Sidling sideways & hopes for straightening the Strait

State of the Industry keynote tackles tough topics at Cultivate‘26

Once again, the place to be the morning of Monday, July 13 in Columbus, Ohio, was the State of the Industry keynote session at AmericanHort’s annual Cultivate. A standing-room-only crowd was introduced to the organization’s new president and CEO, received updates from Washington, D.C., and learned what was happening within the green industry’s financials.

In the Spirt of Ubuntu

Lionel van der Walt became the new president and CEO of AmericanHort in May 2026. His career is defined by a global perspective, having lived and worked in South Africa, Spain, the UK and the U.S.

His parents and brother manage a fourth-generation farming operation in South Africa. “My calling has always been long-term, mission-driven stewardship,” van der Walt said.

He noted that the horticulture industry is “the great hidden champion of the American economy,” with its $520 billion impact.

“It is critical green infrastructure … and it directly impacts the private lives of American citizens,” he said, noting the biophilic benefits of plants everywhere. (Biophilic design seeks to increase people’s connectivity to nature and nature-like design to improve their health and wellbeing.)

“We are an interconnected ecosystem,” van der Walt added. He introduced the room to a concept from his homeland to drive the point home. Ubuntu is part of value systems that emphasize the interconnectedness of individuals with their surrounding societal and physical worlds. In the Xhosa language, it means “I am because we are.”

“Independent success is dependent on community,” van der Walt said.

And that community is still dependent on the people that make things happen. Van der Walt noted that while artificial intelligence and automation can help horticulture, they can’t replace its growers. One his goals as AmericanHort’s new head is to better understand and learn how to better use these digital tools.

Farm Bill & Farm Labor

Vice President of Advocacy & Government Affairs Matt Mika had big news: “This is the most horticulture/specialty crop Farm Bill ever,” he said.

The bill features “big wins” for horticulture, which Mika said include disaster recovery assistance, research funding, risk tools and financing support for growers. Of special note was Rep. Adam Gray’s (D-CA) amendment which protects the Specialty Crop Block Grant Program.

Additionally, AmericanHort has secured an ornamental horticulture seat on the new Specialty Crop Advisory Committee, making sure those voices are better heard.

Over the past year, AmericanHort has had more than 65 meetings in D.C. with members of Congress, the White House, the U.S. Trade Representative and USDA regarding tariffs, which are a continuing concern for farmers everywhere.

One of the biggest Capital Beltway bombshells is meaningful H-2A reform. House Ag Committee Chair G.T. Thompson’s (R-PA) H.R. 9535, the “Securing Agriculture’s Workforce Act,” aims to open the program to year-round growers; temporary workers could now cover 350 days.

Other changes would include multi-year labor and housing certifications being valid for up to three years. Associations, co-ops and joint employers could be expressly recognized as filers. An expanded definition would include horticulture landscape installation. Adverse Effect Wage Rate (AEWR) increases would be capped; wages would be locked during contract periods. And a single online H-2A platform would centralize filings, amendments and approvals.

“We support this bill,” Mika stated. He urged growers to talk to their elected officials to demonstrate their support as well.

Still Up, But Moving Sideways

The ever-popular economic update from Dr. Charlie Hall, AmericanHort’s chief economist, wasn’t quite as sunshine-and-rainbows as it has been the past few years. Hall said the theme for 2026 was “Moving Sideways.”

For those in the green industry, gross sales are still mostly up year-over-year, with about 60% of growers reporting gross sales up more than 25% vs. pre-pandemic (2019) in every survey.

However, for the first half of 2026, 81% of survey respondents said they were up – but only by 0% to 5%. The silver lining is that while year-over-year sales growth has decelerated, the pandemic lift has held. And that was after the beginning of this year was especially challenging due to weather issues and tariffs cutting into potential profits.

“The consumer is back in 2026, with 104 garden centers reporting they were up 5.3% year-to-date – the strongest mid-year in five years,” Hall reported. The average sale is up 3.6% but transactions are only up 1.7%. Bigger tickets are beating less traffic.

A question that (unfortunately) has come up every year since 2020 is if the American economy is going to slow drastically. “If you want to know if we’re going to see a recession – a global recession – it depends if the Strait gets straightened out,” Hall replied, referencing the Strait of Hormuz and its trade issues. The closure of the strait caused by Iranian blockades has become a major focus during the Trump-induced 2026 Iran War.

The recession risk is low but not zero, Hall said. “It feels like we’re treading water – there’s no momentum.”

The problem is people have money, but they’re spooked. Hall said consumer demand, input costs and labor are “flashing red” – the caution is real, but it’s not yet an economic contraction. But new home construction is cautious too; the action now is homeowners reinvesting where they are.

The demand for the green industry is intact. The squeeze for those in it is in the margins, not the sales. Consumer spending has equaled $63.8 billion on plants, but near-record input costs against cheap big box store “deals” lead to margin-compression territory.

With Hall’s presentation covering the first two quarters of each calendar year, he talked about what’s moved since Q1 of 2026: H-2A labor costs are lower (thanks to new Occupational Employment & Wage Statistics-based AEWRs cutting the benchmark); fuel/diesel prices are easing from their peaks in May; and fertilizer’s spring spike is unwinding, but the 2027 cost risk remains.

Freight costs are up, as tariffs continue to be. The most elevated risk is for energy, as the Strait of Hormuz premium is not yet fully cleared. Hall is estimating a 3.6% cost increase for the rest of 2026 – which is a positive, as his estimate was +5.2% in March.

So how can growers and garden centers respond to these issues? Hall outlined the following:

1. Track your trade-area analytics. Performance is mixed and regional – your market is not the national number. Track customer counts and average sale in your trade area over time. Decide from your own data, not headlines.
2. Close the margin gap. Pricing discipline and product mix are the biggest levers you control.
3. Price to your value, not your cost. Your floor is your total cost; your ceiling is your customers’ willingness to pay.
4. Manage your working capital.
5. Defend your value proposition. Consumers have traded down – lean into value ($10 – $15) winners. Natives, innovation and experience are where the growth is.

The big takeaway is “Protect the brand and the relationship, not just the transaction.”

by Courtney Llewellyn