ABOVE ALL FLOWERS

By David Kaplan

Greetings from the Wizard,

To say a lot has been happening in the last couple of months would be an understatement.
Recently we have had lots of serious and interesting events. Venezuela, Greenland, Minnesota, unrest in Iran, minimum wages in Colombia, ups and downs in the stock market and bitcoin, currency exchange rates and many more.

Colombia News

As we have all heard by now the minimum wage in Colombia increased by over 23%. Prices of flowers will be adjusted by most farms. Also, there has been a decrease in the exchange rate which decreases revenue. Today’s exchange is approximately where it was at in 2021.

Colombia supplies 60-70% of the flowers imported to the US. In a recent letter written by Augusto
Solano Mejía and shared by ASOCOLFLORES with industry partners, context was provided around Colombia’s newly announced 23.7% minimum wage increase, effective January 1, 2026. This was the largest labor cost increase in Colombian recent history.

Labor accounts for 40-60% of the total production cost depending on the product and intensity of labor to produce it. This will certainly have an impact on pricing especially when you couple it with tariffs and exchange rates. Most pricing increases will take place right after Valentines Day.

The dollar is giving the Colombian peso over 17% less pesos from a little less than a year ago. This is another big challenge for Colombian growers.

2/15/2026 1 USD=3,658.345 COP
4/9/2025 1 USD= 4,425.219 COP

Weather in the States and Europe

Weather has been wreaking havoc in the states in mid-January to early February. Bad weather in Europe also affected flower prices in early to mid-January.

Cold weather has threatened flower and greens crops in the United State and forced farms to use freeze protection.

Florida plays a critical role in the U.S. floral supply chain, serving as a primary source of greenery for designers across the country. Right now, that supply is under strain as a prolonged freeze moves across the state, bringing consecutive nights of sub-freezing temperatures during the year’s most important harvesting window.

According to the Floral Greens Farmers of Florida, Growers report more nights in the low 20s and below freezing than they have experienced since 1989. The timing could not be more challenging, as the freeze is unfolding during the peak Valentine’s Day harvest season. This could cause issues well beyond the Valentines holiday.

Winter weather has disrupted transportation in the U.S. All modes of transportation have been affected

Airlines canceled thousands of flights in January for a large winter storm which covered from Maine to Texas in snow and ice. The storm was January 23-25,2026 and resulted in all kinds of logistic disruptions in close to 40 states.

Winter Storm Fern has disrupted logistics across the US, affecting 40 states with heavy snow, ice and extreme cold. The American Logistics Aid Network reports significant disruptions, including flight and rail cancellations, power outages and suspended trucking operations. Spot rates for dry van and refrigerated freight are expected to rise, similar to trends seen after previous major winter storms

Commercial traffic across the Great Lakes is also being disrupted due to icy conditions, exacerbated by insufficient Coast Guard resources to break up the ice.

The bomb cyclone came next. It impacted the Carolinas and the Mid Atlantic and caused disruption on the I95 corridor. This cold isn’t going anywhere, and another blast is forecast for early February. February 8th hit record low temperatures in much of the Northeast. It has been at least 10 years since we have had a winter as bad as this.

Economic News

US GDP grew at an annual rate of 4.4% in Q3 of 2025, its fastest pace since 2023, driven by strong consumer spending and business investment in artificial intelligence, according to the Commerce Department. While consumer spending rose 3.5%, business investment excluding home-building increased 3.2%. The job market, however, remains weak, with only 28,000 jobs added monthly since March, compared with 400,000 during the post-pandemic hiring boom.

Sales rose across the board in December as consumers didn’t let economic uncertainty and other concerns get in the way of holiday spending.

Core retail sales (excluding restaurants, auto dealers and gas stations) rose 1.6% month over month in December and increased 3.58% year over year, according to the CNBC/NRF Retail Monitor released by the National Retail Federation. Core holiday retail sales (Nov. 1 through Dec. 31) grew 4.1%, based on Retail Monitor data.

