NC State Extension Publications

## Introduction

In March 2021, North Carolina State University conducted the seventh annual survey to examine inventory and pricing of North Carolina sod.

Overview

• Supply of bermudagrass sod is similar to 2020, with most suppliers saying they have adequate supplies for their expected demand in 2021. There still may be some shortages.
• Supply of zoysiagrass and St. Augustinegrass are expected to be worse in 2021 compared to 2020, with more than 60% of surveyed producers expecting shortages in zoysiagrass and more than 40% expecting shortages in St. Augustinegrass.
• This was the fourth consecutive year that about one-third of the producers predicted they could have shortages of centipedegrass sod.
• No shortages for tall fescue and Kentucky bluegrass sod were predicted for 2021.
• Only three North Carolina growers reported growing pure stands of Kentucky bluegrass whereas 11 grow tall fescue interseeded with Kentucky bluegrass.
• There are expected price changes for all the turfgrass species in 2021 except for bermudagrass (no change). Zoysiagrass and tall fescue had price reductions of 6% and 11%, respectively. Of the actual prices reported for early 2021, Kentucky bluegrass had the greatest increases (24%). Centipedegrass and St. Augustinegrass had a 7% increase compared to 2020.
• There was a 21% reduction in growers reporting that they grew proprietary grasses and a 25% reduction in certified sod growers.
• Production acreage was projected to increase in 2021.
• The primary market for North Carolina sod producers continues to be landscape contractors.
• There was a 31% increase in sales directly to homeowners with a slight decrease in sales to the landscape contractor sector of consumers compared to previous years. The golf course sector replaced sports/athletic fields as number three in sales.
• There was a 24% reduction in the average number of full-time employees per producer.
• Total sod sales were reported to be 52% lower than the previous year.

## Survey Details

Twenty-five producers representing the following farm sizes completed the anonymous online survey:

• less than 200 acres (13 participants)
• 201 to 500 acres (six participants)
• 501 to 800 acres (two participants)
• more than 800 acres (four participants)

North Carolina Sod Producers Association (NCSPA) records suggest the number of completed surveys represents about 60% of the sod farms in North Carolina. The number of farms for the respective farm sizes suggests that this survey represents an overwhelming majority of the sod production acreage in the state.

## Inventories

We obtained inventory estimates for bermudagrass, zoysiagrass, centipedegrass, St. Augustinegrass, tall fescue, and Kentucky bluegrass as well as a tall fescue and Kentucky bluegrass mix. These estimates were 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 19 (76%) of the surveyed producers. This is currently the most popular turfgrass species grown by NC sod producers. Fifty-seven percent of these producers rated their inventory as adequate this year; 19% indicated their inventory was excellent. More than 60% of producers projected inventory levels of bermudagrass to be good over each of the last five years (Figure 1).

Zoysiagrass is being grown by 16 (64%) of the surveyed producers, making it the second most popular turfgrass species grown by NC sod producers. Thirty-eight percent of these producers rated their inventory as adequate this year but none indicated it was excellent. For 2021, 63% of all zoysiagrass producers projected shortages, similar to 2020 estimates. Over the last five years, the percentage of producers projecting good inventory levels peaked in 2019 and has been declining since then (Figure 1).

Of the producers surveyed, 13 (52%) are growing centipedegrass. Sixty-two percent of these growers reported they had adequate to excellent inventory. Thirty-eight percent of all centipedegrass growers anticipate a shortage during 2021.

Seven (28%) of the surveyed producers are growing St. Augustinegrass. Fifty-seven percent of these growers reported they had adequate to excellent inventory, and 43% anticipated a shortage during 2021.

Of the producers surveyed, seven (28%) are growing tall fescue by itself. Seventy-one percent estimated they would have adequate to excellent inventory and 29 percent anticipated a shortage for 2021. Over each of the last five years, more than 70% of producers projected good inventory levels of tall fescue (Figure 1).

A mixture of tall fescue and Kentucky bluegrass is being grown by 11 (44%) of the surveyed producers. Ninety-one percent of these producers rated their inventory as adequate to excellent this year and 9% anticipated shortages.

Three producers surveyed (12%) reported growing Kentucky bluegrass by itself. Of the group that responded to this survey, 100% anticipated adequate to excellent supply during 2021.

Figure 1. Percentage of bermudagrass, tall fescue, and zoysiagrass producers projecting adequate to excellent supply for the past five years.

