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HORTICULTURE :

CHALLENGES AND OPP ORTUNITIES

IN THE US A

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Market Report

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HORTICULTURE IN THE USA

Challenges and Opportunities

April 2021

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INHOUD

1. Introduction ... 3 2. Horticulture in the USA... 4

2.1 Governmental Support 4

2.2 Economical Factors 6

2.3 Social Factors 9

2.4 Technological Factors 9

2.5 Environmental Factors 10

2.6 Legal factors 11

3. Required import documents ... 12

3.1 General import documents 12

3.2 USDA regulations 13

3.2.1 Phytosanitary Certificate 13

3.2.2 Plant Permit 13

3.2.3 Databases 13

3.3 FDA regulations 14

3.3.1 Prior Notice 14

3.3.2 Register in FDA System 14

3.3.3 Labelling and Packaging 14

3.4 Additional import documents for plants 14

3.4.1 Certificate 15

3.4.2 Permits 15

4. Useful Addresses ... 16

4.1 Public Actors 16

4.2 Events 16

5. Opportunities for Horticulture in the USA ... 16 6. Conclusion ... 19 7. Bibliography ... 20

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1. INTRODUCTION

Definition

Horticulture is a sector within the agricultural industry. This industry can be divided into several sectors:

arable farming,

horticulture,

forestry,

animal husbandry,

and aquaculture.

The horticultural sector can be divided into three main sub-sectors: vegetable growing, fruit growing, and floriculture.

As seen in Figure 1, horticulture has several subdivisions as well.1 The term horticulture is very similar to arable farming, however, there are some differences between the two sectors. Arable farming includes growing crops, such as potatoes, grains, corn, etc. in open ground, while horticulture entails growing

1 Consulted on (ISHS, International Society for Horticultural Science, 2012)

Figure 1: Components Horticulture

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vegetables, fruits, and plants in open ground, greenhouses, and orchards. These methods are used to create the ideal environment for plants to grow.2

Horticultural production worldwide

According to the most recent data (2018) that was published by "Statista", the total worldwide fruit production was 868.1 million metric tons in 2018. Approximately 13.33% or 115.74 million metric ton of the total fruit production were bananas.3

Following the most recent figures (2017), the worldwide vegetable production in 2017 amounted to 1,094.34 million metric tons. About 16.66% or 182.3 million metric ton of the total global vegetable production were tomatoes.4

Lastly, based on the most recent statistics (2016), global flower production is estimated to have a total value of 55 billion US dollars. The country that has the highest export share within this industry is the Netherlands.

They are responsible for approximately 43% of the global export of flowers5.

2. HORTICULTURE IN THE USA

2.1 GOVERNMENTAL SUPPORT

Governmental support on the federal level

Several incentives are put into place on the federal level through the United States Department of Agriculture. Some examples include, but are not limited to:

• Conservation Technical Assistance (CTA): aids land users, communities, state and local governments, and other federal agencies in planning and implementing conservation systems.6

• Environmental Quality Incentives Program (EQIP): offers financial and technical help to assist eligible participants to install or implement structural and managerial practices on eligible agricultural land.

• Conservation Innovation Grants (CIG): stimulates the development and adoption of innovative conservation approaches and technologies while leveraging federal investment in environmental enhancement and protection, in conjunction with agricultural production.7

2 Consulted on (NBD Biblion, 2020); Consulted on (Vlaanderen, sd).

3 Consulted on (Shahbandeh, Global production of fresh fruit from 1990 to 2018, 2020) (Shahbandeh, Global fruit production in 2018, 2020)

4 Consulted on (Shahbandeh M., 2020) (Shahbandeh, Global production of vegetables in 2017, by type, 2020)

5 Consulted on (Rijswick, 2016)

6 Consulted on (Incentive Programs and Assistance for Producers, n.d.)

7 Consulted on (Incentive Programs and Assistance for Producers, n.d.)

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• Conservation Stewardship Program (CSP): provides financial and technical assistance to eligible producers to conserve and enhance soil, water, air, and related natural resources on their land.8

