University of Georgia
The green, or plant, industry can do many things to be both environmentally friendly and more profitable, say University of Georgia experts. Things as simple as changing light bulbs or as advanced as generating electricity or using better financial analysis can cut costs.
A one-hour session introduced four years ago on how the green industry in Georgia could grow greener has now blossomed into nation-wide workshops, said Paul Thomas, a UGA Cooperative Extension horticulturalist.
“The thing that amazed growers around the country most was showing them how something as simple as changing out their light bulbs could save them so much money,” he said. “For example, in one acre of lighted cut-flower production, a grower could save between $25,000 and $30,000 annually.”
Switching from incandescent to compact fluorescent bulbs can save growers $700 per greenhouse each year. Diode array light bulbs can save even more, he said. Heat curtains and drip irrigation can add to even more savings.
Alternative energy The industry can also make its own electricity and “keep the meter from flying off the wall” in the process, said UGA Extension economist Forrest Stegelin.
Typically, greenhouses use propane to keep plants warm in winter. Traditionally, electricity has been too expensive.
In the fall of 2004 when gas prices spiked by as much as 30 percent, many growers hit hard times fast, said Thomas.
“Growers were literally going out of business before they sold their crops because they could not effectively manage their fuel costs,” he said. “The profit margin had disappeared seemingly overnight.”
Interest in alternative energy started growing in response to high fuel costs. Stegelin says Georgia growers interested in it are mostly focusing on solar power, which works best in south Georgia, or wind power, which does best above the gnat line.
Some growers would like to generate electricity from nearby streams, called hydroelectric power. In Helen, Ga., a nursery and a winery are doing this.
Biomass burning, which uses wood or corn stalks to heat greenhouses and produce electricity, is another option. So is anaerobic digestion which captures methane created by landfills or animal waste lagoons.
“Three years ago, it was like you must be a tree hugger of sorts to use alternative fuels,” Stegelin said.
Alternative energy now is a viable option for those who invest in it. In fact, if growers generate more electricity than they need, they can make money by selling their excess back to the grid.
Considering the costs
In the late 1990s, Stegelin suggested growers use financial benchmarks, a tool other industries use regularly, to figure out where their money is going.
Based on Stegelin’s writings, Texas A&M professor Charlie Hall developed software that growers can use to track how sales, labor, plant loss, material costs and investment returns relate to each other.
The software also shows how a grower’s operation compares to national standards and can help answer “What if?” Thomas said. It can spell out to any grower how one decision – like changing the light bulbs – will make more money. It can show how different decision might lose money, too.
“By using benchmark analysis, we can get a very close and accurate estimate of how a small change can affect profit,” Thomas said.
When things went bust in 2008, for example, and sales went down, many growers didn’t adjust fast enough, Thomas said.
“They did not know what to do or when. Had they been doing benchmark analysis, it would have helped. Those who did had a six-month window to make important adjustments,” he said.
(Stephanie Schupska is a news editor for the University of Georgia College of Agricultural and Environmental Sciences.)
(Stephanie Schupska is a news editor with the University of Georgia Public Affairs Office.)