| Author: |
John Hughes - Greenhouse
Crop Advisor/OMAF |
| Creation Date: |
October
1998 |
| Last Reviewed: |
28 July
2003 |
Table of Contents
- Introduction
- Identify your Market
- Location
- Capital
- Production Systems
- Vegetables
- Flowers
- Summary
- References
- Reference Books
- Related Links
Introduction
Success in the greenhouse business requires a well-defined market,
a good location, significant capital dollars, a well-planned production
system, people skills and experience in dealing with the "mechanical"
necessities of the business.
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Identify Your Market
When you first look at the Ontario greenhouse industry, you will
see that it is quite large, very diverse and extremely competitive
at all levels of production and marketing. One of the most asked questions
to the OMAF advisory staff is "What can I grow to make money
on?".
It is critical to take the time to develop your business plan. The
business plan summarises your business objectives and how you will
attain them. Information on how to prepare your business plan is available
in the OMAF fact sheet "Preparing a Business Plan", Agdex
811, order #99-011. Financial lenders will be looking for the type
of information included in the business plan.
Greenhouse vegetables are either tomatoes, cucumbers, sweet peppers
and/or lettuce. The production is geared towards the packers/wholesale
market for distribution through the chain stores and fruit/vegetable
markets. +80% of the Ontario production is in the Leamington area
of Essex County.
Greenhouse flowers include cut flowers, potted plants and bedding
plants. The production is either geared towards the wholesale market
(chains, garden centres, florists) or in the case of bedding plants
may be direct to the consumer in what is called a retail grower situation.
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Location
There are many factors to consider when selecting a site for your
greenhouse business. Just because you already have a piece of land
does not necessarily mean it will be a good location!
Natural Gas - this is the most efficient of the fuel sources for
heating your greenhouses. ie. the cost per BTU is less than oil or
propane and since heating may represent from 15-35% of your total
operating cost is significant. You will also find less equipment maintenance
problems with natural gas. Natural gas should be available at your
location and normally you would pay for the cost of making the connection
from the outside wall of the boiler room to the boilers/heaters.
Water - a good supply of high quality water is critical to the success
of the business. Have the water analyzed for a full range of criteria
from a recognized laboratory. The OMAF factsheet "Water Quality
for Greenhouse Crops" Agdex290/15 will be a good reference. Basically
the Total Salts, pH and bicarbonate levels along with some of the
specific nutrient ions will guide us. Most parts of Ontario that use
Lake Ontario water have good quality but there are some areas that
are extremely challenging and not suitable for greenhouse production.
New entrepreneurs in the greenhouse business should also be aware
of the trend towards growing plants in an "enclosed" system
where the irrigation water is captured and re-used.
Hydro - 3 phase power is much more efficient than single phase both
in the initial purchase of equipment (motors) and their operation.
An on-site generator will also be an "essential" piece
of capital equipment to handle power interruptions of your hydro supply.
Soil - the type and drainage characteristics may be particularly
important if you plan on growing the crop directly in the ground.
Cut flower crops such as chrysanthemums and snapdragons require lighter,
well-drained soils especially for winter production.
Suppliers - to your greenhouse business are important and in particular
their closeness/accessibility when equipment fails or supplies are
needed in a hurry. It is difficult to have a successful greenhouse
business in a "remote" area. As a production facility, the
need for a constant supply of "inputs" is on-going.
Customers - and the importance of being close to them whether you
are in the wholesale or retail part of the business is important.
Large wholesalers in Mississauga, Niagara or Leamington find better
communications with grower/suppliers who are close by.
For retail growers where the crop is being sold directly to the public
a major cost of doing business is actually getting the customer to
your greenhouses. The old adage, the 3 major factors to consider when
setting up a retail greenhouse are "Location, Location and Location".
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Capital
The greenhouse business is very capital intensive with the basic
structure erected ranging in price from $6-$8 per sq. ft. depending
on such major options as covering materials, ventillation systems,
etc. Next we need to provide heating (both the source and distribution),
irrigation (source and distribution),electric service (main connection
and interior work),nutrient injection system for the irrigation water
complete with pH and E.C. controllers, environmental computer to "run"
the heating/cooling requirements with the option of adding humidity,
CO2 and irrigation control. Now we need to build some type of support
buildings for storage/shipping, staff room, office, etc. Add in some
pesticide application equipment, concrete walkways, benching or a
crop support system, high pressure lighting for the starting and/or
finishing areas AND before long you have a total investment of $15-$25
per sq. ft.