• Farm and Ranch Lands Protection Program (FRPP): provides funds to purchase developmental rights to keep productive farmland in use.9

• Agriculture Management Assistance (AMA): supplies agricultural producers with cost-share and incentive payments to voluntarily address issues such as water management, water quality, and erosion control by incorporating conservation practices into their farming operations. 10

Governmental support state level

Each state provides several incentives as well. To give an example, the top three states in agriculture are listed with a redirection towards their initiatives.

California

• California Department of Agriculture: https://www.cdfa.ca.gov/

• Grant opportunities: https://www.cdfa.ca.gov/grants/

Florida

• Florida Department of Agriculture and Consumer Services: https://www.fdacs.gov/

• Grant opportunities: https://www.fdacs.gov/Business-Services/Grant-Opportunities

Oregon

• Oregon Department of Agriculture: https://www.oregon.gov/oda/Pages/default.aspx

• Grant opportunities: https://www.oregon.gov/oda/agriculture/Pages/Grants.aspx

8 Consulted on (Incentive Programs and Assistance for Producers, n.d.)

9 Consulted on (Incentive Programs and Assistance for Producers, n.d.)

10 Consulted on (Incentive Programs and Assistance for Producers, n.d.)

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2.2 ECONOMICAL FACTORS

Market size

Figure 2 displays the top ten states in horticultural sales for 2019.11 These ten states accounted for 66% of the horticultural sales in 2019. The three states with the highest contribution are California ($2.6 billion), Florida ($1.93 billion), and Oregon ($1.02 billion).

The top commodities in U.S. horticulture sales in 2019, and compared to 2014, were:12

• Nursery stock, $4.55 billion, 7% increase

• Annual bedding/garden plants, $2.24 billion, 13% decrease

• Sod, sprigs, and plugs, $1.27 billion, 12% increase

• Potted flowering plants, $1.2 billion, 11% increase

• Potted herbaceous perennials, $923 million, 2% decrease

11 Consulted on (Top 10 states in horticulture sales, 2019, 2020)

12 Consulted on (U.S. horticulture operations report $13.8 billion in sales, 2020)

Figure 2: Top 10 States Horticulture

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• Propagative horticultural materials, bare-root, and unfinished plant materials, $720 million, 4%

increase

• Food crops under protection, $703 million, 12% decrease

Other key findings from the 2019 Census of Horticultural Specialties report include:13

• Family- or individually owned operations made up for the largest number, accounting for 52% of the total amount of enterprises.

• Corporately owned operations accounted for 75% of the total sales ($10.3 billion).

• Total industry expenses were up 6% since 2014, with labor being the largest cost, accounting for 42% of total expenses in 2019.

Product-specific information and more in-depth explanations of the previous statements can be found in the “2019 Census of Horticultural Specialities”:

https://www.nass.usda.gov/Surveys/Guide_to_NASS_Surveys/Census_of_Horticultural_Specialties/

Vegetable growing in the USA

In 2018, approximately 37.85-million-ton commercial vegetables were produced in the United States of America. The two types of vegetables with the highest production value were tomatoes and lettuce, with a quantity of 14 million and 4 million tons respectively. This accounted for approximately 48% of the total produced vegetables in 2018. Furthermore, 60% of the entire harvest was produced in California.14

During the same period, the export of commercial vegetables contributed a total of 6.07 billion US dollars to the American economy, but more importantly, the United States imported vegetables worth a total of 13.66 billion US dollars. The two countries with the highest share of US imports are Mexico and Canada, with 49.62% and 20.44% respectively. Over the last four years, the US import of vegetables has shown a positive trend, with an increase of 17.21% in comparison to 2015. Nevertheless, due to higher export of other agricultural products, such as wheat, corn, and potatoes, the U.S. agricultural trade balance remains positive.15

