CNGA LooseLeaf June/July 2019

9 LooseLeaf  June/July 2019 colorad o nga.org crops, the impact is less in terms of timing. However, scheduling the propagation of cuttings for field and container production and our direct liner sales is trickier. Still, we are willing to take on more risk with greenhouse propagation, because even if we are not completely accurate and have to toss liners from propagation, it costs much less than if we have to toss grown, finished stock. RB Planning for a recession is tough. Knowing that we have to be more mindful of production, JFS has really adapted. When a recession is looming we know we can always improve efficiency, limit waste and fine-tune processes, but these are things we focus on all year long. Availability of labor limits growth and we never compromise our quality, so we’ve focused on small increases and are mindful of overproducing so as not to risk quality expectations. We expect more gradual increases in our future production numbers while maintaining the expected quality customers can rely on. Many companies would be happier to be sold out of inventory than to have more inventory than needed. If the economy is great, we’re happy about that and of course want to sell more. If the economy isn’t great, we want to be happy we didn’t produce too much. We have to find the sweet spot. Production based on Sales History Because we self-propagate, we control the number of plants that we bring either to field or container production each year. We base that number on historic sales data from the last year and our three- and five-year sales history, as well as trying to decide what demand will be in two to three years. We have approximately 30 salespeople in markets all over the country, who are in touch with customers every day. They may see shortages or surpluses with customers now, and can help us plan for the future. Input from them helps us in terms of understanding or forecasting what the demand may be in each market nationwide. Then, we schedule a production number that we can sell out of and strive to not have surpluses. If we sell out, we won’t deviate too much up or down with production. Whether we are dealing with shortages or surpluses, we always feel it’s super important to find ways to satisfy our customers. RB What we produce is based on prior years’ sales and the buzz in the market. A few times a year our management group will sit down and discuss our sales/production history, plant sell-through and production difficulties to come up with production plans. If we realize that production has been higher than sales output for multiple years, we adjust, but we are not making drastic changes. We are mindful and small with our changes, because what we are planning for today affects us five years from now. Some Influences on Customer Demand Each market across the country is unique and demand will vary. Even in a down economy, we see some markets that are not down. It’s also really important to look at each channel of distribution that we’re selling into each year. The demand for a retail cash-and-carry business can be very different than demand from landscapers and the wholesale channel. The customers’ behavior may be different from channel to channel. It’s also important to watch nationwide economic indicators, which certainly influence consumer behavior. A strong or weak market will influence how consumers spend and how much disposable income they have, or feel they have. RB We ship our trees all over the country and test trees at multiple sites. We’re always evaluating our trees for better hardiness, better disease resistance…etc.—it must be an improvement to be introduced. It is vital to JFS that our trees are proven and we can stand behind “We ship our trees all over the country and test trees at multiple sites. We’re always evaluating our trees for better hardiness, better disease resistance…etc.—it must be an improvement to be introduced.” – Rich Bailey Photos courtesy of J. Frank Schmidt & Sons continues on next page »