Last Wednesday, on April 1, PMA organized "Virtual Town Hall Floral" in which the latest COVID-19 disruptions on the global cut floral and potted plant market was discussed in a virtual roundtable. Below a summary of what was discussed at the roundtable last April 1.
In the near term, PMA will offer weekly virtual events to provide up-to-date information and opportunities to connect during COVID-19 response and recovery. The next virtual roundtable focused on the floral sector is scheduled Wednesday, April 8.
Top issues raised for floral include:
- transportation challenges across all areas of supply, including air freight;
- a need for the U.S. retail sector to project demand for Mother’s Day;
- labor layoffs for many growers; some lingering staffing challenges for U.S. retailers;
- and supply challenges for growers accessing packaging like sleeves and corrugated boxes.
- Retail: Participating U.S. retailers say conditions at stores and distribution centers continue to stabilize, enabling them to begin growing floral presence. Participating supermarket chains were optimistic to begin planning for Mother’s Day.
Legislative: Joe Bishoff from Cornerstone Government Affairs gave an overview of the U.S. Paycheck Protection Program. Applications through 7A lenders open April 3* for companies with under 500 employees. In many cases approval will be granted same day; money expected to be available shortly thereafter. Eligibility for this disaster-relief program is based on the number of employees (<500), not the typical $750K limit for growers or a cap of 100 employees for wholesale and trade. If you applied for an EIDL loan, you can still apply for PPP loan. Companies with greater than 500 employees will be handled through U.S. Treasury Department’s Exchange Stabilization Fund.
*At the roundtable, it was shared that in the United States the application for small-business financial relief as a result of COVID-19 will open April 3. Some news media, including Politico and the Wall Street Journal (WSJ), have reported that some banks have questions and may not yet be prepared to administer loans. The WSJ reported April 2 that banks say they are struggling to understand how to make these loans eligible for a government guarantee. The WSJ further reports “Business owners can begin applying on Friday for the loans, which are forgivable if they keep their workforce largely intact and use the loans for eligible expenses such as rent and utilities. Many details of the program remain unclear, which is complicating efforts by lenders to gear up for what is expected to be an onslaught of prospective borrowers at the end of this week.” PMA will provide updates to members as we have them.
Global Grower Update
Colombia: Production is available for Mother’s Day; transportation is key to bring to market. Current distribution is mostly to U.S. with some to Japan, Canada, Korea and Europe. Working three Sundays and May 1, which is a holiday, to prep for Mother’s Day. Asocolflores is working closely with authorities to help mitigate challenges to bringing floral products to market. Quarantine restrictions could cause some labor challenges.
Ecuador: Difficult working conditions. Layoffs happening due to government quarantine restrictions. To meet the Mother’s Day demand, they will adjust logistics and labor as needed. Stressed need for retailers to try to project demand so airfreight can be secured.
Europe: Is slightly ahead of U.S. regarding impact of COVID-19. Early in crisis, on March 13, about 20 percent of Royal Auction supply had to be thrown away, which has never happened, and this historically high percentage increased to almost 50 percent for flowers and more than 30 percent for plants in the auction day that followed. Regulations have been put in place to limit supply - for cut flowers, for example, only 30% of the supply was allowed. (Click her for more information on Royal FloraHolland and their updates) Dutch growers impacted, with tulips particularly hard hit. Export at standstill as European borders are closed for nonessential items. U.K., Spain, Italy, France, Poland, and The Netherlands suffered huge floral losses, with some businesses filing for bankruptcy. Using social media to keep flowers top of mind. There is a shortage of floral workers in Europe.
Canada: Many floriculture and greenhouse workers have been laid off. Limited exports to U.S. Supplying to Canadian retailers only. Tried ad-hock DSD program, proved laborious and costly. Hearing cancellations of Easter and Mother’s Day orders. Pinching Mother’s Day crops. So far have reduced SKUs to best sellers and less risky items. Pharmacy and home building and supply stores are showing spikes in floral sales. Seeing increased demand for locally grown flowers.
CA Cut Flower Commission: They are in frequent communication with growers and their website is updated with list of open growers. Loss of cross-country transportation to Midwest and East Coast was a big hit. Expect a cross-country route to be available soon. Retail still supporting, which is positive and they appreciate all they are doing.
The above is a summary from our April 1 floral roundtable. PMA will offer weekly virtual events in the near term to provide up-to-date information and opportunities to connect during COVID-19 response and recovery. The next virtual roundtable focused on the floral sector is scheduled Wednesday, April 8. Please continue checking pma.com for the most current industry resources and information.