Briefing Memo

TO: Commissioner Steve Troxler

FR: Lisa Morgan

RE: Bullet points for the N.C. Green Industry meeting, 8 a.m., Saturday, Jan. 19, Greensboro Coliseum, Raleigh

Purpose:

You have been asked to make about 8-10 minutes of comments to the group.  Organizers expect 50 at the meeting.

Remarks

The North Carolina Green Industry represents the nursery, greenhouse, Christmas tree, and turf grass/sod industries in our state. We are one of the leading states in the country in production of these crops which represent over $1.2 billion in farm income.

North Carolina’s green industry contributes $8.6 billion to the state’s economy.  The green industry is comprised of growers of greenhouse/nursery stock, Christmas trees and flowers, sod producers and related businesses, such as landscape and irrigation contractors, lawn care professionals, arborists and retail lawn and garden centers.

Christmas Trees

North Carolina produces 60,657 acres of Christmas trees, part of the state’s booming green industry.

N.C. Christmas trees generated $134 million in cash receipts in 2006, tops in the United States.  North Carolina has close to 50 million Christmas trees growing on over 30,000 acres.  The N.C. Christmas tree industry ranks second in the nation in number of trees harvested.

North Carolina produces over 19 percent of the real Christmas trees in the United States.  There are more than 1,500 Christmas tree growers in North Carolina. Despite the drought, we might have one of our best crops of Christmas trees this year. But seedlings did suffer, which will affect the supply in seven years.

This year marks the 10th time that a North Carolina Christmas tree was selected as the official White House Christmas tree.  It was a Frasier fir from Mistletoe Meadows Christmas Tree Farm in Laurel Springs, N.C.

Green Industry Study

We always knew the green industry was big business in North Carolina, but we didn’t know how big.  A comprehensive study was conducted and the results show that the green industry is a diversified and significant economic factor in our state.

Staff of the Agricultural Statistics Division at the N.C. Department of Agriculture and Consumer Services collected data for the study. Economists Dr. Charles Safley and Dr. Michael Walden of N.C. State University’s College of Agriculture and Life Sciences analyzed the data. The study was funded by an appropriation from the General Assembly in 2005.

This shows the significant contributions the green industry provides our state. The green industry offers opportunities for additional jobs, additional revenue and continued environmental benefits.

The study found the following information: The green industry employs nearly 152,000 people across the state.

N.C. homeowners spent an average of $838 on lawn and landscape services during the year.  Arborists, landscapers and lawn care professionals had total gross sales of $1.2 billion.  Landscape architects and designers had total gross sales of $574 million.  N.C. florists had total gross sales that exceeded $256 million.

North Carolina had 120,741 acres in production of green-industry commodities, including 60,657 acres of Christmas trees, 27,150 acres of field-grown nursery stock and 20,838 acres of sod.

Types of jobs in this industry:  According to a study, landscapers, greenhouses, sod producers and other “green industries” in North Carolina have an eight billion dollar impact on the state.

Today the green industry in North Carolina is comprised of nursery stock growers, golf courses, sod producers, commercial flower growers, Christmas tree growers, landscape architects, landscape designers, landscape contractors, landscape and grounds management contractors, lawn care contractors, tree care contractors, irrigation contractors, independent retail garden centers, big box garden centers and allied suppliers.

This study was the first time anyone has put a dollar figure on the impact those types of businesses have on the state.  The review by the Agriculture Department and economists at North Carolina State University was funded by the legislature.  Lawmakers wanted some idea of the economic impact of businesses that create and maintain different types of green spaces as well as the companies that supply them.

The study also found that North Carolina has almost 121-thousand acres producing Christmas trees, nursery stock, sod and other commodities.

The dynamic nature of the North Carolina green industry is reflected in the $8.6 billion dollars spent in 2005 on the purchase of green industry products and services as well as the 151,982 people employed by the industry statewide.

The conclusions of this study clearly illustrate the economic value of this diverse and vibrant industry in North Carolina, the green industry.

Total gross sales by North Carolina florists exceeded $256.6 million in 2005.  Average homeowner expenditures for all lawn and landscape services were $838 in 2005.

Total gross sales by North Carolina arborists, landscapers, and lawn care professionals was $1.2 billion in 2005

Gross sales by North Carolina landscape architects and designers totaled $574.2 million in 2005.

Over 2.9 million North Carolina homeowners spent an average of $718 for green goods, equipment, and supplies in 2005.

Over 2,936 owners of commercial multi-family residences or apartment complexes spent an average of $10,321 for green goods, equipment, and supplies in 2005.

Plant sales at North Carolina garden centers, both independent and mass merchants exceeded $322.4 million in 2005.

Total value added of production in North Carolina was more than $4.1 billion.

North Carolina’s Green Industry 2005 total economic impact on the states economy was more than $8.6 billion.
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Total employment impact for North Carolina’s green industry in producing sectors: 151,982 employees.

