 dollars). 1. California 2. Florida 3. Texas 4. Oregon 5. North Carolina 6. Michigan 7. Ohio 8. Pennsylvania 9. Washington 10. New Jersey $3,328,147 $1,628,672 $1,388,443 $951,452 $932,871 $609,209 $589,124 $425,464 $388,931 $372,646 $2,000,000 $1,600,000 $1,200,000 $800,000 $400,000 $0 Cut flowers Potted flowering Foliage Annuals Perennials Production of herbaceous perennials, except potted hardy garden mums, is shifting heavily to the South, specifically South Carolina. Cut greens Propagative Value of nursery and greenhouse imports and exports, 1994-date (1,000 dollars). Nursery and greenhouse crops consumption by household, 1994-2006. $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 $160 $150 $140 $130 $120 $110 $100 $90 $112 $117$122 $131 $132$135 $139 $143 $149$152 $152 $146 $147 Exports Imports 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Total U.S. household lawn and garden participation, 1999-2005. Total U.S. household lawn and garden retail sales, 1999-2005. Millions ($) 90 80 70 60 50 40 30 20 10 0 85 85 84 82 83 76 67 1999 2000 2001 2002 2003 2004 2005 Millions ($) 40,000 39,000 38,000 37,000 36,000 35,000 34,000 33,000 32,000 31,000 30,000 $33,519 $33,404 $37,734 $39,635 $38,371 $36,778 $35,208 1999 2000 2001 2002 2003 2004 2005 Source: National Gardening Surveys, NGA. Source: National Gardening Surveys, NGA. 2
Average spending on lawn and garden activities, 1999-2005. Ornamental Gardening Millions ($) 600 500 400 300 200 100 0 532 435 444 466 457 449 387 1999 2000 2001 2002 2003 2004 2005 9% of all U.S. households or 10 million households participated in ornamental gardening in 2004. That was one million households more than the 5-year average of nine million households. Retail sales for ornamental gardening decreased from $831 million in 2003 to $769 million in 2004 or about 7%. Average household spending for ornamental gardening in 2004 was less ($83) compared with $94 in 2003. Source: National Gardening Surveys, NGA. Source: 2004 National Gardening Survey, NGA. Flower Gardening 36% of all U.S. households or 39 million households participated in flower gardening in 2004. That was 5 million households less than the five-year average for flower gardening of 44 million households. Flower gardening retail sales decreased from $3.025 billion in 2003 to $2.735 billion in 2004 or about 9%. Average household spending on flower gardening in 2004 was $72 compared to $76 in 2003, a decrease of 5%. Source: 2004 National Gardening Survey, NGA. Year 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 1.9% 2.0% 2.4% 2.2% 3.7% 3.2% 4.1% 3.9% 4.3% 4.6% 4.9% 4.6% 4.4% 4.8% 4.6% 5.8% 5.6% 5.6% 5.4% 7.0% 7.2% 8.4% 9.8% 9.5% 9.3% 10.4% Average annual growth rate, 1967-2004. 10.5% 10.9% 12.6% 11.9% 13.1% 12.8% 14.6% 14.3% 15.2% 17.1% 18.0% 20.7% In the 1970 s: 13.64% In the 1980 s: 9.91% In the 1990 s: 4.64% In the 2000 s: 3.07% Source: USDA Situation & Outlook, 1967-2004. The green industry is still a growing (yet maturing) industry. But what is it s economic worth to our U.S. economy? USDA-Forest Service, National Urban and Community Forestry Advisory Council (NUCFAC) Project Sponsors Green Industry Research Consortium USDA-CSREES Multi state research project S-290, Technical and Economic Efficiencies of Producing, Marketing and Managing Environmental Plants 3
Data Sources National Nursery Survey (S290 Research Project). 2002 Census of Agriculture 2002 Economic Census Industry Report Series 2002 County Business Patterns (Census Bureau) Benchmark Reports on Wholesale and Retail Trade (Census Bureau, 2004) 2002 IMPLAN state data (MIG, Inc.) U.S. GDP Implicit Price Deflator (Commerce Dept.) Florists Green Industry Sectors Included Nursery & Greenhouse Growers Lawn & Garden Equipment Mfg Greenhouse Manufacturing (Prefab. Metal Buildings)* Landscaping Services Landscape Architectural Services Flower, Nursery Stock And Florist Supplies Wholesalers Lawn & Garden Equipment & Supplies Stores Building Material & Supplies Dealers* Food & Beverage Stores* General Merchandise Stores* Industry Sector Farm & Garden Machinery & Equipment Wholesalers* * Merchandise or product line sales of horticultural goods represents a portion of overall business. NAICS Code 1114 333112 332311 56173 54132 42493 4442 4531 4441 445 452 421820 Economic Influence of the Green Industry Nursery & Greenhouse Production