Everyone that has been following the news has inevitably heard about the sharply rising energy prices. The flower industry will be affected by this as well. With the prices of flowers already quite high, floriculture professionals are starting to get worried consumers might pass their local flower shop this winter, and growers will end up in financial trouble.
Crisis Team Because of High Energy Prices
The Greenhouse Horticulture sector in the Netherlands will put together a crisis team because of the rising energy prices. The sector is afraid that companies will go bankrupt this winter. "Due to the high gas and electricity prices and the also rising oil price, companies in various sectors are in trouble, including greenhouse horticulture," the association writes in a press release
The newly formed Crisis Team Greenhouse Horticulture, who came together to discuss these high energy prices for the first time on October 6th, is initially concerned about the growers. For the time being, the effects are less visible in other segments of the horticultural chain. "Current developments have all the makings of a broader crisis for the sector. For many growers, the current situation is already emphatically a crisis," says Adri Bom-Lemstra, chairman of Greenhouse Horticulture Netherlands.
Horticultural Consultation Team
The meeting of the Horticultural Consultation Team was an initiative of Greenhouse Horticulture Netherlands and Greenports Netherlands and was brought to life to identify the extent of the problems caused by the high energy prices and aims to work toward possible solutions within the various segments of the horticultural chain (auction, trading companies, growers, wholesalers, banks, etc.). It was soon concluded that it is mainly the producers of flowers, plants, and vegetables in the greenhouse horticulture that are hit hardest by the enormous price increase for gas and also electricity.
The sector organization Greenhouse Horticulture Netherlands calls it an energy crisis and out of fear that glasshouse horticulture companies may collapse this winter because of the high energy prices. That is why it has set up a crisis team. This will monitor the impact of the high prices and the ways in which action can be taken against it.
Entrepreneurs in greenhouse horticulture use natural gas to heat their greenhouses. They buy it from their energy supplier. That is slightly different than in the consumer market, explains Rien Bot. He is director of energy collective Agro Energy
, which has many horticulturists as customers.
More Money For Energy
“As a consumer, you agree on a price for all the volume of energy you purchase. Just like with mortgage interest, horticulturists can choose how long they fix the price. They can do this twice a day, for a day, a month, a quarterly, or even annually. When our large growers buy in term as well as on the daily price.”
Last year the daily price for natural gas dropped to an extremely low price level of 5 cents per cubic meter, according to Bot. Many growers then chose to keep the daily price; after all, the fixed price was higher, around 15 cents. That now means that they spend a lot more money on energy because electricity and oil prices are also rising.
Long-Term Effects of High Energy Prices
It is still difficult to predict what the long-term effects will be. "The time factor is essential here. If prices stay at this high level for another three months or rise further, many more companies will be in trouble. Not just cultivation companies," is what the chairman of Greenhouse Horticulture Netherlands expects. "Energy prices largely determine the cost price for a horticultural entrepreneur, but also for companies in other sectors. Therein lies the danger that a crisis situation will arise for many more entrepreneurs in the chain. We will therefore continue to engage in intensive discussions with the chain partners."