In March 2017, North Carolina State University conducted the third annual survey to examine inventory and pricing of North Carolina sod.
- Supply of bermudagrass is slightly better than 2016 but still considered less than the demand.
- Supply of zoysiagrass is expected to be lower in 2017 compared to 2016.
- The price of sod is likely to remain similar to last year though there will be an increase in some markets for particular grasses.
- The supply of tall fescue is projected to be better in 2017 than in 2016.
- Growers are currently adding acreage.
- The primary markets for North Carolina sod producers are landscape contractors.
Twenty-six producers representing the following farm sizes completed the anonymous online survey:
- less than 200 acres (13 participants)
- 201 to 500 acres (five participants)
- 501 to 800 acres (four participants)
- more than 800 acres (four participants)
North Carolina Sod Producers Association (NCSPA) records suggest the number of completed surveys represents about 62% of the sod farms in North Carolina.
We obtained inventory estimates for bermudagrass, zoysiagrass, centipedegrass, St. Augustinegrass, tall fescue, Kentucky bluegrass as well as a tall fescue/Kentucky bluegrass mix, and Kentucky bluegrass. This was based on estimated sales and the availability of sod as being excellent (more than 10% of demand), adequate (equal to demand), or poor (more than 10% shortage).
Pricing information included the farm price as well as the price for truckload orders delivered to the closest urban market or within 100 miles of the farms. All costs were reported as price per square foot of sod.
Bermudagrass is being grown by 20 (77%) of the surveyed producers. Only 45% of these producers rated their inventory as adequate this year; 20% indicated their inventory was excellent. For 2017, 35% of all bermudagrass producers projected having less than adequate supplies. This is a lower percentage than the 48% that reported shortages in 2016.
Zoysiagrass is being grown by 16 (61%) of the surveyed producers. Fifty-six percent of these producers rated their inventory as adequate to excellent this year. For 2017, 44% of all zoysiagrass producers projected shortages. Shortage projections were higher than 2016 with 29% projecting shortages.
Of the producers surveyed, 16 (61%) are growing centipedegrass. Just over 80% of these growers reported they had adequate to excellent inventory. Nineteen percent of all centipedegrass growers anticipate a shortage during 2017.
Of the producers surveyed, eight (31%) are growing St. Augustinegrass. Seventy-five percent of these growers reported they had adequate to excellent inventory, and 25% anticipated a shortage during 2017.
Of the producers surveyed, nine (35%) are growing tall fescue by itself. Eighty-nine percent of these growers reported they had adequate inventory. Eleven percent of all tall fescue growers anticipate a shortage during 2017. This is large decrease from the 36% who predicted shortages in 2016.
A mixture of tall fescue and Kentucky bluegrass is being grown by two (8%) of the surveyed producers. Seventy-five percent of these producers rated their inventory as adequate to excellent this year, and 25% anticipate a shortage during 2017.
Only two of the producers surveyed (8%) reported growing Kentucky bluegrass by itself. Of the group that responded to this survey, 100% anticipated adequate supply during 2017. This outlook is much better than the 60% that anticipated insufficient inventory in 2016.
Table 1 provides a sod price perspective for all grass species in 2017.
|Turfgrass (No. of growers responding)||2017 Average (price/sq. ft)|
|St. Augustinegrass (8)||$0.32||$0.39|
|Tall fescue (3)||$0.29||$0.31|
|Tall fescue + Kentucky bluegrass (8)||$0.31||$0.35|
|Kentucky bluegrass (1)||$0.32||$0.36|
* Delivered to either closest urban market or within 100 miles of the farm.
The average price per square foot for a truckload of bermudagrass sod at the farm was $0.26 and delivered to the closest urban market or within 100 miles of the farm was $0.29. The farm price ranged from $0.18 to $0.35, whereas delivered prices ranged from $0.18 to $0.45.
Zoysiagrass prices were the highest of all turfgrasses. The average price on the farm was $0.38 per square foot and ranged from $0.24 to $0.52. The average price delivered to an urban market or within 100 miles of the farm was $0.44 and ranged from $0.28 to $0.65.
Centipedegrass prices in 2017 ranged from $0.15 to $0.35 per square foot and averaged $0.23. The price, when delivered, ranged from $0.18 to $0.45 and averaged $0.28.
St. Augustinegrass prices in 2017 ranged from $0.30 to $0.45 per square foot and averaged $0.32. The price, when delivered, ranged from $0.33 to $0.43 and averaged $0.39.
Tall fescue prices in 2017 ranged from $0.26 to $0.32 per square foot and averaged $0.29. The price, when delivered, ranged from $0.29 to $0.34 and averaged $0.31.
The mix of tall fescue and Kentucky bluegrass sod prices in 2017 ranged from $0.25 to $0.35 per square foot and averaged $0.31. The price, when delivered, ranged from $0.29 to $0.45 and averaged $0.35.
