Flower Market Prices & Volumes – Chris Smellie

Most flower growers in NZ receive weekly technical and other information put out by the NZ Flower Growers Association. In the process of sourcing this information I see a lot of articles about the markets in other parts of the world. Much of this information is detailed and no doubt of considerable use to the producers supplying those markets as well as other people in the distribution chain. This kind of complete market information is not available in NZ.

Given that we have the growers at one end of the supply chain and florists supplying consumers at the other end with a variety of wholesalers and the auction houses in between, I approached the two major agents involved in flower distribution – the auction houses. My concept was to have weekly price & volume information from all operators between the growers and the retailers, supplied to an independent body which would combine the information and provide a picture of supply and demand for flower varieties in the main cities. The objective is to provide growers with an overall picture of the NZ demand for flowers on a year by year basis from which planning could be done to fill demand gaps and avoid oversupplies.  A far cry from the current knee jerk reaction we have of short supply one season being followed by oversupply the next, because some growers have picked up on the high prices being received in the first season.

 Below is part of the letter I sent to the Managers of both UFG and Floramax markets.

“I have had more time to think through what I think would work without either of you giving away sensitive  information.

What I propose is that: -

Both UFG and Floramax provide weekly information on flower types and sales volume for the main markets as well as median prices [perhaps not all flower types if volumes traded are very small].

The information would be provided to an independent party who would combine the volume figures and the prices for flower types and each sales location and then provide the information [overall volumes and prices only] back to me for distribution to growers.

So there would be no reference back to volumes or prices from either auction house.

I would also like to see Fresh Direct and other large wholesalers providing the same sort of information to the independent party for inclusion in the overall volumes and prices.

If possible it would be good to have indications of what is NZ product and what is imported but I would not want us to get hung up on that point and prevent progress elsewhere.

I have talked to Mike Chapman at HortNZ about having them provide the combined volume and price analysis and data processing; he said it was possible that HortNZ could do it.

There would be an initial programme set up cost and then a weekly charge for the processing which we would be paying all or a portion of depending upon who benefits.

There would be benefits for both auction houses and other wholesalers, definite benefits for growers and a benefit to NZFGA also”

While both managers gave the proposal consideration and some degree of praise, neither was prepared to pursue it any further. Both expressed concern about competition from product going around the auction markets and to some degree concern about competition between the auction markets. There was a preference to keep the market information for the benefits of their own customers i.e. keep it “In House’. 

I pointed out that even for the recipients of that market information; they would not be receiving anything approaching the complete picture. I am left wondering what can be done to improve the market information relating to the sale of cut flowers and foliage in NZ.  I get feedback from growers upset when they produce well, receive poor prices and are then told by the auctions that they are oversupplying the market.  This is when growers begin to look at alternative methods of selling their product.

Given more cohesion in the industry we could and should, do a lot better at - a) smoothing the production peaks and - b) managing the sale of flushes better so  growers are not faced with a loss on large consignments.

However under the current conditions many growers may be able to improve their overall returns by communicating with their marketers frequently and in detail for relevant information regarding their own flower product and its place in the flower demand picture.