In March 2018, North Carolina State University conducted the fourth annual survey to examine inventory and pricing of North Carolina sod.
- Supply of bermudagrass is better than 2017, with most suppliers saying they have adequate supplies for their expected demand in 2018.
- Supply of zoysiagrass is expected to be better in 2018 compared to 2017, but there still may be some shortages.
- This is the first year that a quarter of the producers predicted they could have shortages of centipedegrass and St. Augustinegrass.
- The two grasses with significant sod price increases in 2018 compared to 2017 were zoysiagrass and Kentucky bluegrass; otherwise prices of sod types are likely to remain similar to last year.
- The supply of tall fescue is projected to be very good in 2018.
- Production acreage has remained consistent or slightly increased over 2017.
- The primary markets for North Carolina sod producers are landscape contractors.
- There was an uptick in sales to golf courses in 2017 compared to previous years.
Twenty-five producers representing the following farm sizes completed the anonymous online survey:
- less than 200 acres (10 participants)
- 201 to 500 acres (seven 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 60% of the sod farms in North Carolina.
We obtained inventory estimates for bermudagrass, zoysiagrass, centipedegrass, St. Augustinegrass, tall fescue, and Kentucky bluegrass as well as a tall fescue/Kentucky bluegrass mix. 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 (80%) of the surveyed producers. Sixty-five percent of these producers rated their inventory as adequate this year; 20% indicated their inventory was excellent. For 2018, 15% of all bermudagrass producers projected having less than adequate supplies. This is a lower percentage than the 35% that reported shortages in 2017.
Zoysiagrass is being grown by 19 (76%) of the surveyed producers. Fifty-eight percent of these producers rated their inventory as adequate this year and 16% indicated it was excellent. For 2018, 26% of all zoysiagrass producers projected shortages. While there is still a projection of shortages, supply is projected to be slightly better than in 2017 when 44% projected shortages.
Of the producers surveyed, 16 (64%) are growing centipedegrass. Seventy-five percent of these growers reported they had adequate to excellent inventory. Twenty-five percent of all centipedegrass growers anticipate a shortage during 2018, which is a higher projected shortage than last year (19%).
Eight (32%) of the surveyed producers are growing St. Augustinegrass. Seventy-five percent of these growers reported they had adequate to excellent inventory, and 25% anticipated a shortage during 2018. These estimates mirror those in 2017.
Of the producers surveyed, seven (28%) are growing tall fescue by itself. All the growers estimated they would have adequate to excellent inventory with no anticipated shortages for 2018.
A mixture of tall fescue and Kentucky bluegrass is being grown by 10 (40%) of the surveyed producers. Ninety percent of these producers rated their inventory as adequate to excellent this year, and 10% anticipate a shortage during 2018.
Five producers surveyed (20%) reported growing Kentucky bluegrass by itself. Of the group that responded to this survey, 80% anticipated adequate to excellent supply during 2018, and 20% anticipate a shortage during 2018.
Table 1 provides a sod price perspective for all grass species in 2018.
|Turfgrass (No. of growers responding)||2018 Average (price/sq. ft.)|
|St. Augustinegrass (6)||$0.33||$0.35|
|Tall Fescue (2)||$0.33||$0.37|
|Tall fescue + Kentucky bluegrass (9)||$0.29||$0.33|
|Kentucky bluegrass (3)||$0.37||$0.39|
|*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 $0.28 and delivered to the closest urban market or within 100 miles of the farm averaged the same price. The farm price ranged from $0.19 to $0.35, whereas delivered prices ranged from $0.21 to $0.37. The average on-farm price of bermudagrass increased by 8% from 2017.
Zoysiagrass prices were the highest of all turfgrasses. The average price on the farm was $0.42 per square foot and ranged from $0.33 to $0.56. The average price delivered to an urban market or within 100 miles of the farm was $0.45 and ranged from $0.33 to $0.58. The average on-farm price of zoysiagrass increased by nearly 11% from 2017.
Centipedegrass prices in 2018 ranged from $0.19 to $0.33 per square foot and averaged $0.24. The price, when delivered, ranged from $0.19 to $0.36 and averaged $0.27. Centipedegrass prices were similar to last year’s prices.
St. Augustinegrass prices in 2018 ranged from $0.35 to $0.45 per square foot and averaged $0.33. The price, when delivered, ranged from $0.37 to $0.43 and averaged $0.35. St. Augustine on-farm prices were similar to last year’s and there was a decrease by 10% in 2018 delivery prices.
Tall fescue prices in 2018 ranged from $0.32 to $0.34 per square foot and averaged $0.33. The price, when delivered, ranged from $0.36 to $0.38 and averaged $0.37. The average on-farm price of tall fescue increased about 14% from 2018.