Kentucky bluegrass price in 2017 from the one reporting farm was $0.32 per square foot. The price, when delivered was $0.36.
None of the surveyed growers forecasted a sod price decrease in 2017, the same prediction as the previous year. While the majority of sod producers predict that sod prices will remain steady, some producers predict price increases:
- Twenty-six percent of bermudagrass producers expect increased prices during spring 2017 and 74% expect prices to be the same.
- For zoysiagrass, 27% of producers anticipate increased prices during spring 2017 and 73% expect prices to be the same.
- For centipedegrass, 20% of producers expect prices to increase in 2017 and 80% expect prices to be the same.
- For St. Augustinegrass, 22% of producers expect prices to increase in 2017 and 78% expect prices to be the same.
- For tall fescue, no producers expect prices to increase in 2017 and 100% expect them to be the same.
- For tall fescue + Kentucky bluegrass, 11% of the producers expect increased prices during spring 2017 and 89% expect them to be the same.
- For Kentucky bluegrass all the producers expected the price to remain the same in 2017.
In 2017, 46% of the surveyed growers reported that they grew some proprietary grasses on their farm. The average percentage of their grasses that were proprietary was 33% with a reported range from 8 to 75%.
In 2017, 56% of the growers surveyed grew some certified sod. The average amount of certified grass reported by these farmers was 52% of their total sod acreage. Forty-six percent of these producers charged more for certified grass. Three growers reported that 100% of their grasses were certified.
Freight rates per mile shipped to the closest urban market ranged from $1.75 to $7.00 per mile and averaged $3.49 per mile. Thirty-two percent of respondents reported including freight costs as a part of the price quotes for customers, and 68% reported they invoiced freight separately.
Ninety-five percent of respondents indicated they did not charge an unloading fee. The one respondent who charged an unloading fee reported the fee to be $75. Eighty-seven percent of respondents indicated they make additional drops on loads. The low-end charge for additional drops on a load was $25 and the high-end charge was $150. Several reported that the charge was dependent on the distance between drops and that charges may be divided between buyers. Some also added a minimum drop fee (e.g., $35) plus a mileage rate (e.g., $2.30/mile). The average cost for additional drops was $55.
Only 9% of surveyed producers indicated that they add a fuel surcharge. The two that reported a fuel surcharge indicated they use a percentage basis (e.g., 10 or 15%).
When asked how often producers adjust their sale prices, 65% indicated they adjust their prices yearly whereas 35% make adjustments when needed. No respondents indicated that they adjust prices monthly or quarterly.
Table 2 provides an indication of the industry segments where sod is sold. Surveyed producers estimated that landscape contractors (67%) constituted the largest segment. The next three groups (brokers, sports/athletic fields, and homeowners) were nearly equal, representing a little more than 8%. Golf courses comprised about 4% of sales and retail garden centers made less than 3% of sod sales.
|Retail garden centers||6||2.9|
|* Average percent of total sales.|
Of the survey respondents, only 9% indicated that they reduced sod production acreage during 2016 (17.5% average reduction). It was not known whether this reduction was due to acres being taken out of turfgrass production and converted to other crops or left fallow or whether land was sold. Only one respondent indicated that they would have a reduction (15%) in 2017. Seventy-six percent indicated that they had increased acres during the last three years. The average percentage increase was 27%.
Several questions related to employee numbers and sod sales were added to this year’s survey that were not part of the previous surveys. These data were collected as a requirement for the North Carolina Department of Agriculture and Consumer Services grant that was awarded to NCSPA.
The average number of full-time employees at these sod production operations was nine employees. Of the 21 operations that responded, the number of full-time employees ranged from one to 27. The average number of seasonal employees (20 responses) ranged from zero to eight, with an average of four.
Total sod sales for the 20 operations that reported data ranged from $14,000 to $4.2 million. The average sod sales were $1.3 million. The mean value was influenced by a few larger operations. There were eight operations with sales greater than $1 million and six with annual sales less than $500,000. Fifty-four percent of the producers indicated their sales increased in 2016; whereas 23% had a decrease and 23% reported sales stayed the same.
While trends cannot be determined from just three years of data (2015 was the first survey year), we can get an indication of sod supply and price in the near future. The total acreage of sod is still increasing. Despite the increase in acreage, however, there are potential shortages of some grasses, particularly bermudagrass and zoysiagrass. The prediction of shortages is greater for zoysiagrass in 2017 compared to last year but less with tall fescue. The increased demand for turfgrasses has kept prices similar to 2016, which was an increase compared to the prior year. Prices of the other grasses seem relatively stable at this time but about a quarter of the producers do anticipate some shortages.
The bulk of sod sales (>67%) are to landscape contractors. It may be important to provide sod supply and relative pricing information to this group, especially in years when supply is limited. It will be important to continue conducting this survey on an annual basis to monitor supply and help stabilize prices based on the available supply.
Publication date: May 16, 2017
Last updated: May 16, 2017
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