The Indicator from Planet Money - Days Of COVID And Roses

The Covid-19 lockdown sent the flower market into free fall, but recently, flower prices have been picking up again. Who are the culprits behind this? Our old friends supply and demand, of course!

  • Play Speed:
Content Keywords: Valentine's Day Valentine's Day Valentine's Day
00:00:00
NPR

00:00:11
attention podcast listeners, this is your official reminder that Sunday is Valentine's Day. You have been warned.

00:00:21
What's the where is this going conversation? And of course of the impossible restaurant reservation, at least that is a normal Valentine's Day Valentine's Day is a very different kind of day in art, you know, covid-19 World home type stuff, which is nice, but this is a pretty bad news for a lot of different kinds of businesses restaurants. They make a ton of money on Valentine's Day chocolate makers of course and flowers the florist. Yes Valentine's Day is a huge day for florist often a significant chunk of revenue for the whole year will come from Valentine's Day alone, and it's not just in the US all over the world Valentine's Day is a huge date for the multibillion-dollar flower business.

00:01:21
But just in general this is been a really hard year for flowers at because typically a lot of the floral business goes to hotels things like corporate lobbies weddings big events. And those haven't really been happening for the last year and covid has kind of crushed the flower business, but there are some little green shoots starting to pop. Yes, there are the indicator from Planet Money. I'm Alexi Horowitz Ghazi lumenomics what has happened to the flower industry during covid-19.

00:02:10
This message comes from NPR sponsor interactive brokers interactive brokers offers fractional shares on more US Stocks ETFs and a dr's than any other broker build a balanced portfolio with fractional shares. Learn more at ibkr.com fractions. This message comes from NPR sponsor Capital One offering Capital One shopping at downloadable browser extension, and that searches various sites for Shoppers. What's in your wallet more at Capital One Shopping. Com.

00:02:41
The Cut Flower business is worth about eight and a half billion dollars and it is truly a global business giant clearinghouses, which of these daily auction and the chip billions and billions of flowers all over the world is also in ancient trade there was an international tulip bubble that started in Holland in the 1600 this one kind of two up cost the same price as a house and every day, my name is Michelle maleski and lime spokesman for a lawyer flow album Royal Flora Holland is one of the biggest clearinghouses for flowers in the world is located just outside of Amsterdam and it was started a hundred years ago by some Dutch flower farmers who wanted a way to standardize prices, but it's now almost unimaginably huge.

00:03:41
12 billion flowers a year at least 35 million flowers everyday and most of them come from Europe and Africa, they're flown in Daily auctioned off and then immediately packed into these giant refrigerated trucks and chips all over Europe. At least that was how it used to be. Michelle says that there was some concern about the virus and some sales were starting to be affected but then border started closing and flight start getting cancelled. Michelle says everything kind of came to a head on one day in particular worst day of the year. Michelle says kind of all at once buyers just vanished hotels weddings, wholesalers everyone canceled their orders and the whole flower industry basically collapsed on that one day. The farmers were still growing their flowers and shipping them to Royal Flora Holland and on March 16th Royal Flora Holland found itself in this situation.

00:04:41
Russian word had all of these shipments of daisies and roses and tulips and chrysanthemums and lilies and geraniums and pansies from all over the world that have been flown in it. Just sitting there unsold never happened before and they just didn't know what to do with all these flowers. So Michelle and his team gathered them all up and made a huge pile in the giant deserted parking lot of football fields worth of flowers and try to figure out what they were going to do how to get rid of them to destroy flowers in millions of flowers like around 50 million flowers and just pour them into these dumpsters that were the size of shipping containers and Michelle and his colleagues watch this happen it just stood there in the parking lot watching all the labor.

00:05:41
Care of their thousands of Growers just get trashed the scene because it was really romantic and it wasn't just emotional. It was also an economic disaster flower prices went into free-fall. No demand to supply and Royal Flora Holland went into damage control the immediately told they're 4,000 Growers that they would only accept about a third of their flowers which Let The Growers with most of their flower crops to rot along with all the money that they had spent on labor and fertilizer and seeds. Michelle says this was devastating and it was especially hard on their growers in Africa who did not get the multimillion-dollar government bailouts that they're Dutch Growers did fewer flower Growers growing fewer flowers, and also the global flower supply chain. All hamstrung as well. Usually flowers are shipped in the cargo hold.

00:06:41
Passenger planes and there are way few are flights right now, which meant less room for flowers couldn't make it work. But then over the summer the prices started to rise in the prices are going up. That's so surprising supply and demand, of course back to that on the supply side. Of course, if you were flowers was really bad at first, but Michelle says it's started to come back and that demand was coming from a few places first house plants. Everyone was at home buying house plants.

00:07:26
Who was working in the garden and also bouquets Global demand for bouquets has gone up because people cannot visit each other as much as they used to so now instead of showing up people are buying flowers for loved ones to celebrate birthdays weddings new babies also illness sympathy things like that. The lower Supply and increased demand has pushed prices up recently. Michelle said flower prices are like 40% higher than they were before covid-19 and now Valentine's Day one of the biggest days for florist all over the world. Michelle says demand for bouquets has been especially high this year. Why is there

00:08:04
How much more Demand right now we have to be out of the streets at 9 in the evening. If you cannot go to the restaurant because of go to whip up. So people make it nice and cozy place for flowers. Maybe this Valentine's Day than they been on a normal one brother distance. Michelle says roses now cost around 35 or 40 cents a step. But that's wholesale. Once you factor an overhead Transportation labor. The Costco tire and US roses are typically a little bit more expensive. I called around to Lexie just to see like what the Valentine's Day bouquet would set you back here in New York.

00:08:52
We called a few places and the price is varied a lot.

00:08:57
How much is a does just like at the regular Dozen Roses like the classic the most expensive Dozen Roses? We found $129 included an outlier. Most of the prices were a little bit lower $75 long stem red roses last year. They get pumped up a little bit down on paint supply and demand and snow and all that stuff sucks dozen long stem American beauties.

00:09:39
This episode of the indicator was produced by Jamila Huxtable and fact-checked by Sam's by the indicator is edited by Patty Hirsch and is production of NPR.
Translate the current page