Nurseries, Garden Centers & Farm Supply

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 9,800 nurseries, garden centers, and farm supply stores in the US sell lawn and garden products and farm supplies. Major product categories include grain and animal feed; fertilizer, lime, chemicals, and other soil treatments; outdoor nursery stock; pet supplies; and hardware, tools, and plumbing and electrical supplies. Companies may also sell fuel (oil, LP gas, wood, charcoal), automotive products and supplies, lawn and garden tools, and indoor plants. Services include equipment rental and repair and consulting services (landscape design, agronomy). Companies may offer delivery services for large orders (fertilizer, sod, dirt).

Competition from Alternative Sources

Nurseries, garden centers, and farm supply stores compete with a variety of alternative retailers, including home improvement and hardware stores and general merchandise retailers.

Highly Seasonal Sales

Sales for farm supply retailers are highly seasonal, with peaks during the spring and fall to support crop schedules.

Industry size & Structure

The average nursery, garden center, or farm supply retailer operates out of a single location, employs 13 workers, and generates $3-4 million annually.

    • The nursery, garden center, and farm supply retailing industry consists of about 9,800 companies operating 13,500 stores that employ about 131,000 workers and generate about $35 billion annually.
    • The industry is highly fragmented; the top 50 firms account for about 41% of industry sales.
    • Tractor Supply is the largest farm supply retailer in the US with over 1,940 stores. Large nursery and garden centers, such as Armstrong Garden Centers and Stein Garden Centers, have multiple locations but typically operate in one or two states. Most companies are small, independent operations.
                                  Industry Forecast
                                  Nurseries, Garden Centers & Farm Supply Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  May 17, 2022 - Fertilizer Prices Skyrocket Amid Russia’s Invasion of Ukraine
                                  • Global inflation was an emerging issue before Russia invaded Ukraine and has since gotten worse. Russia is the world’s largest fertilizer producer, and its invasion of Ukraine has reduced exports which has pushed fertilizer prices higher. Oil and natural gas prices have also risen as the war roiled global energy markets. US producer prices for fertilizer were up 70% in April 2022 compared to a year earlier. Prices for nitrogen fertilizers and phosphorous fertilizers were up 112.3% and 63.1%, respectively, over the same period.
                                  • US net cash farm income, a demand indicator for farm supplies, is forecast to rise by $1.9 billion (1.4%) to $136.1 billion in 2022. Net cash farm income includes cash receipts from farming and farm-related income, such as US government payments. Expected cash receipts for animals and animal products in 2022 are expected to increase by $17.4 billion (8.9%) to $213.3 billion on higher receipts for cattle, milk, and broilers. Crop receipts are projected to increase by $12 billion (5.1%) amid higher corn, soybeans, cotton, and wheat sales. Direct government payments are estimated to have declined to $27.1 billion in 2021 from $45.7 billion in 2020 amid fewer supplemental and ad-hock COVID-19 relief payments. Farm supports are expected to fall to $11.7 billion in 2022.
                                  • Retail sales for building material, garden equipment, and supplies dealers decreased 0.1% in value month over month on an adjusted basis in April 2022 and were down 1.2% on an unadjusted basis compared to April 2021.
                                  • US existing home sales, a demand driver for remodeling activity, declined 2.7% in March from the prior month and fell 4.5% compared to March 2021, according to the National Association of Realtors (NAR). The NAR said that rising interest rates and home prices are reducing consumers’ buying power. The NAR said it expects transactions to drop by 10% in 2022, which should help moderate rising home prices.
                                  • Homebuilder sentiment, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, decreased eight points to 69 in May 2022 from 77 in April, marking the fifth consecutive monthly decline. Higher materials costs and rapidly rising interest rates are making housing less affordable, which is weighing on builder confidence. Builders report that building materials prices were up 19% from a year earlier, and in less than three months, interest rates rose to a 12-year high. Less than half of existing and newly-built homes are affordable for a typical family, which is pricing many potential first-time homebuyers out of the market.
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