Fruit growing in the USA

In 2018, a total of 26.02 million tons of fruit was produced in the United States of America. This makes the USA the fourth-largest producer of fruit in the world, preceded by China, India, and Brazil. The types of fruit with the largest quantity are grapes, oranges, and apples, with a production volume of 7.6, 5.13, and 3.88 million ton respectively.16

13 Consulted on (U.S. horticulture operations report $13.8 billion in sales, 2020)

14 Consulted on (Vegetable Growers News, 2019) (Parr, Bond, & Minor, 2019)

15 Consulted on (USDA, U.S. imports: vegetables, 2020) (USDA, U.S. exports: vegetables, 2020) (USDA, Latest U.S. Agricultural Trade, 2020)

16 Consulted on (Shahbandeh, U.S. leading fruits in 2018, 2020) (Shahbandeh, Leading producers of fresh fruit worldwide in 2018, 2020)

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Similar to the international trade of vegetables, the export of fruit is significantly less than the import. In 2018, the US exported fruit for a total worth of 6.6 billion US dollars, while the import costs were valued at 15.2 billion US dollars. The types of fruit with the highest import value were bananas and avocados, with a value of 2.6 billion and 2.4 billion US dollars respectively. These fruit products were mainly coming from Mexico (38.7%), Chile (13%), and Guatemala (6.9%).17

Floriculture in the USA

Lastly, the total sales value of floricultural products, produced in 2018, is estimated at 4.63 billion US dollars.

This value has increased by 15.75% in comparison to 2009 and has continued to show a positive trend over the last ten years. The biggest share of the total products were bedding/garden plants with a share of 47%.

These products were mainly produced in the states of California, Michigan, Florida, North Carolina, and Texas.18

Import and export in the USA and Belgium

In 2018, Belgium imported products from the US within the category of “live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage” worth 169,719 euro, whereas the Belgian export of these products to the USA were worth 127,580 euro. These values are remarkably lower in comparison to the neighboring countries, which can be seen in Table 4.19

Live trees and other plants; bulbs, roots, and the like; cut flowers and ornamental foliage

Import value from the USA to EU (in euro)

Export value from EU to USA (in euro)

Trade balance EU (in euro)

Belgium 169.719 127.580 - 42.139

The Netherlands 63.183.611 232.924.522 169.740.911

France 263.763 2.106.972 1.843.209

Germany 923.953 1.074.822 150.869

TABLE 1:TRADE FLORICULTURE USA AND EU20

17 Consulted on (Workman, 2019) (NASS, 2017 Census of Agriculture, 2019)

18 Consulted on (USDA, Floriculture crops 2018 summary, 2019)

19 Consulted on (European Commission, Statistics, 2020)

20 Consulted on (European Commission, Statistics, 2020)

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2.3 SOCIAL FACTORS

Education

Since horticulture is a niche sector, it is interesting to mention that almost every state offers horticultural majors in local colleges. The following ten colleges are recognized as the best horticultural colleges in the U.S. for 2021:21

• Cornell University

• University of California-Davis

• Pennsylvania State University-Main Campus

• University of Florida

• The University of Illinois at Urbana-Champaign

• University of Connecticut

• North Carolina State University at Raleigh

• Clemson University

• California Polytechnic State University-San Luis Obispo

• University of Georgia

Seasonal Workers

To tackle the barriers when it comes down to finding the right number of seasonal workers, the United States offers a temporary H2A. The H2A temporary agricultural worker program permits employers in the US to bring individuals from other countries to the country to fill the seasonal agricultural jobs.

