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Oak Disease Threatens Profits of State's Nurseries

Wholesalers could lose $100 million in sales because of bans on California plants. They say states are overreacting.

March 23, 2004|Jerry Hirsch | Times Staff Writer

It's shaping up to be a dreary spring for California's nursery industry.

Since the discovery this month of a fatal oak disease at two commercial nurseries, six states have banned all or some shipments of California-grown plants. That, experts say, could cost wholesale gardeners in the state $100 million in lost sales this season.

What's worse, the bans were imposed at the start of the critical spring planting season -- when many nursery owners chalk up as much as two-thirds of annual sales -- and forced the recall of dozens of delivery trucks.

"This could not have come at a worse time," said Dennis Conner, vice president and general manager of Monrovia Nursery Co. in Azusa, one of the two nurseries where state inspectors found the sudden oak death pathogen on camellia plants.

Cultivating nursery plants is a $2.35-billion business in California, with plants trailing only dairy products and grapes in commodity value. The state is the nation's largest provider of nursery crops and one of the few sources of mature spring bedding plants for the Midwest and Northeast.

Almost 80% of the plants grown in California are sold in-state. Nonetheless, if the bans continue into April and May, "we are going to lose a lot of money," said Conner, whose privately held business sells about $90 million worth of plants each year, according to Dun & Bradstreet Inc.

The problem, said Dave Fujino of Irvine-based commercial grower Hines Horticulture Inc., is that sales lost now can't be recouped later, even if the bans are lifted in short order. It will soon be just too hot in much of the U.S. for people to spend time gardening.

"Spring is the main event," Fujino said.

Florida, the No. 2 producer of nursery stock, has taken the most severe approach, banning all California plants last week.

"Florida is quarantining everything, and research shows that everything doesn't get this fungus," said Steve Lyle, spokesman for the California Department of Food and Agriculture.

Florida officials are concerned about "the potential impact" of the disease if it were to crop up there, said Florida Department of Agriculture and Consumer Services Commissioner Charles H. Bronson.

For their part, Georgia, Delaware, Mississippi, Utah and Tennessee have banned plants associated with the disease, which include camellias, rhododendrons and some 40 other species. And Louisiana, West Virginia and Washington are expected to institute similar bans this week, according to industry sources.

"We had three trucks on the road in Arizona and Texas, and we had to turn them around when Georgia said it wouldn't let the material in," said Fujino, who figures his company lost about $20,000 a truck. Sudden oak death is found in forests and has killed tens of thousands of wild-growing oaks and tanoaks in 12 central and northern California counties.

In other plants, the disease causes leaf spotting and twig infections but isn't fatal.

Although it has cropped up in Northern California nurseries previously, the most recent discovery was alarming because of how far south it was found, said Katie Palmieri of the California Oak Mortality Task Force. When it appears outside of a forest, the pathogen is probably being spread through the wholesale market as plants are bought and sold, she said.

The disease was first spotted in 1995 on tanoaks in a Marin County forest, but it took University of California researchers five years to figure out what the pathogen was. By 2001, the U.S. Department of Agriculture initiated a federal quarantine of 12 California counties and one in Oregon, mandating the inspection and certification of all the nursery stock of the host plant species by local agricultural officials.

This month, the California Department of Food and Agriculture launched a statewide survey to determine whether the pathogen was present in nurseries throughout the state. That's when inspectors found evidence of the disease on camellias grown at Monrovia Nursery and at Specialty Plants Inc. in San Marcos. Inspectors are also studying potential contagions at 11 other California nurseries.

Industry officials say the bans by Florida and the other states amount to overkill.

"These state actions are unprecedented," said Don Dillon, chairman of the Sacramento-based California Assn. of Nurseries & Garden Centers. Dillon contends that the guidelines for the federal quarantine provide for interstate protections and should preempt the states' actions.

For example, infected plants found at a nursery are destroyed. The state then retests the nursery until it is certified to be free of the pathogen. California growers are "jumping through a lot of hoops" to comply with the federal quarantine and catch any diseased plants, Dillon said.

The association is calling on the USDA to conduct a nationwide survey to see whether the pathogen is afflicting plants in other states. "We are not so sure that this couldn't be found elsewhere too," Dillon said.

USDA officials who oversee the quarantine were unavailable for comment Monday.

The ban of California nursery products is starting to snowball, said Lyle of the state agriculture department. Even in states that haven't taken any action, retailers are starting to cancel, Dillon said.

Last week, Hines Horticulture voluntarily suspended shipments of plants from its California farms that could be hosts for the disease, even though none of its plants had tested positive for the pathogen.

Hines, one of the few publicly traded nursery companies, said it had nine facilities in other states that would offset the financial effect of the California ban. Still, it spooked Wall Street: Hines' Nasdaq-traded shares closed Monday at $4.46, down 5 cents for the day and 12.5% from a recent high of $5.10.

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