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FLORISTS 



COSTS SHOW HOW 



PROFITS SHRINK 



Changed vond'it'wns have cut profits in all hranchea of the florists' in- 

 dxistry. How they have affected the rose growers in particular is shown by 

 the figures of production costs in a well known middle western range for the 

 years 1920 and 19:11, which are presented on this page. 







HAT growers' receipts un- 



Tderwent a shrinkage in the 

 year 1921 as compared 

 with 1920 has already been 

 a matter of considerable 

 comment, although the pre- 

 cise extent of the decrease 

 has not been easy to ascer- 

 tain. The Review is able 

 to present here, however, 

 exact statistics that show the returns 

 in the two years of one of the leading 

 rose-growing establishments that con- 

 tribute to the Chicago market. It might 

 be said, in the way of introduction, that 

 this grower operates a range of glass 

 the area of which runs into six figures 

 and which has been supplying the Chi- 

 <!ago market for considerably more than 

 a decade. The roses grown here con- 

 form to a high standard of quality, and 

 the cut grades high. The output was 

 handled through the same commission 

 house during the two years, the one 

 which has sold this 

 grower 's cut for sev- 

 eral years. The roses 

 grown are the leading 

 varieties at present. It 

 need not be said that 

 the range is under ex- 

 i-eedingly able manage- 

 ment; figures cited will 

 show that. 



greater shrinkage. It is especially im- 

 portant to note, also, that careful 

 management was necessary in order to 

 keep the profit in 1921 as much as it 

 was. Keductions in the prices of the 

 various items which go into the cost of 

 rose production were not many. At this 

 particular range, the salaries and pay 

 roll of 1921 remained approximately the 

 same as in 1920. Fuel cost 116 per cent 

 of the 1920 outlay. Boxes for shipping 

 cost 125 per cent of the 1920 figures. 

 Reduction in the cost of fertilizers, of 

 course, is partly responsible for the de- 

 crease of this item to seventy-one per 

 cent of the amount spent in 1920. In- 

 secticides cost sixty-four per cent of 

 the expenditure in 1920. Miscellaneous 

 expense was held down to seventy-five 

 per cent. 



One-third Plant Replacement. 



Fortunately, new plants were not pur- 

 cliased nearly to the extent that they 



Increased Cut. 



It has been occasion- 

 ally stated that al- 

 though roses in 1921 

 brought less than in 

 1920, the increased cut 

 made up for the dimin- 

 ished returns. It need 

 liardly be stated, how- 

 <'ver, that the increased 

 number of blooms cut 

 "■an only make up for a 

 slight decrease in mon- 

 •'tary returns. This is 

 indicated by the figures 

 compiled by the grower 

 mentioned, whose cut 

 in 1921 was 108 per 

 ••ent of that in 1920. 

 Rut the flowers last 

 year brought, in dol- 

 lars and cents, only 

 •'iglity-thrco per cent of 

 wliat was secured for 

 them in 1920. It is 

 easy to see, therefore, 

 that had the cut of 

 blooms in the two years 

 been the same, the 

 grower's profits would 

 have snffered a still 



R 



ose 



Grower's Production Costs 

 In Last Two Years 



Cost per plant 



1920 



Commission $0.0656 



Salary 155 



Pay roll J537 



Fuel 231 



Fertilizer 0226 



Boxes and paper 008 



Insecticides 0052 



Rose plants : 053 



Insurance 0033 



Express 0123 



Advertising 0063 



Taxes 044 



Depreciation 076 



Repairs 1108 



Tools • 



Lumber 



Miscellaneous 037 



Total 1.1838 



Receipts per plant 1.3715 



Profit per plant 1877 



1921 

 $0,047 

 164 

 358 

 27 

 .0161 

 0104 

 .0033 

 .0204 

 .004 

 .0124 

 0062 

 .0157 

 .076 

 .046 



.0206 



1.0701 

 1.14 

 .0699 



1920 



4.8 

 11.3 

 25. 

 17. 



1.6 

 .6 

 .3 



3.8 

 25 

 .9 

 .5 



32 



4.5 



6.8 

 25 



1.9 



2. 



were in J921. Only thirty-eight per 

 cent, or approximately one-third of the 

 expense for this item in 1920, is found 

 on the books in 1921. By referring to^ 

 the table on cost per plant and multiply- 

 ing by three the amount opposite plants 

 for the year 1921, one sees what would 

 have happened to the profits had the 

 same number of plants been changed in 

 1921 as had been the ease, fortunately, 

 in a, year of good profits. 



The total expense in the year 1920 was 

 only ninety-four per cent of that in 1921. 

 This reduction may be saia to be due to 

 the economy of the management, which 

 saw clearly the trend of the times and 

 made efforts to meet conditions, in order 

 that the year might not show a loss 

 when the books were footed up. The 

 year 1921 shows a cost of production 

 of 92.17 per cent of the total receipts 

 for the year as against 84.7 per cent 

 for the year 1920. In other words, n 

 profit of more than fifteen per cent in 

 1920 had shrunk to a 

 profit of slightly more 

 than seven per cent in 

 1921, a reduction of 

 more than half. If this 

 occurred in an estab 

 lishment showing a« 

 able management as 

 does this one, what is 

 likely to have occurred 

 in places not so well di- 

 rected f 



Percentage of 

 Gross Receipts 



1921 



4. 

 14.4 

 31.4 

 23.6 

 1.3 

 1. 

 3 

 2. 

 3 

 1.1 

 .55 

 1.4 

 5.4 

 4. 

 .1 

 .06 

 1.8 



84.7 92.71 



Net Profit. 



Moreover, when one 

 estimates the total in 

 vestment in a range of 

 this kind and compares 

 the return on that in- 

 vestment in accordance- 

 with the figures just 

 cited, it is evident that 

 last year not five per 

 cent was realized. In 

 other words, the own- 

 ers might have invested' 

 their money in gilt- 

 edged securities which 

 would have paid them 

 more, without any of 

 the hazards involved in 

 the operation of :i- 

 greenhouse establish- 

 ment. 



Only an excellent 

 year like 1920 is able- 

 to maintain the profits 

 of tho grower at ft 

 point where the annual 

 income may be said to 

 be profitable. A good 

 many proprietors of re- 