2.4 TECHNOLOGICAL FACTORS

Both the agricultural and the horticultural industries have experienced a remarkable evolution with the help of technology. Three main elements that had a big impact on this industry are the following: "the tractor, the greenhouse, and biotechnology".22 These innovations helped create higher efficiency and productivity within the industry.23

The innovations have not stopped there. The industry is constantly searching for new ways to improve its production processes. A clear example of this is vertical farming. By growing crops on multiple layers, farmers can increase their production without having to buy more land. Experts believe that with the right amount of investment this innovation may become the perfect solution to increase demand and a shortage of fertile land.24

21 Consulted on (Best Horticulture Colleges in the U.S., n.d.)

22 Consulted on (Smallman, 2018)

23 Consulted on (Smallman, 2018)

24 Consulted on (Haggerty, 2019) (Calderone, 2017)

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"Other innovations include, for example, technologies that harvest crops such as strawberries, peppers, etc independently; sensors that can identify pests and other diseases in horticultural crops; robots that can predict the number of harvests per plant; cameras that monitor plant health; etc.".25

With the help of technology, farmers can adapt to these new climate conditions. However, sustainable farming is not as easy as one might think. Alongside environmental challenges, US farmers are also experiencing financial challenges. This means that even though farmers feel constant pressure to innovate to increase production, this is not always possible due to limited capital and strict governmental regulations.26

Consequently, due to the challenges this industry encounters, the National Institute of Food and Agriculture (NIFTA) offers opportunities as well. NIFTA supports the advances within agricultural technology and aids farmers by offering basic research and development in physical sciences, engineering, and computer sciences, followed by the development of agricultural devices, sensors, and systems. Thirdly, the organization also provides applied research that assesses how to employ technologies economically and with minimal disruption to existing practices. Additionally, NIFTA offers assistance and instruction to farmers on how to use new technologies.27

2.5 ENVIRONMENTAL FACTORS

Climate change

According to National Geographic, climate change can be defined as “A long-term shift in global or regional climate patterns”.28 Climate change is often associated with an increase in temperature due to CO2 emissions. This phenomenon has a very big impact on various industries but is especially hard on the agricultural and horticultural industry.29

In a study that was published by the Institute of Crop Science and Resource Conservation, it was revealed that a temperature change often hurts the development of plants. For example, tomatoes often become smaller, and broccoli may develop irregular heads when exposed to temperatures higher than 25°C30. Furthermore, climate change also has as a result that the temperature is not as low during winter. This harms the development of certain horticultural products, such as cauliflower, asparagus, apples, and other fruits.31 Alongside an increase in overall temperatures, there is also an increase in extreme weather events,

25 Consulted on (AHDB, 2018)

26 Consulted on (Bisbis, Gruda, & Blanke, 2019) (Temple, 2019) (Riensche & Vir Jakhar, 2019) (Reiley, 2019)

27 Consulted on (Agriculture Technology, n.d.)

28 Consulted on (National Geographic Society, 2019)

29 Consulted on (National Geographic Society, 2019) (Bisbis, Gruda, & Blanke, 2019).

30 Consulted on (Bisbis, Gruda, & Blanke, 2019)

31 Consulted on (Bisbis, Gruda, & Blanke, 2019)

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for example, heatwaves, storms, floods, and droughts. These weather events have a very big impact on the agricultural industry as well.

Figure 332 shows how the agricultural industry has been impacted by these extreme weather events over a period of 50 years. Although there is no complete overview of the number of crops that were lost last year, farmers are still losing a significant amount of their harvest due to these extreme weather events.33

The U.S. Department of Agriculture (USDA) is taking measures to create solutions to the challenges and effects of climate change. The department's latest initiative is providing science-based guidance on cover crop management. This specific program helps producers prevent erosion, improve soil properties, supply nutrients to crops, suppress weeds, improve soil water content, and break pest cycles.34

2.6 LEGAL FACTORS

Introduction

By far the biggest challenge for Flemish companies that want to export their products to the United States of America is the US legislation. It is important to start the exporting process by looking at the most recent export data available on Access2Markets. As this import process into the U.S. highly depends on the type of product, it is not possible to create a complete flowchart that applies to all situations. However, the United States Department of Agriculture has published manuals that will help exporters during this process:

