The supply chain behind your Valentine’s Day bouquet

Summary

Marketplace Morning Report: The Supply Chain Behind Your Valentine’s Day Bouquet

Release Date: February 12, 2025

In this episode of Marketplace Morning Report, host David Brancaccio delves into several pressing economic and business topics, ranging from the latest inflation data to the intricate supply chains that deliver your Valentine's Day flowers. Below is a comprehensive summary capturing the key discussions, insights, and conclusions from the episode.

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1. Inflation Trends: A Slight Upswing

Consumer Price Index Reveals Modest Increase

The episode opens with David Brancaccio discussing the latest Consumer Price Index (CPI) report. For January, the CPI rose by half a percent, culminating in a 3% increase over the past year. While not drastically high, this uptick was slightly above expectations.

Expert Analysis with Jeffrey Cleveland

Jeffrey Cleveland, Chief Economist at Paden and Regal in Los Angeles, provides a deeper analysis:

• Stalled Progress on Inflation: Cleveland mentions, “We wanted to see more progress on inflation...that's at 3.3% right now. So the progress is really stalled” (01:07).

• Shelter Costs as a Major Contributor: He highlights that shelter costs significantly impacted the monthly inflation increase, attributing part of the rise to typical January fluctuations: “There’s been some talk of that the last couple of years. We’ve seen hot inflation readings in January” (01:07).

• Implications for Policymakers: Cleveland expresses disappointment for both consumers and policymakers, stating, “...before they make their next interest rate move” (01:07).

Discussion on Supply-Side Factors

Brancaccio and Cleveland further discuss how rising costs in sectors like motor vehicle insurance, used cars, medical care, airline fares, and rents make battling inflation challenging: “It’s hard to battle inflation when that’s happening and rents as well” (00:54).

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2. US Foreign Aid and Its Impact on American Farmers

USAID’s Role in Supporting US Agriculture

Transitioning from inflation, Brancaccio sheds light on the relationship between US foreign aid and American farmers. According to archived USAID data, over a million metric tons of food were purchased from US producers in fiscal year 2023, a vital market for growers like John Boyd from Boydon, Virginia.

Spotlight on John Boyd and the National Black Farmers Association

John Boyd, a fourth-generation farmer and head of the National Black Farmers Association, shares his concerns:

• Dependence on Steady Markets: “We put in the ground between 75,000 to $100,000 just in seed. We put it in the ground and I don't know if I'm going to get it back” (02:51).

• Financial Strain: With soybean prices around $9 a bushel—below his break-even point of $11 (03:14)—Boyd emphasizes the unpredictability caused by policy shifts, particularly the Trump administration's attempts to freeze foreign aid.

Industry Perspectives

Virginia Houston from the American Soybean Association echoes these concerns:

• Future Purchases Uncertain: “It’s our understanding that USAID...future purchases are on hold” (03:25).

• Call for Program Continuation: Houston advocates for the continuation of programs like Food for Peace to ensure stability for farmers (03:33).

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3. Dr. Bronner’s and the B Corp Movement

Dr. Bronner’s Exit from B Corp Status

In a surprising move, soap company Dr. Bronner’s announced it would no longer be a B Corporation, citing that the current standards are insufficiently rigorous.

Expert Insight with Sun Tae Kim

Sun Tae Kim, a professor at Johns Hopkins University, explains the internal divisions within the B Corp community:

• High Standards vs. Broad Inclusion: “If you just focus on the highest standards, you become a smaller movement which doesn’t really have any impact on the mainstream economy” (05:17). Conversely, expanding the definition risks the certification becoming a tool for greenwashing: “Without authenticity, you become co-opted” (05:21).

• Impact on Multinationals: Dr. Bronner’s CEO, David Bronner, argues that the B Corp movement has been co-opted by multinationals without enforcing stringent supply chain cleanups (05:38).

B Lab’s Response

B Lab, the nonprofit governing B Corps, declined an interview but indicated it is working on more holistic requirements for future certifications (05:48).

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4. The Global Supply Chain of Valentine’s Day Flowers

Surge in Flower Imports Ahead of Valentine’s Day

With Valentine’s Day fast approaching, the flower industry is experiencing a significant influx of imported blooms, primarily from South America. Over 80% of flowers sold in the US are imported, making it a $2 billion industry.

Inside Jet Fresh Flower Importers

Michael Black of Jet Fresh Flower Importers in Miami describes the chaotic yet organized environment:

• High Stakes for Valentine's Day: “Valentine is bigger dollars, bigger dollars” (07:18). Despite Mother's Day having higher volume, Valentine's Day drives greater revenue (06:34).

Focus on Roses: A Staple of American Affection

Gustavo Nino, an agricultural economics researcher at the University of Illinois, explains the dominance of roses in the market:

• Roses Represent 50% of Imports: These popular flowers mostly originate from Colombia and Ecuador, leveraging their ideal microclimates for year-round production (06:55).

