The Wizard’s Wand October Edition

Good day from the Wizard,

We all must take a moment and send our prayers to all the people that Hurricane Ian affected in so many parts of Florida, Georgia, and the Carolinas. All the first responders as well as all the people donating time, food, resources, and money deserve a big shout out. We have heard that many trucking companies have donated their equipment to deliver loads filled with life necessities that are very needed in these areas. We are hearing of damage in the green-producing areas of Florida. Our thoughts are with them for a quick recovery. This will further tighten the market on greens, which have already been scarce for a while.

Well, the good news for September is that the iPhone 14 Pro is new and improved with the best camera ever. A great camera to take all your floral videos and pictures is available now!

Now for the real floral news. September was good, but not as good as in 2021. The items that everyone wanted were tight in supply, like snowflake white spray roses, white roses, and, of course, fall color items. Most other items were available without any major issues. The wedding and event predictions based on the chart’s numbers may not have lived up to the original expectations.

Novelty and niche items were in high demand, and dried and preserved flowers are still strong and becoming part of the new normal.

The Wizard is hearing greenhouse production in Europe will be down about 30% or more this coming winter due to increasing heating costs from high natural gas prices. We hear there will be some shortages, mostly on chrysanthemum-related products. I have spoken to some large Colombian growers of these products and they have said European demand is increasing even with the stress on the Euro. They are also experiencing a lot of farm visits from potential new customers and old customers wanting to increase their numbers. One farm told me it has been a revolving door of visitors the past few days from the UK, Germany, and Holland.

The war in the Ukraine has not helped the worldwide flower market. Putin’s antics have caused many situations in the Eastern European market to get worse for the floral trade. Besides natural gas, the area is also a major area for fertilizer production. Prices for fertilizer have hit record highs.

2022 has been a La Niña year. Some growers have reported that in Bogota it has rained every day of 2022. Ecuador’s weather has not been stellar either. The market has been propped up a bit due to this poor weather’s influence on production.

Possibly, the rise in interest rates and the stock market’s recent performance could debunk some recent reports that the floriculture industry shows no signs of slowing down. We have some strange economic conditions taking place at the same time. These conditions don’t usually occur this way, so it is hard to predict what will happen to our beloved industry.

As we know, the cut flower business tends to slow down by mid-October. I do not think this usual trend will be reversed. I hope it does not happen in a worse manner than usual. We have seen the housing industry take a small step backward. Some realtors have said that the number of sold listings was down 13.2% from the year before and that the average number of days on the market has been going up.

What would a Wizard’s Wand be without a few logistical items? And now for some logistics tidbits!

• We narrowly avoided a rail strike (some truckers had a short boom during talks of this strike).
• “There is no doubt that container volume is slowing quickly. Ocean container spot rates from China to the U.S. West Coast have dropped from $9,600 to $3,800 since our June report to today, a reflection of slowing demand. And by the way, right now is supposed to be the peak season for ocean containers.”
  –Craig Fuller, CEO and Founder of FreightWaves
• According to ShipMatrix’s annual forecast for peak season activity, the market will be saturated with 110 million of parcel capacity per day. However, daily demand is likely to average 92 million parcels per day. This will result in a daily capacity surplus of 18 million seats that will be hard for carriers to make up for without cost reductions.
• The 2022 forecasts are in sharp contrast to the 2020 and 2021 peak seasons, when daily demand exceeded capacity by 7.2 million and 1.3 million parcels, respectively, ShipMatrix said.
• The flat year-over-year demand is due to more consumers returning to in-store shopping and changes in delivery patterns to reflect more shipments going to stores instead of residences, ShipMatrix said.
• “Delivery demand will be hit by rising inflation, which will curb consumers’ discretionary buying power,” ShipMatrix said. In addition, more consumer spending is being directed to services such as travel and entertainment and away from goods purchases, ShipMatrix said.
• FedEx is the latest corporate giant to be shocked we’re no longer buying lots of stuff.
• Despite dropping demand and changes in consumer habits FedEx still announces there highest ever general rate increase.
• The benchmark diesel price, used as the basis for most fuel surcharges, is back below $5 per gallon.
• According to the Energy Information Administration of the Department of Energy, the average retail diesel price in the U.S. last week was $4.964 per gallon, a decline of 6.9 cents from the prior week. It marked the 13th decline in the past 14 weeks. 

To summarize, we are in a totally different world this year. COVID can not be blamed for everything, but it has certainly led us to this uncertain world. Inflation haunts us as well as possible lackluster sales. LET’S HOPE THIS REVERSES ITSELF AND WE ARE BACK TO A GROWING ECONOMY IN THE FOURTH QUARTER OF 2022 OR THE FIRST QUARTER OF 2023. I’M OPTIMISTIC BECAUSE MANY OTHER ECONOMIC FACTORS ARE POTENTIALLY ALIGNED THE RIGHT WAY FOR A QUICK CHANGE.

Thanks for reading my rants,

The Wizard