One of the realities of the greenhouse business is that the initial
capital investment must make a return from operations because the
re-sale value is only a fraction of the initial investment.
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Production Systems/Economics
Vegetables
Greenhouse vegetables are usually grown in an artificial media such
as rockwool or NFT(nutrient film technique) because there is better
control of the total growing conditions compared to growing in the
soil.
A one acre size facility may be the starting point needed in order
to have any economies for the required equipment (boilers, fertilizer,
generator, service/packing building, etc).
Growing Greenhouse Vegetables (OMAF pub. 371) ($15.00 + GST)
describes the various production systems for the main vegetable crops.
There has not been accurate cost of production studies done in the
greenhouse vegetable business and we know there is a wide variation
of income based on crop yields, market prices and timing of the production.
An estimate for gross revenue is $8 per sq. ft. of greenhouse area
for a wholesale grower. Heat cost will be close to $1 per sq. ft.
for the whole year.
Tomatoes are normally planted at a population of 10,000 plants per
acre. The main variety is Trust (an excellent red tomato) and a yield
in the range of 35-45 lbs. per plant can be expected under excellent
conditions. Average price has ranged in the $.62-$.90 per pound.
Seedless Cucumbers are normally planted at a population of 5,800
plants per acre. There are a wide range of varieties, each with some
special characteristics. The expected yield is in the range of 85-110
cucs per plant with an average price of $.60-$.75 each.
Sweet Peppers are normally planted at a population of 10,000 plants
per acre. There are a wide range of varieties in the different colours
of red, green, yellow and orange. An expected yield is 18-20 lbs per
plant with an average price of $1.80-$1.90 per pound.
Note: The expected yields are from a well managed modern production
system and can be drastically lower if any factors are limiting. Contact
the OMAF greenhouse vegetable specialist or the seed suppliers for
an update on recommended varieties.
Flowers
Cut flowers-Some of the more common cut flowers such as roses and
chrysanthemums are being cautiously planted now due to the ease of
their importation from southern climates (equator countries). This
import pressure has also served to lower average prices.
More difficult to import cut flowers such as gerbera, snapdragon,
lily and lisianthus are being planted more often. The bulk of the
cut flowers are sold through the traditional retail flower shops and
as such have not enjoyed big increases in sales. The "Cash and
Carry" type of marketing by the large chain stores and independent
fruit/vegetable markets is moving an increasing volume of cut flowers.
Yields and therefore revenues will fluctuate greatly but expected
gross returns per sq. ft. will be in the $8-$12 range.
Potted flowers - can be classified as being on a weekly schedule
such as chrysanthemums, violets, begonias, etc. or holidays such as
poinsettia, Easter lily and hydrangea. For this type of crop, the
cost of production can include the pot, media, plant material(cuttings,
bulbs, etc.), growing time on the bench (usually calculated at $0.15
per sq. ft. per week) and shipping material (pot cover, box). Revenues
are in the $12 per sq. ft. area but can be significantly higher depending
on pot sizes and number of crops per year (ie. turns on the bench).
The major market for potted plants is the chain store who has taken
over to a large extent from the traditional retail florist. Low mark
ups, little/no service and strong competition are what has kept retail
prices stagnant for potted crops.
Bedding Plants - The Spring production of bedding plants
is quite often the starting point for people getting into the greenhouse
business probably because of the strong demand for plant material
and the relative ease of starting. Many will start with a small hoop-shaped
quonset greenhouse, unit heater, ventilation fan and some snow fence
benching.
Growers can purchase flats already filled with media, plugs (small,
singulated plants) from specialist propagators or buy already transplanted
flats for their greenhouse. In short, you can be in business very
quickly.
The bedding plant season usually will yield 1.5 turns for the floor
space and about 25% additional with overhead hanging baskets. Gross
returns are in the $8 per sq. ft. area. Average wholesale price per
flat is $8 with direct costs being around $5.
Bedding plants are either sold direct (by retail growers) or to the
chain store/garden centres.
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Summary
The wholesale production of either greenhouse flowers or vegetables
is largely dependant on the export market (U.S.A.). You will need
to have a comfort level with the future of the business as it may
be impacted by the value of the Canadian dollar relative to the U.S.