• Transportation Methods: While most roses are air-shipped to ensure freshness—a practice that has more than doubled since 2020—there is a growing shift towards sea shipping for commodity flowers like carnations and mums. Virginia Houston notes, “More flowers are coming in on container” (07:39).

Economic Pressures and Tariff Threats

Kate Penn, CEO of the Society of American Florists, discusses the delicate balance importers must maintain:

• Stable Prices Amid Tariff Threats: Although prices have remained relatively stable, threats like the potential Trump tariff on Colombian flowers could disrupt margins, leading to increased costs: “There’s only so much flower importers can weather before their business starts to wilt” (08:20).

Conclusion: Navigating a Complex Market

As Valentine's Day approaches, the flower industry must navigate logistical challenges, economic pressures, and international trade dynamics to meet consumer demand.

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Final Thoughts

David Brancaccio wraps up the episode by highlighting the interconnectedness of global supply chains and domestic economic policies, emphasizing how these factors collectively impact everyday aspects of life, from inflation rates to the flowers that adorn Valentine's Day bouquets.

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Notable Quotes:

• Jeffrey Cleveland: “We want to see that progressing back under 3% and headed towards, let's say, 2.5%. So the progress is really stalled.” (00:54)

• John Boyd: “We put in the ground between 75,000 to $100,000 just in seed. We put it in the ground and I don't know if I'm going to get it back.” (02:51)

• Sun Tae Kim: “Without authenticity, you become co-opted. You'll be a tool for greenwashing.” (05:21)

• Gustavo Nino: “Americans actually love roses. Roses represent 50% of imports.” (06:55)

• Kate Penn: “There’s only so much flower importers can weather before their business starts to wilt.” (08:20)

This episode of Marketplace Morning Report offers listeners a thorough examination of current economic trends and the intricate global networks that sustain industries critical to both the US economy and everyday consumer experiences.

Transcript

[David Brancaccio]

We call it foreign aid, but it also helps Americans like farmers. I'm David Brancaccio in New York. First, there's news now that the consumer price index came in slightly hotter than expected today. That's for the month of January. Prices were up half a percent, which means the consumer price index is up 3% in a year. Jeffrey Cleveland is chief economist at the investment firm Paden and Regal, based in Los Angeles. Welcome.

[Jeffrey Cleveland]

Good morning, David.

[David Brancaccio]

This is not blazing hot, but a little hotter than many would have wanted to see.

[Jeffrey Cleveland]

Yeah, disappointing, David. We wanted to see more progress on inflation, particularly on core inflation x Food x Energy on a year on year basis. That's at 3.3% right now. So it actually ticked up on the month. We want to see that progressing back under 3% and headed towards, let's say, 2.5%. So the progress is really stalled.

[David Brancaccio]

Well, it's not like companies that sell things are helping here. I mean, motor vehicle insurance up, used cars and trucks up, medical care, airline fares up. I mean, it's hard to battle inflation when that's happening and rents as well.

[Jeffrey Cleveland]

I think shelter big contributor to the increase in inflation over the month. So some of that, David, could be maybe a January effect. There's been some talk of that the last couple of years. We've seen hot inflation readings in January. So I don't want to overreact to any one report, but I think certainly this is disappointment for consumers but also for policymakers who are looking for additional progress so more cooling before they make their next interest rate move.

[David Brancaccio]

Jeffrey Cleveland, chief economist Peyton and Riegel, thank you very much.

[Jeffrey Cleveland]

Have a good week.

[David Brancaccio]

In fact, the Fed chair Jay Powell will be testifying on Capitol Hill for a second day shortly. Some of the food the US Distributes to help people in other countries comes from US farmers. According to archived USAID data, the agency bought more than a million metric tons of food from US producers in fiscal 2023. It's a market US growers depend on income now unpredictable given the Trump administration's attempts to freeze foreign aid. Marketplace's Nancy Marshall Genser has that much.

[Nancy Marshall Genzer]

Of the food distributed by USAID comes from small farms across the US it's pooled in grain elevators and then sold the federal government for food aid. One of the growers is John Boyd.

[John Boyd]

Soybeans and corn ended up in the USAID program that's grown here from Boyd Farms in Boyton, Virginia.

[Nancy Marshall Genzer]

Boyd is a fourth generation farmer and head of the National Black Farmers Association. He was happy to hear that food purchases and deliveries under existing USAID agreements have resumed, but it's still unclear what will happen to, for example, the flagship Farm Food for Peace program that makes it hard for Boyd to plan for planting season next month.

[John Boyd]

We put in the ground between 75,000 to $100,000 just in seed. We put it in the ground and I don't know if I'm going to get it back.

[Nancy Marshall Genzer]

USAID food aid programs are a steady market for Boyd, which helps as he struggles with high costs and the low prices he's getting for his crops. About $9 a bushel this year for soybeans, he says, which is below break.

[John Boyd]

Even point for I need to be about 11 bucks a bushel to even break even.

[Nancy Marshall Genzer]

Virginia Houston is also worried about the future. She's with the American Soybean Association.