## Pricing

Table 1 provides a sod price perspective for all grass species in 2021.

 Turfgrass (No. of growers responding) On-the-farm Delivered* Bermudagrass (19) $0.30$0.36 Zoysiagrass (16) $0.45$0.50 Centipedegrass (13) $0.29$0.35 St. Augustinegrass (7) $0.45$0.48 Tall Fescue (6) $0.33$0.43 Tall fescue + Kentucky bluegrass (12) $0.35$0.39 Kentucky bluegrass (3) $0.46$0.48 *Delivered to either closest urban market or within 100 miles of the farm

The average price per square foot was $0.30 for a truckload of bermudagrass sod at the farm and$0.36 delivered to the closest urban market or within 100 miles of the farm. The farm price ranged from $0.21 to$0.45, whereas delivered prices ranged from $0.27 to$0.56. The average on-farm prices for bermudagrass were the same as 2020.

Zoysiagrass prices were among the highest of all turfgrasses. The average price on the farm was $0.45 per square foot and ranged from$0.34 to $0.66. The average price delivered to an urban market or within 100 miles of the farm was$0.50 and ranged from $0.37 to$0.70. The average on-farm price of zoysiagrass decreased by 6% from 2020.

Centipedegrass prices in 2021 ranged from $0.21 to$0.55 per square foot and averaged $0.29. The price, when delivered, ranged from$0.22 to $0.66 and averaged$0.35. The average on-farm prices for centipedegrass increased 7% from 2020.

St. Augustinegrass prices in 2021 ranged from $0.36 to$0.50 per square foot and averaged $0.45. The price, when delivered, ranged from$0.40 to $0.55 and averaged$0.48. St. Augustine on-farm prices were 7% greater than in 2020 and the same as 2019 (Figure 2).

Tall fescue prices in 2021 ranged from $0.30 to$0.45 per square foot and averaged $0.33. The price, when delivered, ranged from$0.35 to $0.59 and averaged$0.43. The average on-farm price of tall fescue decreased by 11% from 2020.

The mix of tall fescue and Kentucky bluegrass sod prices in 2021 ranged from $0.28 to$0.52 per square foot and averaged $0.35. The price, when delivered, ranged from$0.30 to $0.56 and averaged$0.39. The on-farm prices increased by 3% compared to 2020.

Kentucky bluegrass sod prices in 2021 ranged from $0.40 to$0.52 per square foot and averaged $0.46, resulting in the highest value turfgrass sold by NC growers. The price, when delivered, ranged from$0.40 to $0.56 and averaged$0.48. This is a 24% increase in the on-farm price compared to 2020.

Figure 2 provides a six-year perspective of sod prices showing fluctuations of particular species since 2017. The data represents the average price. The percentage change reported for each grass compared to the previous year was as follows: bermudagrass, 0%; zoysiagrass, 6%; centipedegrass, 7%; St. Augustinegrass, 7%; tall fescue, -11%; tall fescue + Kentucky bluegrass, 3%; and Kentucky bluegrass, 24%.

Figure 2. Historical perspective of average sod prices in North Carolina, 2017 to 2021.

## Projected Price Increases

Most of the surveyed growers forecasted sod prices to remain steady or increase in 2021. The majority of sod producers predict that sod prices will remain steady in 2021. A few producers predict price increases or decreases for particular grasses. The percentages of producers with expectations for price changes in each grass is as follows:

• Bermudagrass—32% expect price increases, 68% expect prices to remain steady, none expect prices to decrease
• Zoysiagrass—41% expect price increases, 59% expect prices to remain steady, none expect prices to decrease
• Centipedegrass—33% expect price increases, 67% expect prices to remain steady, none expect prices to decrease
• St. Augustinegrass—20% expect price increases, 80% expect prices to remain steady, none expect prices to decrease
• Tall fescue—57% expect price increases, 43% expect prices to remain steady, none expect prices to decrease
• Tall fescue + Kentucky bluegrass—20% expect price increases, 80% expect prices to remain steady, none expect prices to decrease
• Kentucky bluegrass—33% expect price increases, 67% expect prices to remain steady, none expect prices to decrease.

## Proprietary Grass

In 2021, 48% of the surveyed growers reported that they grew some proprietary grasses on their farm. This is a 21% decrease compared to 2019. The average percentage of their grasses that were proprietary was 25% with a reported range from 4% to 75%.

