NAHSA meeting upbeat

Taking a moment to catch my breath before my next flight, I was reflecting on comments made during last week's meeting of the North American Horticultural Suppliers Association, otherwise known as NAHSA. This group of manufacturers and distributors is always a delight to interact with and, as usual, I ended up learning a great deal from networking with the group and the other invited speakers. Here are a few tidbits from the meeting:

1. Our economy will recover (because it always has) and because Americans work harder than any other developed country in the world.
   
   
2. "It ain't what we know that hurts us; it's what we know that ain't so!"
   
   
3. Humans have a special bond with plants (and animals) that speaks well for the future of our industry.
   
   
4. Over the next six years, the largest transfer of wealth in history will take place as the Great Depression generation will be leaving (literally) a HUGE sum of retirement savings and assets. They were focused on the lowest rung of Maslow's hierarchy of needs -- that is, survival -- and they spend considerable less than other demographic segments. As this transfer of wealth takes place, subsequent generations that are more oriented towards Maslow's higher order of needs (self esteem / self actualization -- often referred to as "dream space") will be depending on our industry to fulfill those needs (see #3 above). "We own the dream space!"
   
   
5. Weather influences us as much -- and sometimes more -- than the economy does, in the short run. For the past 12 years, the correlation between U.S. same-store sales and national temperatures was 81.9 percent. Weather variability has an impact on economic activity in every state (GSP) and in every sector. Aggregated over all sectors and states using 70 years of historical weather data, this is estimated to be approximately 3.6 percent of annual GDP, or $260 billion (in 2000 dollars). Agriculture — which has been the sector most studied for weather impacts on specific production for specific crops — is less able to undertake temporal or geographic substitution within a year and thus is one of the most sensitive sectors at 12.1% sensitivity.
   
   
6. Downturns always create opportunities. Invest in stocks related to pharmaceuticals, energy, banking (yes, banking), construction equipment (Caterpillar), and delivery services (FedEx).
   
   
7. You can create, buy, and change in troughs better than at peaks. It's all about your value proposition -- why should you buy from me? Shout your differentiation from the rooftop!
   
   
8. The long-term credit market is loosening up, albeit slowly. The Fed is expected to hold the fed funds rate in its current 0 to 1/4% range for the next year.
   
   
9. "It is always the adventurers who do great things, not the sovereigns of great empires." Charles de Montesquieu
   
   
10. Fear keeps us average.
    

See what I mean about it being a great meeting! If you missed it, you really missed a good one. Here's a silver lining though -- you can listen to my recorded sessions by clicking here. Wish you could have heard the other guys though!

New IPM blog available

The East Texas Nursery and Nursery Greenhouse IPM Program has recently added another method to distribute information -- the "East Texas Nursery and Greenhouse IPM Program Blog" at http://etipm.blogspot.com/. This site will have regular updates regarding advances in greenhouse and nursery pest management, meeting information, efficacy study results and newsletters. If you would like to have updates emailed directly to you the day they are posted, go to http://etipm.blogspot.com/ and simply enter your email address.

Gas vs. Education: Which is the better deal?

It has often been touted that education is the key to economic development. Perhaps, one caveat should be added: quality education is the key to economic development.

The American Legislative Exchange Council (ALEC) released its 14th edition of the Report Card on American Education: A State-by-State Analysis, which covers the school years 1985-1986 thru 2006-2007. This comprehensive guide ranks the educational performance of the school systems in the states and the District of Columbia with Minnesota placing first and the District of Columbia last. Findings include:

Based on a variety of indicators, ALEC's 2007 Report Card has found no direct correlation between conventional measures of education inputs, such as expenditures per pupil and teacher salaries, and educational outputs, such as average scores on standardized tests. For instance, class sizes today are 15% smaller than they were 20 years ago, yet of the 10 states that experienced the greatest decreases, only one(Vermont) is found among the highest performing states in the rankings.

Even with dramatic increases in the amount of educational resources spent on primary and secondary education over the past 2 decades--expenditures have risen nationally to an all-time high of $9,295 per pupil--student performance has improved only slightly; 69% of American eighth-graders are still performing below proficiency in math and 71% in reading, according to the 2007 National Assessment of Education Progress.

The latest results of comparison among participating nations of the OECD peg American students’ achievement levels in science below dozens of other countries including Croatia, Latvia, and mainland China. In fact, the United States scores below the combined average of all countries observed.

Comment: Based on data in the report from Table 1.6, real Per Pupil Expenditures for public elementary and secondary schools have increased from $6051 in 1985-86 to $9295 in 2005-2006, a 53.61% increase (see graph above). Over the same period, real inflation-adjusted gas prices rose by only 10.9% according to EIA data, from $2.24 per gallon in January 1986 to $2.484 per gallon in January 2006 (the mid-point in the school year). Even adding two more years of real gas price increases and using the January 2008 price of $3.059, real gas prices have only increased by 36.6% since January 1986, far below the 53.6% increase in real public school spending from 1985-86 to 2005-06.

And the quality of gasoline has stayed the same over the last 20 years, which is not necessarily the case with public schools. In fact, the graphs below show that increases in spending have either no effect on test scores (top graph below, taken from the report) or a negative effect on test scores (bottom chart below).