[Virginia Houston]

It's our understanding that usaid, given its current non existence Food for Peace future purchases are on hold.

[Nancy Marshall Genzer]

Still, Houston says U.S. farmers really want to see programs like Food for Peace continue. I'm Nancy Marshall Genzer for Marketplace.

[Kyle Rysdal]

Hi, I'm Kyle Rysdal, the host of How We Survive. This season is all about the institution that shaped me, the US Military and how it could shape the future of climate tech. You've probably heard that 2024 was the hottest year on record, that wildfires devastated Los Angeles and that the US withdrew from the Paris Agreement. And while all that might feel pretty terrible, the climate crisis is not an inevitable reality. From simulated climate emergencies to micro grids and sustainable aviation fuel, we look at how the military is investing part of its 850 billion dollar budget in a greener, more resilient future. Listen to How We Survive wherever you get Your podcasts.

[David Brancaccio]

Soap company Dr. Bronner's says it will no longer be what's called a B Corporation, letter B. Those are companies that choose to adhere to high standards for their treatment of workers, supply chains and the environment. They get certified by a nonprofit. But Dr. Bronner says the standards are not high enough, Marketplace's Henry Epp reports.

[Henry Epp]

There are two factions in the B Corp community, says Sun Tae Kim, a professor at Johns Hopkins University. One focused on meeting higher standards, the other on expanding what counts as a B Corp. And they need each other, kim says. If you just focus on the highest standards, you become a smaller movement which.

[Sun Tae Kim]

Doesn'T really have any impact on the mainstream economy.

[Henry Epp]

On the other hand, if you expand.

[Sun Tae Kim]

Without authenticity, you become co opted. You'll be a tool for greenwashing.

[Henry Epp]

Dr. Bronner's argues that's been happening to the B Corp Movement for a few years. David Bronner is the company's CEO.

[Sun Tae Kim]

We're just definitely very concerned with this move to really embrace multinationals and bring them into the B core ecosystem without.

[Henry Epp]

Making them clean up their supply chains, bronner argues. B Lab, the nonprofit that governs all this, declined an interview request, but says it's developing a new, more holistic set of requirements for companies. I'm Henry App for Marketplace with that.

[David Brancaccio]

Love celebration coming Friday, tens of millions of fresh cut flowers are pouring into the U. S, mostly from South America. Imports accounts for more than 80% of flowers sold here. Daniel Ackerman looked at how the $2 billion industry is doing with V day approaching fast.

[Michael Black]

Right now the warehouse floor at Jet Fresh Flower importers in Miami is busy, to say the least.

[Sun Tae Kim]

People can envision the stock market and how you see it on tv, all the guys screaming and yelling inside the stock exchange and all the papers flying around, all that stuff. Well, that's what it's like for us with flowers.

[Michael Black]

Michael Black manages all this somehow, and he says Valentine's Day is make or break for the flower industry, even though he typically sells more stems during another holiday coming up in May.

[Sun Tae Kim]

Mother's Day is a bigger volume holiday, but Valentine is bigger dollars, bigger dollars.

[Michael Black]

Thanks to one flower in particular, a flower Gustavo Nino is looking to buy this week.

[Sun Tae Kim]

Yeah, I'm trying to specifically buy in roses, right?

[Michael Black]

Nino researches agricultural economics at the University of Illinois, and he says Americans actually love roses. Roses represent 50% of imports, and the vast majority of those roses come from just two countries, Colombia and Ecuador, Nino says. They have ideal microclimates that allow them.

[Sun Tae Kim]

To have a very good production all.

[Michael Black]

Over the year with no off season. Those South American imports have been key to meeting growing demand for cut flowers. Nino says imports have more than doubled since 2020. Most arrive by air for freshness. But Kate Penn, CEO of the Society of American Florists, says another method that's.

[Virginia Houston]

Really growing quickly is sea shipping. More flowers are coming in on container.

[Michael Black]

Ships, Penn says as long as they're chilled, those slower and cheaper to use. Ships work just fine for your standard.

[Virginia Houston]

Commodity flowers, carnations and mums and roses and those things that retailers know that they need, you pre order them and they're just part of your inventory.

[Michael Black]

Penn says prices on cut flowers have stayed relatively stable in the last couple years. But remember all that. Will he, won't he? Of Trump's tariff threat against Columbia last month, Penn says that sent a shockwave through the industry that would have had.

[Virginia Houston]

An influence on the prices. And it really is a penny's business in terms of margin.

[Michael Black]

And so Penn says, there's only so much flour importers can weather before their business starts to wilt. I'm Daniel Ackerman for Marketplace, and in.

[David Brancaccio]

New York, I'm David Brancaccio. You're listening to the Marketplace Morning Report from apm, American Public Media.

[Kyle Rysdal]

This economy can be complicated. That's why the Marketplace newsletter makes understanding it all simple. Get smart takes on the week's biggest stories delivered to your inbox every Friday. No jargon, no hype, just economics you can use. Sign up [e-mail] subscribe.