Consumer Confidence increases defying economists’ expectations

According to a recent Bloomberg article, shopper attitudes remain below where they registered a year ago, data showed. Consumer sentiment ticked higher in February for the second consecutive month as inflation fears appeared to ease, though shopper attitudes remained well below levels registered a year ago according to the data from University of Michigan. 

At its low point in November, consumer sentiment fell close to its worst level since  pandemic-era inflation. Modest gains in recent months indicate some positive momentum for shoppers.

Year-ahead inflation expectations dropped from 4% in January to 3.5% in February, the data showed. The outcome anticipated by respondents would put inflation above its current level of 2.7%.

The labor market has slowed in recent months, while inflation has hovered above the Federal Reserve’s target rate of 2%.

Despite these challenges, some major economic indicators remain upbeat.

In the fall, shoppers helped achieve the fastest quarterly U.S. economic growth in two years, federal government data in December showed.

Meanwhile, a relatively small fraction of American adults are unemployed and looking for work. The unemployment rate dropped to 4.4% in December from 4.6% in November, the U.S. Bureau of Labor Statistics said, putting unemployment at a low level by historical standards.

Domestic Farmers

Domestic growers must battle higher wages that put more pressure on selling prices. According to the American Farm Bureau Federation State wage shifts raise labor costs for U.S. agriculture. National data show that average farm wages exceed minimum requirements. According to Occupational Employment and Wage Statistics, crop farm workers average US $18.20 per hour, and livestock workers average US $18.55 per hour, both higher than the highest state minimum wage.

US agriculture continues to face cost pressure linked to trade policy and labor availability. Tariffs introduced under President Donald Trump have increased farm input costs by more than US$33 billion in 2025, according to a December report from North Dakota State University’s Agricultural Trade Monitor. This estimate does not include lost export sales following retaliatory tariffs on US crops.

To offset higher production costs, the administration announced a US$12 billion aid package described as a bridge payment. The support is expected to begin in late February 2026 and will be capped at about US$155,000 per business, with a focus on smaller family farms.

Tariffs

Global merchandise trade growth slowed in the last quarter of 2025 as the earlier surge from pre-tariff order front-loading diminished, according to the World Trade Organization. 

Import volumes at major US container ports have continued to decline, with October 2025 recording a 7.9% year-over-year drop, and November and December suggest even steeper decreases, according to the Global Port Tracker from NRF and Hackett Associates. For the full year, NRF anticipates a 1.4% decline in total container volume compared to 2024. Import demand is expected to remain weak into 2026 because of tariffs and policy uncertainty.

Amid ongoing tariff uncertainty, conducting regular and thorough impact assessments has become essential for businesses. These assessments help organizations understand their exposure to current and potential tariffs. Rather than being a one-time exercise, impact assessments should be updated routinely, particularly following new or revised tariff announcements.

It appears that a significant portion of the tariffs have been absorbed by businesses and their supply chains, rather than fully being passed on to consumers. There is always a possibility that this could change, and more could be passed on to the consumer.

The effects of tariffs are major concerns for retailers, who are seeking stability in trade policy to maintain smooth supply chain operations. Tariffs are forcing companies to reevaluate their costs, risks, and liquidity.

Overall tariffs have reduced import volumes and raised consumer’s costs. According to CNBC that in 2025 each household’s expenses increased by $1000 and this is expected to increase to $1300 in 2026.

Labor Market

Job openings in December 2025 fell sharply to 6.5 million, the lowest number recorded since 2020, according to the latest Job Openings and Labor Turnover Survey. Layoffs rose slightly, from 1.7 million to 1.8 million, while quit rates remained stable at 2%. The decline in openings highlights a cooling in labor demand as the job market continues to soften into 2026.

The US economy added 64,000 jobs in November as the unemployment rate crept up to 4.6%, according to Labor Department data. The unemployment rate hit Its highest level since 2021.

US job growth slowed in December according to the Bureau of Labor Statistics, with non-farm payrolls increasing by 50,000, compared with a revised 56,000 in November, while the unemployment rate decreased to 4.4%. The slowdown is attributed in part to import tariffs and rising investment in AI that may be offsetting hiring. 