32 Consulted on (EPA, 2016)

33 Consulted on (Newburger, 'It never stops': US farmers now face extreme heatwave after floods and trade war, 2019) (EPA, 2016)

34 Consulted on (Changing Climate Is Affecting Agriculture in the U.S., n.d.)

Figure 3: Impact Extreme Weather Events

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• Fruits and Vegetables Import Requirements (FAVIR) database

• Cut flowers and greenery import manual Import Tariffs

Due to the absence of a free trade agreement, one of the main trade barriers companies have to face when entering the US market through export is import tariffs. On the website of the US government, a document titled “Harmonised Tariff Schedule of the United States (HTS)” is published. An example of this schedule can be seen in Table 5. This document can be used to determine how much import tariffs a company has to pay based on the customs code of the traded product.35

In this document, a total of three rates of duty can be seen. The numbers in column 1 give an overview of the "general" rate of duty. This rate applies to all countries the United States of America has a "Normal Trade Relation (NTR)" with. The "special" rate within column 1 displays the rate of duty for the twenty countries the Unites States of America has a free trade agreement with. Lastly, column 2 shows the rate of duty for countries the USA has a bad relationship with. This includes North Korea and any other country that is included in the "Specially Designated Nationals and Blocked Person List (SDN)”. Thus, even though Belgium does not have a free trade agreement with the USA, products from Flanders are subject to the general rate of duty.36

For the most recent data feel free to consult the following website: https://hts.usitc.gov/current

3. REQUIRED IMPORT DOCUMENTS

3.1 GENERAL IMPORT DOCUMENTS

The importation of fruit and vegetables is a complex process. To make this a success, both supplier and importer have to work closely together. The import of fruits and vegetables is overseen by the “Animal and Plant Health Inspection (APHIS)”, which is a part of the US Department of Agriculture (USDA). Besides, imported products also need to comply with the rules of the US Food and Drug Administration (FDA).37 These administrations are responsible for protecting the local ecosystem. This is done by checking whether the imported products are safe, hygienic, and accompanied by the correct labelling. To prove this, the importer needs multiple documents. The specific documents that are required highly depend on the kind of fruit or vegetable that is being imported. To find out which documents you exactly need, please consult

35 Consulted on (the United States International Trade Commission, 2020)

36 Consulted on (the United States International Trade Commission, 2020) (US Customs and Border Protection, 2019) (U.S. Department of Treasury, 2020)

37 Consulted on (Hecht, 2019) (USDA, Fruits and Vegetable Permit Information, 2019) (FDA, 2018)

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Access2Markets from the European Commission or contact Flanders Investment & Trade for more information.38

3.2 USDA REGULATIONS

In addition to the general import documents, the traded products should also comply with the regulation of the US Department of Agriculture (USDA). More specifically, APHIS, which is a part of the USDA handles all importation of fruit and vegetables.39

3.2.1 Phytosanitary Certificate

The first document that is needed to comply with the USDA regulations is a phytosanitary certificate. This certificate is a declaration of the country of origin that the traded products are healthy and not suffering from any illness.40 This document is therefore extremely important to APHIS as their main objective is to prevent new pests from spreading within their country, by ensuring the quality of the products, as well as preventing damage to the general well-being and environment. Therefore, the process of movement will be facilitated by obtaining this certificate as this ensures the quality of the involved products.41

3.2.2 Plant Permit

Depending on the type of fruit or vegetable, it might also be required by the National Plant Protection Organisation (NPPO) to obtain a plant permit, also known as PPQ form 578. This document holds an additional process to make sure that no diseases are entering the country. This form should always contain the following elements: Contact information, scientific names of the traded product, country of origin, city of destination within the US, transportation method, etc.42

