Sustained forests; sustained profits

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The Plant Nursery

The greatest needs for a profitable nursery are space, time, and management power. Within Lasting Forests can be created a nationally conspicuous plant nursery because space is available on the mined benches, time can be bought (as in the age of initial stock used in creating the nursery), and managerial power is available in :

1. using expertise that can be acquired by careful attention to the selection criteria,
2. using visiting consultants,
3. using computer systems for profit optimization (requiring a totally planned system), and
4. using trained staff.

Before going into detail, it is important to emphasize that the nursery enterprise makes little sense if evaluated alone. It should not be attempted as singular or as a disjunct. It can be profitable when seen with its significant interactive enterprises.

It will succeed, because:

1. It can afford to support part of a very good marketing agency.
2. It can achieve economies of scale, starting at 5 acres, and can expand under critical computer analyses, to an optimum scale, virtually unlimited by space constraints.
3. It can specialize in mass-production practices and sales for reclamation plants. There is competition, but it is not substantial, and poorly developed. It may even engage in an anti-public- subsidization-of-nurseries move to reduce that competition, and to capture the regional market.
4. It can utilize existing U.S. Forest Service and state forestry agency computer programs, representing investments well in excess of a half-million dollars, to allow planting, management, and harvesting in the most cost effective ways possible. [In 1980 however, software was still being proposed for the Intermountain (Western) Nurseryman' s Association.]
5. Diverse stock can be used to stabilize profits in the face of variable weather, insects, disease, and markets and to utilize site differences.
6. Various tax strategies can be employed because the nursery can be seen as an integral part of the overall Lasting Forests system producing products for local use (e.g., landscape and fruit trees), thus it may be a cost. In most cases it will be viewed as a profit-making enterprise.
7. Much manual labor is needed in the modern nursery and this can be a major force in overall community relations, especially as seasonal work for children and women, especially as the new industry as coal fades.
8. It will have its own outreach and sales group in both the urban forestry as well as reclamation groups.
9. It will have its local promotion through affiliation with an arboretum, educational enterprise, and reclamation demonstrations.
10. It will have "free" computer support or an amount scaled to its needs (without incurring hardware costs).
11. It can sell its system services and develop support-nurseries and cooperators throughout the coal field. These would be lands under contract, a reduction in competition, and a regionalization of action to improve stability of supply.
12. The nursery can engage in tax-cutting, self-serving research on wild seed stock, genetically superior stock, containerized stock and a variety of mined-land reclamation projects involving nursery stock (Everett 1980).
13. New ventures in providing sod blocks and grass plugs, even grass tubelings to expedite reclamation are yet to be explored.
14. Both abandoned mines as well as plastic greenhouses with new technology (University of Connecticut at Storrs is working on energy efficient greenhouses) offer great promise for propagation before outplanting is done.
15. Estimates of what to plant to meet an unknown market next year can be computer-aided, and risks progressively reduced with well-known Bayesian estimation procedures and autoregression analyses.
16. A state program in non-game wildlife management started in 1982. There ar major needs and low supply of wildlife plants available. A sizeable part of this new market can be captured by aggressive work.

The enterprise can be created almost anywhere.It should be very near road and/or rail because of the weight of soil and plants. An abandoned mine bench should be used. It should be near people for work, including those being bussed or trucked to the area. A first site above Appalachia as part of the community activities seems very appropriate. These can be in conjunction with an arboretum and the urban forestry office.

I recommend an experienced nurseryperson be employed to handle the practical day-to-day activities of work with equipment, plants, soils, irrigation, and labor. An enterprise manager will be key. It should be someone sympathetic to a computer-guided operation, and equally knowledgeable about use of nursery products as to production of products. The enterprise is not designed as a tree, shrub, or grass producer, but as a profit producer.

The other staff is (1) a horticultural or forestry expert responsible for systems development, and (2) a research specialist with grant-getting and educational responsibilities. Other staff are part time: laborers, consultants, systems analysts, programmers, transportation experts, market specialists. Two master of science candidates can design the needed total software program to begin operations. The students should be in wildlife management and in operations research and a joint project developed. The system can be created concurrently with site preparation and construction.