More jobs were added in January than expected. Non-farm payrolls gained 130,000 jobs in January, according to the Bureau of Labor Statistics, exceeding expectations. The unemployment rate edged lower, declining to 4.3%. 

Major US companies are making significant job cuts, citing over hiring during the pandemic as the primary reason. The trend is most pronounced in the tech and logistics sectors, which saw the most hiring during the pandemic. Although the job market remains relatively healthy, hiring has slowed, and those laid off are finding it harder to secure new positions.

The Fed

Prіϲеs are still climbing faster than paychecks.
Even as the Fed signals a pause, some everyday Americans keep paying double-digit interest.

A divided Fed held rates despite lots of political pressure. The Federal Reserve held its target federal funds interest rate in the 3.50%-3.75% range at the January meeting, matching investor expectations. Most Fed voting members supported the decision, while two dissented and preferred a 0.25% rate cut. The Fed kept policy unchanged to balance still-elevated inflation, a soft but stable labor market and the cumulative effects of rate reductions delivered across the prior three meetings. Chairman Powell summarized the backdrop by noting, “The risks to both (inflation and labor markets) are a little less (than they were).” The decision was made with dissenting votes from two governors who favored a rate cut. The Fed’s stance follows repeated political pressure. The central bank’s next move will depend on developments in the job market and inflation.

Logistics

Military forces will assist one of the largest container shipping alliances in its return to a violence-plagued Middle East trade route.

A.P. Moller-Maersk and Hapag-Lloyd said that they are routing one of their shared services through the Red Sea and the Suez Canal. All transits will be secured by naval assistance, the companies said in an announcement.

The service connecting India and the Middle East with the Mediterranean will Begin in mid-February. This key Mideast route that could mean lower rates for shippers from Asia to the United States
Major container lines and tanker operators diverted traffic away from the region in early 2024 after Houthi rebels in Yemen attacked Israel-linked merchant ships in solidarity with Palestinians. The United States and European Union in 2024 and 2025 bombed Houthi positions and provided escorts for commercial vessels. But the region has proved too unstable and carriers continue to divert ships on the Asia-U.S. route on longer voyages around the tip of Africa.

Ocean container freight rates on the eastbound trans-Pacific have given up gains won in 2026 as muted demand marks a lull that could last until the peak shipping season according to Freightos.
“And while ocean rates typically ease as the holiday approaches, they normally remain elevated relative to levels before the rush until after the post-holiday backlog is cleared,” said Freightos.

The Freightos Baltic Index shows Asia-U.S. West Coast prices tumbled 21% to $1,916 per forty-foot equivalent unit (FEU) in the latest week. Asia-U.S. East Coast rates fell by 10% to $3,457 per FEU.

The National Retail Federation U.S. ocean import report projects March volumes will dip 5% month-on-month. First-quarter demand is projected to trail year-ago levels by 7% year as retailers exercise caution and totals are compared to volumes front-loaded in Q1 last year.

UPS began a phased draw-down of the aging tri-engine aircraft but said on that it has accelerated the retirement plan and will replace the aircraft with more efficient twin-engine Boeing 767-300 cargo jets.

The MD-11s have been parked since Nov. 8, when the Federal Aviation Administration ordered UPS, FedEx and Western Global Airlines to ground their MD-11 fleets until inspections and any potential corrective steps can be completed after the fiery crash of UPS MD-11 in Louisville, Kentucky, that killed 15 people. Investigators are focusing on why the engine and engine pylon, which was discovered to have structural fatigue cracks, separated from the left wing as the plane moved down the runway.

UPS has decided to permanently retire its fleet of 27 MD-11 aircraft and take a $137 million after-tax write off instead of returning the wide-body freighters to service even if they are cleared to fly again by aviation authorities following the crash of one of its planes in early November.

UPS said it would eliminate an additional 30,000 frontline jobs and at least 24 facilities as part of a multiyear strategy to recharge growth through a planned decoupling from Amazon, lower-yielding Chinese e-commerce volumes and downsizing of its parcel delivery network to match lower volume flow.

In general, the U.S. trucking industry continues to face a tough economic reality: spot rates have failed to keep pace with inflation, squeezing carrier margins and contributing to significant financial pressure on truckers nationwide.