3.2.3 Databases

As previously mentioned, the importation of fruits and vegetables is not an easy process. To make this procedure even more difficult, regulations may alter based on time and the type of fruit or vegetable. For example, some products may only enter the country through specific entry points, or some products don’t require specific import documents or inspection, etc. However, APHIS has set up the Fruits and Vegetables Import Requirements (FAVIR) database to simplify this process. This is a very useful database that contains all necessary information regarding regulations and import requirements.43 The USDA also provides a Cut flowers and greenery import manual.44

38 Consulted on (Hecht, 2019)

39 Consulted on (Hecht, 2019) (USDA, Fruits and Vegetable Permit Information, 2019)

40 Consulted on (De Zutter, Custom Formalities, 2019)

41 Consulted on (Hecht, 2019) (De Zutter, Custom Formalities, 2019)

42 Consulted on (Hecht, 2019)

43 Consulted on (USDA, Fruits, and Vegetables Import Requirements (FAVIR), 2020)

44 Consulted on (USDA, Cut flowers and greenery import manual, 2020)

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3.3 FDA REGULATIONS

Following, the imported products should also comply with the regulations of the Food and Drug Administration (FDA).

3.3.1 Prior Notice

First of all, fifteen days before the products arrive in the USA, a document called “prior notice” should be submitted through the online account from the website of the FDA. This allows customs officers to arrange the arrival of your products. This document should contain the following information: "country of origin, registration number, and countries where the product is denied entry”.45

3.3.2 Register in FDA System

Next, the FDA also demands that all food-related products are registered within the FDA system based on the “FDA Food Safety Modernization Act (FSMA)”.46

3.3.3 Labelling and Packaging

The required labelling and packaging are also regulated by the FDA. The regulations again depend on the type of product and used transportation method. Nevertheless, every label should always mention the country of origin. In the case that your products are labelled as "organic", you should obtain the USDA Organic Seal. This can be done with the help of a USDA certifier.47

3.4 ADDITIONAL IMPORT DOCUMENTS FOR PLANTS

The documents that are required to import plants and other plant products are very similar to the required import document for fruits and vegetables. First of all, the importer will also need the general import documents that are required for any import such as a commercial invoice, customs release form, and Bill of Lading.48

The importation of plants and plant products is also regulated by the US Department of Agriculture (USDA).

Based on the Plant Protection Act, USDA tries to safeguard the US environment from diseases entering the country. To prove that the traded products are safe, the involved parties may need to obtain one or multiple certificates and permits.49

45 Consulted on (Hecht, 2019)

46 Consulted on (Hecht, 2019)

47 Consulted on (Hecht, 2019)

48 Consulted on (Hecht, 2019)

49 Consulted on (AFC International, sd) (Animal and Plant Health Inspection Service, Importation of Plants for Planting, 2018)

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3.4.1 Certificate

It may be required to obtain the phytosanitary certificate first to facilitate the process of movement of the plants. Secondly, the importer may need to obtain one of the following permits mentioned below. However, the exact type of permit that is required depends on the imported plants. To find out which documents you exactly need, please consult Access2Markets from the European Commission or contact Flanders Investment & Trade for more information.50

3.4.2 Permits

A large number of importers will most likely need to apply for a permit to import plants or plant products, also known as PPQ 587. However, there are some exceptions. For example, when importing a total of 12 plants or less, no permit is required.51 In case an importer wants to import restricted plants for research purposes, this is possible by completing the form PPQ 588. Following, protected plants can enter the USA after you obtain a PPQ 621 permit. According to APHIS, prohibited plants include such valuable crops and natural flora, such as apples, bamboo, citrus, elms, grapes, grasses, maples, peaches, potatoes, rice, sweet potato, and sugarcane.52 There is a high possibility that these plants will carry pests and other diseases when entering the USA. Therefore, these types of plants have to be inspected in quarantine by APHIS before entering the country.53 Lastly, an importer might also need to obtain additional permits such as a permit for post-entry quarantine (PPQ 546), or a permit for “movement of live plant pests, biological control agents, or noxious weeds” (PPQ 526).54