Lawn & Garden Equipment Manufacturers Jobs: Labor/ Wages Resident Population Employee Households Plant Products Personal & Business Taxes Consumer Household Spending (Induced Effects) Wholesale & Retail Trade Local & State Government Landscaping Services Sector Green Industry Purchased Inputs (Indirect Effects) Input & Service Suppliers Wholesale & Retail Distribution Rest of Local Economy Commodity and Service Exports/Imports Local Consumption & Intermediate Demand Imports (Leakages) Rest of United States and World Economy Goods & Services (Money Flows) Total Economic Impacts of the U.S. Green Industry, 2004* Output ($Bn) Impact Measure Employment (jobs) Value Added ($Bn) Labor Income ($Bn) Indirect Business Taxes ($Bn) Green Industry Total 147.8 1,964,339 95.1 64.3 6.9 * 2002 values expressed in 2004 dollars (GDP Implicit Price Deflator, U.S. Department of Commerce) Output, value added, and employment of the U.S. green industry by sector, 2004* Employment impacts of the green industry by region, 2004* Nursery & Greenhouse Lawn & Garden Equip. & Grnhs. Mfg. Landscaping Services Landscape Architecture Horticultural Wholesalers Garden Equipment Wholesalers Lawn & Garden Stores Building Material Supply Stores Florists Food & beverage stores General merchandise stores Billion Dollars (2004) 0 10 20 30 40 50 60 Output Value Added Employment 0 100 200 300 400 500 600 700 800 Jobs (Thousands) * 2002 values expressed in 2004 dollars (GDP Implicit Price Deflator, U.S. Department of Commerce) West South Central East 187 216 257 250 220 188 137 208 0 100 200 300 400 500 600 Thousand Jobs 46 79 94 82 Wholesale & Retail Trade Horticultural Services Production & Manufacturing * 2002 values expressed in 2004 dollars (GDP Implicit Price Deflator, U.S. Department of Commerce) 4
Employment impacts of the green industry in leading states, 2004*. Value added impacts of the green industry in leading states, 2004*. Thousand Jobs 0 50 100 150 200 250 300 Billion Dollars (2004) 0 2 4 6 8 10 12 14 California Florida Texas Illinois Ohio Pennsylvania New York North Carolina Michigan Georgia Wholesale & Retail Trade Horticultural Services Production & Manufacturing California Florida Texas Illinois Ohio Pennsylvania New York North Carolina Michigan Georgia Wholesale & Retail Trade Horticultural Services Production & Manufacturing * 2002 values expressed in 2004 dollars (GDP Implicit Price Deflator, U.S. Department of Commerce) Arkansas North Dakota Nebraska Georgia California Vermont Connecticut New Hampshire Nevada Tennessee Colorado North Carolina Hawaii Maryland Arizona Wisconsin Florida South Carolina Idaho Oregon Green industry share of gross state product, 2004*. 0.90% 0.92% 0.94% 0.95% 0.96% 0.96% 0.96% 0.96% 1.00% 1.04% 1.08% 1.15% 1.16% 1.16% 1.16% 1.17% 1.31% 1.37% 1.43% 0.0% 0.5% 1.0% 1.5% Percent 1.68% 2005 Ohio Study Sales for 2005 were approximately $4.13 billion. Between 2001 and 2005, the industry grew 48%. Landscape Services is the largest segment of Ohio's green industry at $1.9 billion in 2005. Retail Garden Center Sales reached $677 million. Wholesale Nursery Sales topped $701 million. 241,000 individuals are employed in green industry. Statewide, $491 million is paid in property, sales, employee, and income taxes by the green industry. http://www.onla.org/05greensurveyreport.pdf Why are economic impact data so important? Greater appreciation for the range of goods and services from green industry sectors. Greater political support for green industry. Increased awareness of economic and environmental impacts. Why are economic impact data so important? Increased consumer confidence in green industry products. Increased public awareness of the impacts of environmental stewardship practices by green industry firms. 5
Why are economic impact data so important? Why are economic impact data so important? Examine the effects of a company moving into your area or the contributions of an existing company. Estimate industrial targeting and commercial development opportunities. Examine resources regulated by the government Examine a region s strength and marketing opportunities. It can be used internally to plan strategy and to take corrective action when needed. It provides information that helps stakeholders analyze impact of policy decisions. Key industry issues Immigration reform Health care & insurance Estate tax repeal Water legislation AgJOBS Basics of grassroots lobbying Outreach efforts Writing/emailing legislators Making effective lobbying visits Calling senators/representatives Hosting a tour or event Working with the media www.anla.org/legislative/grassresources.htm Outreach efforts Outreach efforts (cont.) www.utextension.utk.edu/hbin/greenimpact.html 6