My perspective on profit mentioned above is not unique, but is rarely seen in typical nursery publications and certainly not in those of the public nursery.

The basics of this perspective are to produce a mix of plant species that will give the highest possible total expected net present-discounted value over a 5-year planning horizon. We go for a variety of plants, perhaps 20, in small greenhouses (not the large ones where species-specific conditions are difficult to achieve). These are modular, cost effective, and can be expanded or reduced based on optimum scale of operation, computer determined. We buy stock and resell where it is cost effective to do so; we buy and replant then inflate the price by marketing, then lift and resell; we produce plants; we cater to site-specific conditions, marketing plants that will survive on the customer's site and meet his objectives, not employ the gross plant-anything-and-hope-for 50%-survival strategies now in vogue. We give special names to plants like "The LastingForests rhododendron," which is no different than others (though we might develop a variety), but it comes well-packaged with excellent root, and with superior planting instructions and some harsh (but homey) words about not using any lime near this plant. The customer pays for the plant and information. The plant is enhanced by what we tell about it, how we care for it, and the personality it takes on due to new knowledge about it. The profits come because of low investments in knowledge, publications, packaging, and the planting period. The 4-P's to the Lasting Forests' nursery success include the planting period and this to most customers is the spring. A key marketing strategy will be in learning how to change people's behavior to get plants sold throughout as much of the year as possible. By careful planning, the winter work can include site preparation with mulches, and accelerated sales work (including staff shifts to the Christmas tree enterprise). New packaging may revolve around containerized stock work and selling "The Crests Tubeling," a plant with container and materials especially selected for harsh conditions (Jensen 1981:132). Different colors of containers or media can highlight the desired seasonal shift in planting.

Nursery operations are expensive. A federal facility in Washington produces 30 million forest tree seedlings per year in a $2.5 million processing facility. This yields a coefficient of 12 trees per dollar or, under less-than-federal standards, 15 trees per dollar spent on a facility. The facility is for employees, a main packing room, and storage coolers. An investment to start Lasting Forests nursery facility is estimated at $100,000. This provides a capacity for 1.5 million forest tree seedlings and fewer shrub and containerized stock--sufficient capacity for a significant operation.

I have acquired a very lengthy bibliography on containerized stock (e.g. Pawuk and Barnett 1979) and much research and development work is currently underway. The VPI and SU Department of Forestry is engaged in research on the topic, especially the introduction of mycorrhizae (fungi) that might improve moisture and nutrient root uptake. There are detailed procedures available (but not integrated into a total system) in Tinus and McDonald's "How to Grow Tree Seedlings in Containers in Greenhouses" (1979).

The profit potentials are perceived to be very great (equivalent to at least those of Christmas tree production, computed at in excess of 17%). The needs for nursery stock to develop the property are so great that it appears that it may be cost effective to produce it all locally. Not only profit making, but cost savings justify the enterprise. The potentials (referring to the above diagram) are:

1. Systems development and sales to other nurseries, both private and public
2. Sales to reclamation groups, region-wide
3. Support for an arboretum and use of an arboretum as a seed orchard
4. Sales from the arboretum ("I want trees like those on my property")
5. Support for urban forestry planting material recommendations, sales, workshops, and education
6. Enhancement of area wildlife habitat including furbearer feeding areas, hedgerows, and stream bank stabilization and cover for riparian wildlife
7. Supplies of key landscape plants for wildlife, state and region-wide
8. Reclamation including site specific computer analyses of best plants and seed-mixes
9. Creating a planting service that includes plant stock and an efficient, experienced, safe, field crew
10. Demonstration areas showing use of plants for different reclamation functions
11. Supply of orchard and vineyard planting stock, including trading among nurseries to achieve certain economics
12. Animal and human waste may be effectively used with chips and local materials as a rooting material
13. Basic starter stock for a Christmas tree enterprise is needed and can be supplied
14. Landscaping will be needed throughout the bench villages
15. Citizen of the region will find at least part time work that is meaningful in the nursery
16. Members of the rehabilitation community will also find useful work opportunities with the many aspects of the nursery enterprise

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This Web site is maintained by R. H. Giles, Jr.
Last revision December 15, 2001.