50 Consulted on (De Zutter, Custom Formalities, 2019)

51 Consulted on (AFC International, sd) (Animal and Plant Health Inspection Service, Plant Health Permits, 2020)

52 Consulted on (Animal and Plant Health Inspection Service, Prohibited genera, 2015)

53 Consulted on (AFC International, sd) (Animal and Plant Health Inspection Service, Plant Health Permits, 2020) (Animal and Plant Health Inspection Service, Prohibited genera, 2015)

54 Consulted on (AFC International, sd) (Animal and Plant Health Inspection Service, Plant Health Permits, 2020)

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4. USEFUL ADDRESSES

4.1 PUBLIC ACTORS

U.S. Department of Agriculture

• https://www.usda.gov

• https://www.nal.usda.gov/topics/commercial-horticulture National Association of State Departments of Agriculture

• https://www.nasda.org/states/state-directory

4.2 EVENTS

The biggest event “Cultivate”, organized by AmericanHort attracts around 10,000 industry professionals and visitors from all 50 states and over 30 countries. It is an annual event organized in July in Columbus, Ohio.

More information can be found on the following link: https://www.cultivateevent.org

A full list of horticulture events in the USA can be found here: https://www.hortcalendar.com

5. OPPORTUNITIES FOR HORTICULTURE IN THE USA

Sustainable food supply is under immense pressure due to population growth, climate change, and limited resources. Besides this, new uncertainties rose because of the COVID-19 crisis, such as the disruption in the food supply chain that made prices rise significantly. As a consequence of the uncertainty in these times, opportunities within horticulture have emerged.

Urban Horticulture

Trends towards sustainability and green energy have been increasing more and more in recent years across the country. One of the upcoming trends, “urban horticulture”, boomed during the pandemic, which brings several opportunities with it. "Urban horticulture" is a viable concept to provide sufficient fresh and safe food to cities, to achieve a sustainable food supply and food security. The trend is focused on the cultivation of fruits, vegetables, mushrooms, herbs, and aromatic and ornamental plants that can grow easily in a city and its surroundings.55

55 Consulted on (Urban farming flourishes in coronavirus lockdowns, 2020)

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In the U.S., urban farms are sprouting in abandoned factories, on high-rise rooftops, and within shipping containers, adopting the “farm-anywhere” approach to bring local produce to a growing population of city- dwellers.56

Furthermore, metropolitan city budgets across the country are making room for the larger mission of bringing healthy foods to its residents. One example is the metropolitan area of Atlanta. The city is fulfilling its mission of bringing sustainable foods within half a mile of 85% of its 500,000 residents by cultivating the largest free food forest in the nation.57 These movements across the nation are causing a shift towards opportunities within this sector.

Greenhouse Horticulture

The value of the North America Greenhouse Horticulture market is expected to increase further by the end of 2023 with a compound annual growth rate (CAGR) of 11.3% during the foreseen period of 2020 to 2025.

As the demand for both local and protected crop cultivation is growing across the country, the market value is expected to increase even more throughout the next five years.58 Soon, greenhouse owners will find the need to invest time and resources toward developing innovative greenhouse technology for stimulating crop production.59

Lighting industry

The worldwide horticulture lighting industry is projected to grow to $6 billion by 2025. This is mainly due to the rising penetration of led lights in indoor farming due to their long lifespan, spectrum adjustability, and energy efficiency. Followed by the fact that fruits and vegetables are estimated to hold the largest share of the market during the forecast period.60

Technology

Not solemnly for these specific trends, but also within other subsectors of horticulture there is a need to integrate information technology tools. These tools could help in maintaining consistent product supply, as well as make agriculture more sustainable. Therefore, this market is open for new opportunities regarding new technologies with a focus on being eco-friendly and energy-saving.61

