California’s natural gas industry probably shouldn’t expect anyflowers in sympathy anytime soon. The California Cut FlowerCommission said last week that some of the state’s growers havebegun laying off workers and even sacrificing their Valentine’s Daycrops because they can’t afford to heat their greenhouses.
“Some California cut flower growers will be forced to closetheir greenhouses altogether if relief from soaring natural gasprices is not found — and soon,” said Lee Murphy, president ofthe CCFF, based in Watsonville. “Heating bills are reaching$500,000 a month for some growers, as compared to $100,000 a yearago. Growers simply cannot continue operating with those exorbitantcosts. The profit margins in our industry are tight enough as itis, and with nearly a 600% increase in heating costs, growers maysimply have to close their doors.”
Already announcing cutbacks in recent weeks because of the highnatural gas prices are U.S. natural gas processing plants (seeDaily GPI, Dec. 11). The usually more expensive gas liquids nowcost less than the raw natural gas, and buyers looking for propane,butane, isobutane and chemical feedstocks may have to look a littlelonger and spend a little more than they did a month ago.
For California growers, the skyrocketing cost of natural gascould not have come at a worse time, especially for the state’srose growers. December is the month when buds form on rose plantsto produce the critical Valentine’s Day crop. That February holidayaccounts for as much as 30% of a rose grower’s annual sales.
Murphy said that the government might need to step in to helpthe state’s $300 million-a-year industry through the currentcrisis. “The skyrocketing cost of natural gas is equivalent to amajor natural disaster for our industry,” he said. “Without someform of relief the future looks very bleak.” Growers usuallyqualify for assistance when a crop is lost however, in this case,Murphy said compensation will be “desperately needed for crops notbrought to harvest for Valentine’s Day” and for those crops thatsell below the high production costs.
About 60% of domestically grown flowers are produced inCalifornia, and 15% of the fresh cut roses sold in the UnitedStates are from the state.
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