Total acreage:  North Carolina Production Acreage in 2005: 120,741 acres

Over 17.2 million rounds of golf were played on North Carolina’s 605 golf courses in 2005.

Drought

This year’s drought scorched the land and crops throughout much of the Southeast.  Farmers in N.C. alone suffered nearly a 47 percent loss on corn with other crops such as cotton, soybeans, tobacco, peanuts and hay faring badly as well.

According to the November U.S. Department of Agriculture crop production report, soybean yields are projected at 21 bushels per acre, a drop of 11 bushels from 2006.

Production is down 31 percent.  We’re looking at the lowest yield on soybeans since 1983.

And this pattern is widespread—affecting other crops such as Irish potatoes, peanuts, tobacco, corn and hay just to name a few.

We’re looking at a farm income loss of $382 million which results in a loss of economic activity for North Carolina businesses of $573 million.

While some drought impacts are immediate most drought effects will be realized in future crop years as future yield and quality could be impacted more dramatically than 2007.

Hay shortage

I’m sure everyone is aware of the dire need for hay in North Carolina.  The Easter Weekend freeze last April and the lack of rain drastically cut the expected hay crop, leaving livestock producers and horse owners scrambling to find hay and alternative forages for their animals.

The hay shortage is predicted to exceed 250,000 tons this year.

The lack of rain has cut hay production in the state by nearly 50 percent.  That’s a drastic toll on many sectors of the agricultural industry.  A square bale of hay used to run for about $5, and now it’s around $15 a bale.  Round bales could go for $75 to $80, plus per-mile shipping costs to bring in hay from out-of-state could raise costs even more.

Green Industry and the Drought:

Like other agricultural sectors, the green industry is also suffering from the drought.

I commend the NC Green Industry Council for taking action by meeting with the Governor’s Office about drought conditions.

The Green Industry has also taken a hit from the drought.  Outdoor watering limits have caused 30 percent of the industry’s 151,000 workers to be laid off.

Earlier this year, Governor Easley contacted the U.S. Secretary of Agriculture Michael Johanns, requesting that 85 of the state’s 100 counties be declared drought disaster areas.  That designation allows farmers in those counties to be eligible for low-interest emergency loans from the USDA Farm Service Agencies.

Farm Bill

I’m glad to report that drought-stricken farmers will receive financial help soon, from the federal drought relief bill signed by President Bush in late December.  The bill will provide farmers with an estimated $600 million in direct aid.

This is good news because the new bill provides direct, mandatory federal aid to eligible farmers.  That means it provides farmers with direct aid from the federal government and the funds are mandatory, meaning that there will be as much money available as is needed for all eligible farmers to receive assistance.

This financial aid will assist farmers in making planting decisions for 2008, offering more certainty and hope.

Biotechnology and Research

Another source of hope comes in the form of agricultural research being done at our land-grant universities and private companies.  Groundbreaking research into drought resistant grasses is underway at N.C. State University.  New types of grasses are being tested, and researchers are hoping to have new grasses available this fall.—Go into how important biotechnology is to agriculture.

Dr. Grady Miller and his team of turf specialists of N.C. State University’s Crop Science Department are also working on developing technology that only triggers sprinklers when grass needs the water.  These sensors are already coming out on the market, but they’re expensive and in need of refinement.  But I’m hopeful that we are getting closer to making these readily and economically available to everyone.

That’s why Miller hopes the work in the fields at N.C. State will create more drought resistant grasses. The updated research was unveiled at a statewide turfgrass conference in Raleigh on Monday, Jan. 14.

Many people in the non-agricultural population are under the misconception that biotechnology somehow poses a threat because chemicals or genetics are used.  But this is a misconception and counterproductive to improving the agricultural industry and the environment.

Science and technology better equip farmers to feed the world’s growing population.  The more yield we get per acre of land the less nature has to be destroyed to accomplish that.  The more people who move to North Carolina, the more forest need to be cleared to feed them and the only way to offset that is to have more yield per acre.

Agricultural research helps us ensure high-quality, safe food, sustain a competitive agricultural economy, enhance the environment and provide economic opportunities for rural communities.  These objectives are achieved through research coming out of programs at our land-grant universities like N.C. State University and N.C. A&T as well as NCDA&CS’s in-house research and extension programs.

There’s much talk in the industry about drought-tolerant hybrids being developed.  That’s why I’m excited about the new technology and research the biotech industry brings to agriculture.

Biotechnology may be the answer to some of agriculture’s direst of problems like the drought.  Biotechnology is certainly an interesting thing to consider.

I’m excited about the agricultural research being conducted at our land-grant universities like N.C. State University and N.C. A&T.  Agricultural biotechnology holds a lot of promise for farmers and the community as a whole.  North Carolina has become a forerunner in the research world when it comes to putting biotech tools to good use for improving our crops.

Biotechnology can be used to create new crops, improve crops and find new uses for old crops.  The potential is there to produce more food at a lower cost and with less environmental impact.