The Flower Business

The End of the Affordable Care Act Subsidies Poses New Challenge for Florists and Other Small Businesses. For florists, especially small studios, expiring credits have direct consequences for business planning, staffing, and personal finances.

While red roses will always be a Valentine’s staple, customers are increasingly drawn to refined, elevated interpretations rather than oversized or overly embellished designs. Clean lines, intentional color palettes, and premium blooms are replacing novelty-driven arrangements.

We have noticed traditional retail florists ordering varieties and species that have higher perceived value. Peonies, ranunculus, garden roses, anemones and other high-end products are being asked for more for this Valentines Day than usual. Roses still dominate but other products are making inroads.

Conclusion

Trade policies are among the top supply chain challenges for 2026. According to Sedgwick’s 2026 Forecasting Report Two-thirds of executives report that US trade policies have had a negative impact on their business, while only 3% claim they have had a positive effect. Other risks include AI advancement, labor shortages and the extreme weather we have been seeing this winter.

There has been a lot going on this year. The Wizard feels like we are on a News overload. AI spending is high and still increasing, we survived a very short government shut down that was settled the first week of February. Are we facing another shutdown soon? The Venezuelan president was captured by the US military, Trump spoke of seizing Greenland, and the Epstein files were released. Powell has a criminal investigation being conducted by the Justice department. We have had two Americans shot in Minneapolis by ICE. Our federal government lead by Donald Trump want to change the current election process and protocol. Chinese President XI fired a senior military general.

The external environment is changing, and the old rules of thumb may be losing relevance. The U.S. economy is becoming increasingly K-shaped. Higher-income households continue to see rising wages, wealth gains, and stronger spending power—while lower-income households face slowing wage growth, rising delinquencies, and weakening confidence. How does this relate to flower purchases. Can the flower business afford to lose a good percentage of their consumers.

Economic Pressure Forces Strategic Shifts As costs climbed and the economy cooled, florists adapted. Fluctuating tariffs on imported fresh product and hard goods created uncertainty and has put pressure on profit margins. At the same time, a slowdown in consumer spending pushed some retailers to shift their focus toward higher-end clientele. 

Looking Ahead to Valentine’s Day Florists have low expectations for Valentine’s Day 2026, with 44% predicting decreased sales. Consequently, 42% are pre-booking a lower percentage of product than last year. We will see very soon how accurate these predictions are!

The world has changed more than anyone could have expected. First the tariffs increased a lot of the prices on imported flowers and hard goods from many nations. Then we had the exchange rate dilemma causing countries to try and make up the difference of the currency by raising prices. Now Colombia has a very large increase in labor that puts them more on level field with Ecuador.  It is going to be an interesting season. We continue to hope that the Trump administration will reduce or eradicate tariffs on Flowers and help the industry. We do not want to see any sector of the Floral Industry become upside down financially.  Small business confidence is decreasing and wage inflation continues to increase. The Flower industry has been resilient over time and hopefully these conditions will be overcome and adapted to as everyone must become more efficient!

Breaking news as this is being written

Once again, we have a government shutdown! This one is being called a partial or limited shutdown and the third shutdown under Trump’s second term in only a little over one year. Negotiations between the White House and Democrats in Congress failed to agree on new restrictions for federal immigration agents. The shutdown will last at least 10 days as congress is on a 10-day break.

However, Republican leaders in Congress have said that negotiations would continue, and that members should be ready to return to Washington subject to an agreement.

The shutdown affects about 13% of the federal civilian workforce and is confined to agencies under the umbrella of the Department of Homeland Security (DHS), including the Transportation Security Administration (TSA), which screens airline passengers.

Air traffic controllers employed by the Federal Aviation Administration will receive paychecks as usual, reducing the risk of widespread flight cancellations. In October and November 2025, a different set of issues caused a broader shutdown of the federal government for a record 43 days.

Stay Tuned!

Thanks for reading my rants,

The Flower Wizard

To contact David Kaplan (also known as the “Flower Wizard” or “Floradamus”) at Above All Flowers
Email: aboveallflowers@mac.com
Call 401-486-0525