Outreach efforts (cont.) Outreach efforts (cont.) 2005 Legislative Conference Outreach efforts (cont.) Outreach efforts (cont.) HortTechnology, April-June 2006 Writing/emailing legislators Use your company s letterhead or personal stationery. If you are writing on behalf of the industry, use your company or association stationery. Be sure that your return address is on your letter, not just on the envelope. This will help to ensure a response most envelopes are discarded right away. Be accurate. Spell names correctly and verify information. Writing/emailing legislators Be brief. Tell why you are writing and get right to the point. If you know the name or number of the bill that is of interest to you, include it. Use ANLA sample letters as guidelines when they are available. These will give you specific information such as bill numbers and titles. Look for them on the Legislative Action Center website. 7
Writing/emailing legislators Relate your reason for writing to a personal experience this is the best supporting evidence for your opinion. Explain how the legislation would affect your business, your fellow employees, and the community in which you live. Ask for a response explaining his or her position on the issue in their reply so you can avoid receiving a typical form letter response. 1. Make an appointment Call at least a week or two in advance to set up the meeting; most offices require you to fax a letter stating the date, time, and nature of your intended visit. An appointments secretary or scheduler holds the key to a member s calendar. You will need to become friendly and familiar with this person to get an appointment. 2. Arrival Arrive on time or even a little early if possible. Fifteen minutes (possibly 20) is a realistic expectation for your meeting. Do not be surprised if your meeting starts a bit late or is cut short or you are not able to speak directly to the Representative. Often, staff members meet with constituents treat them in the same manner as you would the member. 3. Introductions If you are advocating a position supported by your association, speak on behalf of the entire industry. State number of firms or constituents you are representing. Introduce yourself and your business (including city or town where located). Be brief; don t let the member or staffer sidetrack the meeting. 4. Talking about issues State your facts. Tell what you want and why your position is the best for your business and the member s constituents. Be sure to mention other groups that you know support your position. Reference personal examples and anecdotes to explain your position wherever possible. If asked a question that you cannot answer, don t make up the answer! Jot down the question, and promise to follow up with the member or staffer. 5. Closing Leave when your time is up. Ask for a commitment from the member to support your position but do not apply pressure or be threatening. Leave behind informative issue papers and industry fact sheets for staffers and legislators. Thank the member or staffer for their time and the meeting. Request follow up as appropriate either in written form or via phone. 8
6. After the meeting Write a short thank you letter to both the member of Congress and his or her staff member(s) restating your position and following up on any questions from the meeting. Emphasize that you will be closely monitoring the issue. You may want to personally invite the member and his or her staff on an informal tour of your nursery, landscape, or garden center operation. Summary The economic impact of the green industry is significant. Economic impact data carries weight in the minds of stakeholders. These impacts MUST be used to affect change. Otherwise, what s the point? YOUR voice must be heard! "Ten people who speak make more noise than ten thousand who are silent." -- Napoleon Bonaparte "Okay, you've convinced me. Now go out there and bring pressure on me." -- President Franklin D. Roosevelt www.utextension.utk.edu/hbin 9