Economist Charlie Hall, Ph.D., urged green industry businesses to make their best possible strategic decisions with the information they have, rather than be paralyzed with the what-ifs. Photo by Max Stein
It’s an uncertain world out there, economically speaking — even with the growth the nursery industry has seen in the post-pandemic years.
But noted economist Charlie Hall, Ph.D., urged green industry businesses to make their best possible strategic decisions with the information they have, rather than be paralyzed with the what-ifs. And that goes for production levels, pricing, capital investments, or anything else.
“In the midst of uncertainty, we tend to wait on some strategic decisions,” Hall said in his Farwest Show keynote speech, which took place in August. “One of my stances here today is that there are enough opportunities in the marketplace right now that you don’t want to wait in capturing some of those strategic opportunities.”
The keys are managing working capital well, operating efficiently, operating with strong pricing discipline, and maintaining focus on the value proposition one’s company offers, Hall said.
Hall, the Ellison Chair of International Floriculture at Texas A&M University and chief economist for AmericanHort, drew a key contrast between assessing risks and uncertainties. Risks are known, but uncertainties can’t be predicted.
“We tend to use those interchangeably, but risk is basically those things that you can pretty well gauge the odds of happening,” Hall said. “[With] uncertainty, you don’t have a clue.”
Recent uncertainties, according to Hall, have included tariffs imposed by the Trump Administration, as well as the Iran war and resulting Strait of Hormuz closure, which have driven fuel prices skyward.
Leaders who postpone decisions due to risk can forget that indecision also has its cost. Those who study, set a personal deadline, and then act are most likely to be rewarded, he said.
It’s important to keep awareness of which decisions can be adjusted most easily. For example, pricing that proves to be too aggressive based on customer response can be pulled back.
But Hall said that based on the past several years, growers who increased prices saw greater income, while those who held back just ended up sharing their margins with their customers. “If you’re not seeing an increase in net profit from where we were in 2019, there’s some things going on,” he said with a characteristic bit of understatement.
A sustained strong market for plants
Overall, the post-COVID market for plant products from 2020–2026 has remained strong, Hall said. He displayed a chart showing the trend line over time. Plant sales grew slowly from 2016–2019, then shot up from 2020–2022 with people spending more of their time, and their discretionary income, at home. Since then, there have been periods of growth and decline, and some plateaus. Overall, sales growth has continued, but at a more modest pace.
“You can see that in 2023, 38% [of growers] said that they were growing more than 10%, and only 12% [said this] in 2026,” Hall noted.
Still, 97% of growers reported in 2026 that their sales were higher than in 2019, and 59% of them reported they were up more than 25%.
Hall pointed out that growth in sales does not necessarily mean growth in units shipped. The number of growers shipping more units has consistently trailed the number of growers with greater income. This is because sales growth has been led by price increases.
“The higher plateau looks like the new normal,” Hall noted on a slide. “The question is no longer ‘Are we going back?” — it’s ‘What do we do from here?’”
The growers with greatest success have raised prices enough to cover the increased cost of their inputs.
“Since 2019, if you’ve not raised your price by as much as 23%, you have not kept up with the inflationary pressure on inputs, and you’ve been sharing your margin with your customers,” Hall said.
He added that the need to increase prices to keep up with inflation, cover costs and protect margins has only continued in 2026.
“There’s another 3.6% of inflationary pressure on inputs because of tariffs, because of Iran, and so forth, that you’re gonna have to cover this year,” Hall said. “And some are telling me, ‘I don’t think I’ve got the runway to raise price another 3.6%.’ Well, I just told you if that’s the case, you’re gonna be sharing margin with your customer. You may have to eat some of it. But my contention is when you’re trying to weigh whether or not you have that runway to raise price, and you’re thinking, ‘I can’t raise price anymore, my customers will go somewhere else,’ my only response is, ‘How do you know?’”
A future housing boom
Hall expects demand for plants to spike up again once more people start purchasing homes, which the numbers say will happen at some point.
“We have a latent demand for 1.7 million housing units between now and 2030,” he said. “When mortgage rates get below 5.5%, that’s a tipping point. Everybody that’s been waiting in the wings to buy and sell a house, they’re gonna pull the trigger, and when they pull the trigger, they’re gonna need some flowers, shrubs and trees and landscaping services.”
Green products, he said, continue to be strong performers for big box stores like Lowe’s, Home Depot and Walmart.
“Particularly for Lowe’s and Home Depot, there are no other departments in the entire store that even come close to what indoor and outdoor garden generate,” he said. “We are driving people to their stores. We are driving most of their increases in revenue.”
However, he did caution that strong spending has persisted in spite of the lowest consumer mood in seven decades. “We don’t spend based on how we feel,” he said. “There’s a correlation, but it’s not a strong correlation. That’s the irony, is that sometimes we spend to make ourselves feel mo’ better. And we see it in the numbers.”
Factors unique to the Northwest
Hall noted that based on sales figures from retailers, the Pacific Northwest is underperforming compared to other regions of the country. Sales figures are lower and the average ticket is lower.
At the same time, shipping costs are high with the Strait of Hormuz remaining closed due to the war between the United States and Iran. The federal government forecasted that diesel would sell for $3.50 per gallon in 2026. Instead, the U.S. national average was $5.26 per gallon as of August 10, the West Coast average excluding California was $5.53, and the California average was $6.62.
“Diesel prices are only a portion of freight, but you can see the freight rates, diesel prices going up,” Hall said. “And here in Oregon, right, you’re in a situation where you’re paying a premium above most other regions of the country. And, the only state that’s paying more is California.”
Closing points
Hall’s major takeaways were as follows:
The new baseline. The sales levels post 2020 formed a higher plateau that serves as the new baseline. “You’re not in a downturn, you’re on a plateau,” he stated on a slide.
Pricing vs. volume. For growers, growth has been price-led, but there’s a limit to how this can boost returns. Growers should focus on building back volume.
Margins matter most. Growers that focus on margin do best. Hall noted that 61% of growers increased their profits and 41% decreased theirs, in identical conditions. Those who did well looked at price structure, SKU discipline and pricing courage.
Tariffs are here to stay, for now. The most recent tariffs under Section 301 don’t have a sunset, so growers should price them in as a budget assumption. If they go away, that’s a bonus.
Plan for sideways. Hall expects growth of 1.5–2% and continued uncertainty. “The fog is the weather now, not a passing front,” he stated on a slide.
From the November 2026 issue of Digger magazine | Download PDF of article
