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Charlie Hall’s July 2026 outlook puts growers’ 2027 input-price increases at 2.5% in a favorable scenario or 4.4% in a less favorable one. He recommends reviewing product and customer margins, improving labor efficiency and building supply-chain flexibility as growers plan production and prices.
Charlie Hall, chief economist at AmericanHort, estimated in a July 2026 update that greenhouse and nursery growers could face a 2.5% or 4.4% increase in input prices in 2027, depending on economic and policy conditions. His Index of Prices Paid by Growers is intended to help businesses plan for costs and make decisions on pricing, production and suppliers.
Hall’s lower-cost scenario assumes an Iranian ceasefire, an open Strait of Hormuz and the expiration of Section 122 tariffs. His higher scenario projects a 4.4% rise; Hall said the assumptions behind the 2.5% estimate did not appear likely at the time of the update. These are forecasts, not confirmed future price changes.
Hall estimated that prices growers paid for inputs in 2026 would rise 3.6% from 2025. The report describes that as above the typical annual increase of 2% or less. Hall attributed the estimate largely to tariffs and uncertainty around the Strait of Hormuz. Labor remains growers’ largest cost, while fertilizer prices are exposed to oil-market volatility, according to Hall.
Hall advised growers to examine profitability by product and customer, including shrink, gross margins and discounts. He also urged businesses to improve labor efficiency and reduce shrink. The report says order pulling and truck loading can account for about 50% of labor costs, making those stages potential targets for lean-flow improvements. The source material’s recommendations also include assessing pricing against profit goals and maintaining backup suppliers.
Cost Forecasts Shape Grower Decisions
The estimates give growers a planning range while they make decisions about production volumes, prices and purchasing for the next year. If costs rise faster than expected, businesses may need to raise prices, accept lower margins or change what they produce and source. Hall framed those choices as difficult because input costs and demand can shift, leaving forecasts uncertain.
His focus on product and customer margins points to a practical distinction: high sales do not necessarily mean high profit. A large account may consume margin through discounts or service costs, while products with weak profitability may need a price change or a different supply plan. Reviewing those figures can help businesses direct effort toward the parts of the operation that support their profit objectives.
Supply disruptions also make resilience a financial decision. Holding more inventory or adding backup suppliers may lower exposure to shortages, but stockpiles tie up cash and storage capacity. Hall’s recommendations put operational efficiency and supply flexibility alongside pricing as ways to manage uncertainty.
How Hall Builds the Cost Outlook
Hall is a professor and Ellison Chair in International Floriculture at Texas A&M University, as well as AmericanHort’s chief economist. His Index of Prices Paid by Growers tracks changes in the real-world inputs used by greenhouse and nursery businesses, including labor, fuel, containers, freight and packaging.
Hall releases an initial report in early March and a summer update ahead of Cultivate, the industry event held as growers begin making production and pricing decisions for the following year. In the source report, he said the summer update helps growers use current information in price negotiations. The 2026 update followed tariff changes and BFG Supply’s bankruptcy, which added uncertainty about sourcing and supply-chain planning.
Some costs are less directly affected by tariffs than others, Hall said, including labor, peat under current exemptions, freight and fuel. Fertilizer costs, however, are correlated with oil prices, according to Hall. That relationship, alongside rising lumber costs cited in the report, complicates forecasts for both internal expenses and broader market prices.
“I know there are going to be price expectation changes between spring and summer, so I want to give growers the latest information they need when it comes time to negotiate prices.”
— Charlie Hall, chief economist at AmericanHort
Conditions Behind the 2027 Range
The 2.5% and 4.4% figures are scenario-based estimates; the report does not establish which will occur. The lower estimate depends on a ceasefire involving Iran, continued access through the Strait of Hormuz and Section 122 tariffs lapsing. The source describes those conditions as unlikely in Hall’s assessment at the time, but does not provide updated confirmation of their status.
The available report excerpt does not give the full methodology, the precise weights assigned to each input, or later revisions to the 2027 outlook. It also does not quantify how much any one grower can save through lean-flow changes, revised pricing or supplier diversification. Individual results will depend on their product mix, customers, labor needs and purchasing arrangements.
Growers Prepare for Pricing Decisions
Growers can use the index alongside their own trade-area sales, shrink, product-margin and customer-margin data as they set budgets and negotiate prices. Hall recommended identifying products that fall short of profit targets and considering whether to reprice them or obtain them from another source. He also pointed to supplier backups and inventory capacity as elements of contingency planning after the BFG Supply bankruptcy.
The next important signal is whether the economic and policy conditions behind Hall’s two scenarios change, and whether the index is revised. The source material does not state a date for another update. Businesses will need to monitor the index and their own costs as they finalize 2027 production and purchasing plans.
Key Questions
How much could grower input prices rise in 2027?
Hall’s July 2026 outlook gives two estimates: 2.5% if specified geopolitical and tariff conditions are met, or 4.4% in a less favorable scenario. They are forecasts, not confirmed outcomes.
What did Hall estimate for 2026?
Hall estimated that input prices paid by growers would increase 3.6% from 2025. The report compared this with typical annual increases of 2% or less.
Which costs are most exposed to oil prices?
Hall said fertilizer prices have about a 70% correlation with oil prices. This describes a relationship cited in the report; it does not establish that oil prices alone determine fertilizer costs.
What steps does Hall recommend growers take?
He recommends reviewing shrink and profitability by product and customer, comparing current prices with profit goals, improving labor efficiency and considering backup suppliers. The report highlights order pulling and truck loading as areas where lean-flow changes may help.
Does stockpiling inventory protect growers from supply problems?
Holding inventory can reduce exposure to shortages, according to the report, but it also ties up cash and storage or production space. Hall’s advice includes supply-chain flexibility and operational efficiency alongside inventory planning.
Source: rss
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