California Power Crisis Hits Valentine's Flower Growers

As they build up to one of their most profitable weeks of the year, California growers have been hit hard by spiraling heating costs from California's power crisis.

California natural gas prices have shot up, partly the result of flawed electricity deregulation, forcing some growers - many of whom use natural gas to heat greenhouses - to cut production to curb costs.

"The skyrocketing cost of natural gas is equivalent to a major natural disaster for our industry," Lee Murphy, president of the California Cut Flower Commission, said recently.

California's $300 million-a-year industry, which produces more than 60 percent of fresh flowers and 15 percent of roses grown in the United States, expects a 15 percent drop in the Valentine's Day crop.

This could put prices up, especially close to Feb. 14.

"There are certainly some fuel cost issues that the growers are passing along," said Jim Krone, executive vice president at the International Cut Flower Growers Association, representing 70 percent of greenhouse flower producers in the country.

"You might see a 10 cent increase per stem, or $1.20 increase for a dozen roses. I'd be surprised if there was not some moderate increase," he added. The average rose stem last year cost between $2 and $2.10, according to the Chicago-based Floral Index, which monitors prices.

FROST IN COLOMBIA. Added to the cuts in California production, a recent frosty spell in Colombia and Ecuador has slightly delayed crops in those countries, which between them provide 70 percent of the flowers sold in the United States.

"How will this play out with the predicted loss in US domestic production is hard to say," Krone said.

"I'd suggest you get your order in as early as possible. It may get kind of tight in the end."

But flower wholesalers are confident that imports, which account for 80 percent of the U.S. market, will make up any shortfall in domestic production, keeping supplies and prices steady.

"Our wholesalers see prices about the same as last year," said Jennifer Sparks, director of Consumer Marketing for the 15,000-member Society of American Florists.

But with natural gas prices likely to stay at least double last year's prices, future flower crops may be impacted more severely, said Murphy at the California commission.

"Without some form of relief, the future looks very bleak for California's cut flower industry," he said.

"We might see some people going out of business. People are going to have to get a little more creative."