56 Consulted on (4 Trends in high-tech horticulture, n.d.)

57 Consulted on (Carly, 2021)

58 Consulted on (North America Greenhouse Horticulture Market, 2020)

59 Consulted on (Global Greenhouse Horticulture Market Size Study with COVID-19 impact, by Covering Material, by Application and Regional Forecast 2020-2027, 2021)

60 Consulted on (The Worldwide Horticulture Lighting Industry is Projected to Grow to $6 Billion by 2025, 2020)

61 Consulted on (Mumataz, et al., 2020)

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Several technology trends that are seen in the sector, with the possibility of importing/improving are:

• Artificial Intelligence (AI): While technology is making it easier to monitor things like soil conditions, water usage, and the weather, AI is making it easier to use that data to make decisions.62

• Blockchain: The supply chain is one huge area where blockchain can help the agriculture industry.63

• RFID: Radio-frequency identification (RFID) is working in tandem with blockchain to make that supply chain tracking a reality. RFID sensors can tag crops and animals alike, giving each a unique ID number.64

• Internet of things (IoT) sensors: IoT sensors are having a big impact on agriculture. Farmers can place them in their fields to monitor crops remotely, ranchers can use them to track the health of their animals, and both can place sensors on their equipment to monitor machine health and reduce downtime. IoT’s ability to warn you before that downtime happens means you can act to prevent it and keep equipment up and running.65

• Yield monitoring in fruits and nuts: The advantage of this is that growers can implement zonal vineyard management. Rather than being managed uniformly, as is now typical, individual blocks can be split into zones in which the management of both inputs to, and outputs from, the production system can be applied differentially.66

• Precision irrigation: Farmers are experimenting with this technology in the search for solutions towards saving water while still producing high-yielding crops.67

• Robotics: as availability and affordability of labor is a pain point in agriculture, robotics could make a difference here. Some companies in the US are in the piloting face of this new technology, but it is truly a cluster open for new possibilities68

• Unmanned aerial systems (UAS): Interest in the use of unmanned aerial systems (UAS) is moving from novelty to practical applications in agriculture as the Federal Aviation Administration guiding the legal use of small commercial UAS

.

69

62 Consulted on (Peasley, Anger, & Neitz, 2020)

63 Consulted on (Peasley, Anger, & Neitz, 2020)

64 Consulted on (Peasley, Anger, & Neitz, 2020)

65 Consulted on (Peasley, Anger, & Neitz, 2020)

66 Consulted on (Sulecki, 2016)

67 Consulted on (Sulecki, 2016)

68 Consulted on (Sulecki, 2016)

69 Consulted on (Sulecki, 2016)

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6. CONCLUSION

The horticultural production contributed a total of 13.8 billion US dollars to the American economy in 2019.

The states with the highest production value were California, Florida, and Oregon. As for any subsector of the agriculture industry, external factors have a big impact on the horticultural industry and are therefore heavily subsidized. These actions threaten the international position of big industrial farms. Besides of local horticultural crops being subsidized, complex administration procedure poses challenges too.

Besides these challenges, several opportunities are found as well in the sector. As the U.S. market is shifting towards organic, sustainable, and locally-sourced alternatives, the two biggest opportunities are found within "Urban Horticulture" and "Greenhouse Horticulture". Consequently, opportunities regarding new technologies and tools in these sectors and beyond are found in the USA as well.

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For more information, please contact:

Flanders Investment & Trade Atlanta Conny VAN WULPEN

Nina VANSPAUWEN Bianca VISSERS

atlanta@fitagency.com +1 404 659 96 11

Disclaimer

The information in this publication is provided for background information that should enable you to get a picture of the subject treated in this document. It is collected with the greatest care based on all data and documentation available at the moment of publication. Thus this publication was never intended to be the perfect and correct answer to your specific situation. Consequently it can never be considered a legal, financial or other specialized advice. Flanders Investment & Trade (FIT) accepts no liability for any errors, omissions or incompleteness, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organization mentioned.

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