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California Cut Flower Growers Build Cooperative Logistics System to Cut Costs

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A cooperative transportation system for California’s cut flowers is being developed to help California's cut flower agriculture sector compete in the global marketplace.

Cut Flower Agriculture in California

Cut flowers are big business in California, with an annual revenues of nearly $10.3 billion, according to a study released in 2009 by CSU Sacramento.

Cooperative Logistics for Efficiency

Efficiency will be enhanced by reducing the number of trucks on the road and by filling trucks to capacity. Tom French has been hired by the California Cut Flower Commission to develop a new, more competitive logistics model. The solution being planned is a centralized distribution hub that could be located in Oxnard, centrally located between point between Los Angeles and Salinas. The California Cut Flower Commission represents 275 cut flower growers in California is enhancing their business model to look at transportation as a significant competitive strategy.

California Agriculture Logistics Hub Funding

Federal support for the growers is expected from new farm legislation as they work to build a new distribution system on California's Central Coast that will help level the playing field in a cost effective and environmentally sound way.

The commission was awarded a $95,000 block grant by the California Department of Food and Agriculture to establish a new transportation model for cut-flower growers.

Multiple Benefits for Cooperative Logistics

California cut flower growers say they have been at a competitive disadvantage for two decades as Latin American countries enjoyed duty-free access to the United States. Countries such as Colombia have replaced California cut flower supplies and now supply 75 to 80% of all cut flowers sold in the United States. The 1991 Andean Trade Preference Act — with the nations of Bolivia, Colombia, Ecuador and Peru, offering them duty-free access to the domestic market in exchange for assistance in combating drug trafficking. It was meant to be an incentive for Andean farmers to pursue alternatives to the drug trade.

U.S. growers find themselves at a competitive disadvantage, saddled with higher costs for land, labor and environmental regulations.

Despite implementing new horticultural science and growing new varieties of flowers, California growers continue to lose market share.

California Logistics Strategy

With full membership participation, the California Cut Flower Commission members hope to carve between 30 and 40 percent savings out of statewide cut flower transportation. Getting all the growers to agree to consolidate transportation will drive cost saving efficiencies.

The Sun Valley Group is one of the largest cut flower growers in the country, with operations in Oxnard and Arcata. Vince Thomas, director of sales, logistics and distribution, sees coordination of transportation as essential to competitiveness and could open opportunities up for the entire industry.

Cut flowers were Ventura County's eighth largest crop in 2008, with 974 acres dedicated to various varieties such as statice, lace, aster, chyrsanthemums and sun flowers.

Cut flower growers representing districts around California are crafting a cooperative plan for growers to increase efficiencies, according to Kasey Cronquist, executive director of the statewide California Cut Flower Commission.

Read more at the Ventura County Star: http://www.vcstar.com/news/2009/oct/15/creating-hub-for-cut-flowers-moves-forward/



Edited by Carolyn Allen, owner/editor of California Green Solutions
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