## Certified Grass

In 2021, 48% of the growers surveyed grew some certified sod. This was a 25% decrease in what was reported in 2020. The average amount of certified grass reported by these farmers was 36% of their total sod acreage. Fifty percent of these producers charged more for certified grass—$0.02 to$0.10 more per square foot.

## Freight

Delivery charges are based on a flat rate for 52% of respondents and a per mile basis for 48%. Freight rates per mile shipped to the closest urban market ranged from $3.50 to$5.00 per mile and averaged $4.20 per mile (a 10% increase from the previous year). Eight sod farms reported flat freight rates of$150 to $300 per shipment with a mean of$220 (a 14% decrease over the previous year), though these rates could vary depending on other factors such as distance from farm. Forty percent of the respondents indicated that freight prices are included in price quotes to customers whereas 60% invoiced freight separately.

Eighty-eight percent of respondents indicated they did not charge an unloading fee. Two sod producers charged a $75 unloading fee. Eighty-four percent of respondents indicated they make additional drops on loads. The low-end charge for additional drops on a load was$12 and the high-end charge was $150. The average cost for additional drops was$80. Several respondents 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 (such as, $25) plus a mileage rate (for instance,$4.00/mile).

## Fuel Surcharge

Sixteen percent of respondents indicated that they add a fuel surcharge. Relative fuel prices each year seem to influence this practice.

## Price Changes

When asked how often producers adjust their sale prices, 36% indicated they adjust their prices yearly whereas 52% make adjustments when needed. Twelve percent indicated they change their prices quarterly and no respondents indicated that they adjust prices monthly.

## Credit Card Convenience Fee

Twenty-five percent of respondents indicated they charged a convenience fee for credit card purchases. This is a 500% increase in adoption compared to 2020.

## Sales by Industry Segment

Table 2 provides an indication of the industry segments where sod is sold. Surveyed producers estimated that landscape contractors (62%) constituted the largest segment. The next highest group was homeowners at 16%, followed by golf courses and sports/athletics with 8.2% and 6%, respectively. Retail garden centers were at 5.3% and brokers at 2.1%. The largest changes compared to previous years are the increase in direct homeowner sales and a slight uptick in sales to golf courses.

 Industry Segment Rank Average*(%) Landscape contractors 1 62.0 Homeowners 2 16.4 Golf courses 3 8.2 Sports/athletics 4 6.0 Retail garden centers 5 5.3 Brokers 6 2.1 *Average percent of total sales

## Acreage in Production

Of the survey respondents, 8% indicated that they reduced sod production acreage during 2020. The average decrease was 14%. Four percent indicated that they would reduce production in 2021. Eighty-four percent indicated that they had increased acres during the last three years. The average percentage of increased acres was 22%. The percentage of respondents who expected to increase production acreage in 2021 was eight percent greater than in 2020, but the average percentage of increased acreage was 33% less.

## Employees

Several questions related to employee numbers and sod sales were added to this year’s survey for the fourth year. 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 13 employees, which is a 24% decrease from 2020. Of the 25 operations that responded, the number of full-time employees ranged from one to 100. The average number of seasonal employees ranged from zero to 12, with an average of three, which is a 63% decrease from 2020.

## Total Sod Sales

Total sod sales for the 16 operations that reported data ranged from $85,000 to$5.6 million. The average sod sales were $1.371 million (a 52% reduction from the previous year’s values). Total sod sales reported were$21,936,300. Fifty percent of the producers indicated their sales increased in 2020, whereas 44% had a decrease and 6% reported sales stayed the same.

## Summary

The last year saw the second year of growth in the sod industry following several years of reducing acreage due to poor sod sales. There were some changes in sod prices, with about half the turfgrass species having moderate increases and half with moderate reductions. These adjustments may be partially influenced by the large increases that were noted in 2020. North Carolina was impacted by eight tropical systems in 2020, but only hurricane Isaias came onshore as a strong storm. Remnants of other storms and heavy fall rainfall still had significant impacts on sod production and harvesting. The biggest question early last year was the impacts from the COVID-19 pandemic. Since landscaping and home construction were deemed essential, the impact seemed to be much less than many other industries. It seems a strong house construction market will continue to provide a great need for NC sod in 2021, which is important since the bulk of sod sales (>62%) are to landscape contractors. The total acreage of sod seems steady with a small amount of growth. Most grasses seem to be in good supply for 2021 with the exception of zoysiagrass.

# Author

Professor
Crop & Soil Sciences