AN ECONOMIC ASSESSMENT OF FIELD-GROWN NURSERY CROPS Executive Summary This report concentrates on insurance for field-grown (or in- ground) nursery crops. The Census, which is the main source of data for this industry, defines nursery crops as including woody ornamental trees and shrubs, fruit and nut trees, vines (including ground covers), and herbaceous (non-woody) plants. Using this definition, the Census reported nearly 20,000 producers of nursery crops in the United States in 1992, with $2.6 billion in wholesale nursery product sales. Information on unfinished plants (including propagative materials) are also included in the report. According to the Census, nursery growers reported producing nursery crops on 128 million square feet of land under protective cover and 332,000 acres of open-field area. These nursery farms contained an estimated 1.9 million acres of total land area and had total gross cash farm income from nursery and other crops of $3.2 billion. The Census data, which are virtually the only source of information on nursery crops, cannot be separated into "in- ground" and "containerized" categories. However, an estimated 45-55 percent of all nursery crop sales in the U.S. are "non- containerized" plants, all of which are field-grown. U.S. purchases of nursery plants averaged about $93 per person at the retail level in 1993, up from about $63 in 1986. The principal purchasers of nursery plants are homeowners, builders, landscape contractors, grounds maintenance contractors, commercial businesses, retail nurseries, and garden centers. Smaller markets include highway departments, parks, and golf courses. An estimated 50-60 percent of the volume is sold during late winter through early summer, and 25-30 percent is sold in the fall. Every state produces nursery crops. Nineteen percent of the U.S. acreage is located in the Northeast; 25 percent is in the North Central states; 38 percent is in the South, and 18 percent is in the West. The Census reported 377 U.S. counties with $500,000 or more in sales of nursery crops in 1992. The location of in-field nursery production is largely determined by climate, distance to markets, and, sometimes, tradition. Each plant species has a hardiness zone which sets the northern limit for growing that type of plant. In addition to hardiness zone, other climatic conditions are important, such as rainfall, humidity, and heat. Most growers plant either purchased or self-propagated "liners" (young trees or plants) to be set or "lined-out" in rows in the field. Frequently, liners are planted in the field in the fall, giving the root time for establishment before the plant breaks dormancy in the spring. Planting in the spring or early summer is also practiced. Liners are small, bare-root trees and plants, or container-grown liners in pots or trays. Broadleaf shrubs and trees (holly, live oak, and magnolia) are often purchased as small container-grown liners. Although container-grown liners are more expensive than bare-rooted plants, there are fewer losses due to desiccation when transplanting. Broadleaf evergreen liners are particularly susceptible to loss if they are not container-grown. Liner production usually requires 6 to 12 months for the roots to develop adequately and the plant to reach the needed size for planting in the field. Soil should be tested before planting for nutrient requirements (phosphorus, potassium, calcium, magnesium, manganese, zinc) and nematodes. Fertilization needs vary depending on soil type and type and age of the plants. Generally, broadleaf evergreens (such as hollies) require the lowest fertilizer levels, narrowleaf evergreens require somewhat more, and deciduous trees the highest levels. Clay soils require lower application rates because of their ability to hold nutrients. Sandy soils require the most frequent applications since fertilizer leaches from these soils more readily. The best time for harvesting (digging) to assure survival of the plant is from late fall to early spring. Plants can be dug at other times, but they must be given special post-digging care. Growers normally avoid harvesting during active shoot elongation because root regeneration is at its lowest point at this time. Field-grown trees and broadleaf evergreens are usually dug when they are dormant since there is less stress due to moisture transpiration. In recent years, however, summer and fall digging has become more commonplace, as anti-transpirants have become available that reduce water loss. Major production perils include excessive rains, excessive heat, excessive wind, drought, freezing temperatures, and ice damage. Insects and diseases can generally be controlled through management practices. For plants that remain in the nursery field for an extended period (such as ornamental trees), damage may be out-grown and salability may be unaffected. The damage caused by production perils varies with the type of plant, its age, and the time of year. For example, trees are most susceptible to damage from flooding early in the spring, when their respiration rate is highest. They can withstand a longer period of inundation during winter dormancy, when they are not actively growing. Ad hoc disaster data can be used to indicate which states with large nursery crop industries received large payments relative to the state's sales. For example, Florida accounted for a large share of U.S. ad hoc disaster payments relative to its sales and acreage, in part due to the effects of Hurricane Andrew in 1992. In contrast, California, New Jersey, and various north central states (such as Michigan and Illinois) collected a smaller share of ad hoc payments relative to their sales and acreage. Our assessment is that, with a few exceptions, participation in crop insurance for in-ground nursery plants would be concentrated at the minimum catastrophic coverage level. For a very small cost, producers are able to receive coverage from the most serious, catastrophic events. Generally, growers report that they are able to deal with the production perils encountered in nursery crop production. Insects and diseases can be kept in check with proper management, including the use of pesticides. Interest in "buy-up" coverage appears to vary widely from state to state, with the greatest participation likely to occur in southeast Florida, and the Gulf Coast areas of Florida, Alabama, Mississippi, Louisiana, and Texas.