For vegetables, spend some time at some of the large packing plants
in the Leamington area, the Ontario Food Terminal and perhaps the
Greenhouse Vegetable Growers Marketing Board Office to get a sense
of the dynamics of the business.
For flowers, a few mornings at the Ontario Flower Auction in Mississauga
or the Ontario Food Terminal will give you an appreciation of the
wide variety and excellent quality that is being produced and/or marketed
in Ontario.
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References
OMAF Publications:
Pub. 370 Production Recommendations for Greenhouse Floriculture
($10.00 + GST). Contact the Publications Order Desk at 1-888-466-2372
A list of Agriculture and Agri-Food Canada’s publications
is available by writing to:
Departmental Publication Service, Corporate Services Branch, Agriculture
and Agri-Food Canada, Sir John Carling Building, 930 Carling Avenue,
Ottawa, Ontario K1A 0C5 phone: (613) 759-6610/6626 or fax: (613) 759-6726.
You can also visit their website at: http://www.agr.gc.ca/index_e.phtml
There are a number of excellent magazines with a monthly publication
that are subscribed to by many Ontario growers:
Greenhouse Canada-222 Argyle Ave., Delhi, Ont. N4B 2Y2
Canadian Florist Magazine-#1,1090 Aerowood Dr., Mississauga,
L4W 1Y5
Grower Talks Magazine-P.O.Box 9, 335 N.River St., Batavia,
Ill, USA, 60510-0009
Internet Sites:
OMAF - www.gov.on.ca/OMAF has an expanding home page that includes
staff, available media & leaf analysis labs, newsletters, upcoming
conferences & meetings, etc.
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Reference Books
The Ohio Florists Association has an excellent series of reference
booklets as follows:
- Tips on Growing and Marketing Garden Mums
- Tips on Growing and Marketing Hanging Baskets
- Tips on the Use of Chemical Growth Regulators on Floriculture
Crops
- Tips on the Use and Safety of Chemicals, Biologicals, and the
Environment on Floriculture Crops.
- Tips on Growing Bedding Plants, 3rd Edition.
- Identification of Insects and Related Pests of Horticultural Plants-Pictorial
Guide.
- Tips on Growing Zonal Geraniums, 2nd Edition
- Tips on Growing Poinsettias, 2nd Edition
- An Introduction to Greenhouse Production
- Ball Perennial Manual: Propagation and Production
- Grower Talks on Plugs 11
- Holland Bulb Forcer’s Guide, 5th Edition
- Plant Basics, A Manual for the care of Indoor Plants
Note: there are more being added regularly.
Available from:
O.F.A. Services Inc.
2130 Stella Court, Suite 200
Columbus, Ohio
43215-1033 USA
The Grower Talks "Bookshelf" also has an excellent
series of reference books available:
- Ball Pest & Disease Manual, 2nd Edition
- Plug & Transplant Production-A Grower’s Guide
- Ball Perennial Manual
- Ball Red Book, 15th Edition
- Ball Field Guide to Diseases of Greenhouse Ornamentals
- Ball Culture Guide: The Encyclopedia of Seed Germination
- Bedding Plants IV-A Manual on the Culture of Bedding Plants as
a Greenhouse Crop
- Diseases of Annuals and Perennials: A Ball Guide
- A Growers Guide to Water, Media and Nutrition for Greenhouse Crops
- Geraniums IV
- New Guinea Impatiens: A Ball Guide
- Grower Talks on Retailing
Note: there are more being added regularly
Available from:
Grower Talks Bookshelf
P.O.Box 247
St. Charles, Ill.
60174—0247 USA
Conferences/Educational Meetings
There are three major Conferences that have a combination of speaker
sessions and trade/exhibit areas that are designed specifically for
the commercial greenhouse grower:
Canadian Greenhouse Conference—held in October at the
University of Guelph.
The Ohio International Short Course is held in early July
at Columbus, Ohio
Grower Expo is held in early January at Chicago, Illinois.
NOTE: The above mentioned magazines, home pages, reference
books and conferences is not a complete list but does represent the
authors opinion of the major ones. There are a number of "speciality
crop" meetings/reference books for a particular commodity that
are also excellent. For further information, contact the greenhouse
crop advisor nearest to you.
Related Links
For more information:
Toll Free: 1-877-424-1300
Local: (519) 826-4047
Email: ag.info@omaf.gov.on.ca
