Giving consumers a stake in floriculture Trying to operate a successful company in this changing business world is becoming a challenge regardless of the industry. On May 6, credit rating company Standard & Poor's downgraded General Motors and Ford Motor debt ratings to junk status. A week later Moody's Investor Service lowered Ford's credit rating to its lowest investment grade. Ford sales for the first five months of the year were off 4 percent. America's second-largest automaker expects to reduce third quarter production by 2 percent, a total of 17,000 vehicles. GM's sales numbers are down even more, 5.2 percent for the year as of May 31. To help GM overcome poor sales, the world's largest automaker announced in June that it would offer the general public the same discounts it offers its employees. Looking to overcome a $1.3 billion first quarter loss at its North American operations, GM was hoping the 3- to 4-percent discounts would help to clear dealer lots of excessive inventory in time for the arrival of 2006 models. GM also plans to cut its third-quarter production by 9 percent, more than 100,000 vehicles. The Wall Street Journal reported that before the discount announcement, GM dealers were carrying large inventories with lots full of unsold SUVs. Ironically, a major focus of GM's new 2006 model campaign is scheduled to be its next generation of SUVs. Scott Sprinzen, an analyst at Standard & Poor's, told USA Today that both GM and Ford are depending too much on their new SUV models to pick up sales. He said mid- and large-sized SUVs, which have represented a substantial portion of earnings for the two companies, won't continue to provide them with the margins and cash flow they have over the last 10 years. Also, GM has not kept pace with competitors when it comes to the gas-electric hybrid vehicles. At least Ford has its Escape hybrid SUV. Community-supported agriculture Like domestic automakers, U.S. flower growers should be concerned with how our industry will keep attracting new customers as well as ensuring that current flower buyers continue to make purchases. As with the new gas-electric hybrid vehicles, consumers remain interested in the introduction of new plant varieties. Unfortunately, based on recent USDA floriculture sales figures, most crop segments are stagnant or losing sales. One unconventional approach that vegetable growers are trying is community-supported agriculture (CSA). USA Today reports that CSA, which began with a few operations in the mid-1980s, has blossomed to as many as 1,700 farms. Although most of these small farms produce vegetables, it would be interesting to see how many consumers would be willing to support an operation that produces floral crops. One of the most important aspects of CSA is that it keeps farms operating in a period of consolidation, which is also occurring in floriculture. Consumers who participate in CSA pay $13-$25 a week to receive a share of a nearby farm's yearly harvest. Participating farmers consider consumer shareholders' tastes when ordering starter materials. However, once a crop is planted, consumers have to take what is harvested. The farmers determine how many shareholders their harvests can provide for, which ranges from 25-1,000 participants. An increasing number of shareholders are parents looking to educate their children about where their food really comes from -- not the supermarket shelf. One of the best things about CSA for farmers is that shareholders pay in advance, either for the entire season or monthly. This is particularly helpful at the beginning of the growing season when farmers usually have to take out loans to obtain the supplies they need to start their crops. USA Today reports that although the CSA farms began with vegetable crops, the product mix has expanded to include flowers, herbs, dairy products and various meats. Some farmers have expanded their customer base by selling to local wholesalers, restaurants and farmers' markets. CSA certainly isn't for every grower. But in these changing business times, which are impacting companies of all sizes, it just might be an option that keeps a grower operating and making a profit. For more: Local Harvest, 220 21st Ave., Santa Cruz, CA 95062; (831) 475-8150; www.localharvest.org. Send this article to a friend Enter your e-mail address: Enter your friend's e-mail address: Click the image below to send: © 2004 Branch-Smith Publishing