The mix of tall fescue and Kentucky bluegrass sod prices in 2018 ranged from $0.24 to $0.35 per square foot and averaged $0.29. The price, when delivered, ranged from $0.27 to $0.39 and averaged $0.33. These prices were a 6% decrease compared to 2017.
Kentucky bluegrass price in 2018 ranged from $0.32 to $0.45 per square foot and averaged $0.37. The price, when delivered ranged from 0.35 to $0.45 and averaged $0.39. This is an increase of about 16% in the on-farm price compared to 2017.
Some of the surveyed growers forecasted sod price decreases in 2018 for selected grasses. This is the first year (in four years of surveys) that some producers predicted price decreases. The majority of sod producers predict that sod prices will remain steady in 2018. A few producers predict price increases for particular grasses. The percentages of producers with expectations for price change in each grass is as follows:
- Bermudagrass—5% expect increases, 84% remain steady, 11% expect prices to decrease
- Zoysiagrass—11% expect increases, 83% remain steady, 6% expect prices to decrease
- Centipedegrass—7% expect increases, 93% remain steady, none expect prices to decrease
- St. Augustinegrass—14% expect increases, 86% remain steady, none expect prices to decrease
- Tall fescue—no producer expects price increases, 90% remain steady, 10% expect prices to decrease
- Tall fescue + Kentucky bluegrass—no producer expects price increases, 90% remain steady, 10% expect prices to decrease
- Kentucky bluegrass—no producer expects price increases and 100% predict prices to remain steady
In 2018, 50% of the surveyed growers reported that they grew some proprietary grasses on their farm. This is similar to the response recorded in previous years. The average percentage of their grasses that were proprietary was 26% with a reported range from 2 to 50%.
In 2018, 58% of the growers surveyed grew some certified sod. The average amount of certified grass reported by these farmers was 50% of their total sod acreage. Twenty-nine percent of these producers charged more for certified grass—$0.02 to $0.05 more per square foot. Two growers reported that 100% of their grasses were certified.
Freight rates per mile shipped to the closest urban market ranged from $1.50 to $8.00 per mile and averaged $3.72 per mile. Two sod farms reported flat freight rates of $175 to $250 per shipment, though these rates could vary depending on other factors. Fifty percent of respondents reported including freight costs as a part of the price quotes for customers, and 50% reported they invoiced freight separately.
Ninety-two percent of respondents indicated they did not charge an unloading fee. Two sod producers that indicated they charged an unloading fee reported the fee to be $75 and $100 to $150. Ninety-five 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 $175. 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., $4.00/mile). The average cost for additional drops was $65.
Only 8% of surveyed producers indicated that they add a fuel surcharge. One that reported a fuel surcharge indicated it was $25 if greater than a 100 mile round trip and $50 if they crossed over a state line.
When asked how often producers adjust their sale prices, 42% indicated they adjust their prices yearly whereas 58% make adjustments when needed. No respondents indicated that they adjust prices monthly or quarterly. It was interesting to note that in 2017 65% of the respondents indicated they adjust their prices yearly and only 35% adjusted when needed.
Table 2 provides an indication of the industry segments where sod is sold. Surveyed producers estimated that landscape contractors (68.2%) constituted the largest segment. The next three groups (golf, sports/athletic fields, and homeowners) were nearly equal, representing a little more than 9%. Retail garden centers comprised about 3% of sales and brokers were less than 2%. The largest changes compared to previous years are the increase in golf course sales and the reduction in broker sales.
|Retail garden centers||5||3.2|
|*Average percent of total sales|
Of the survey respondents, only 8% indicated that they reduced sod production acreage during 2017. It was reported that this reduction was due to a changeover in turfgrass. No respondent indicated that they would have a reduction in 2018. Seventy-nine percent indicated that they had increased acres during the last three years. The average percentage increase was 22%.
Several questions related to employee numbers and sod sales were added to this year’s survey that were not part of 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 10 employees. Of the 19 operations that responded, the number of full-time employees ranged from two to 50. The average number of seasonal employees (19 responses) ranged from zero to 13, with an average of four.
Total sod sales for the 18 operations that reported data ranged from $170,000 to $4.4 million. The average sod sales were $1.38 million. The mean value was influenced by a few larger operations. There were seven operations with sales greater than $1 million and five with annual sales less than $550,000. Thirty-seven percent of the producers indicated their sales increased in 2017, whereas 16% had a decrease and 46% reported sales stayed the same.
While trends may not tell a complete story from just a few years of data (2015 was the first survey year), we did see some changes in the 2018 predictions that were not seen in previous years. Annual data also provides some indication of sod supply and price in the near future. The total acreage of sod seems steady with a small amount of growth. Most grasses seem to be in good supply for 2018; however, there are potential shortages of some grasses, particularly zoysiagrass, centipedegrass, and St. Augustinegrass. For the first year in a while, the supply of tall fescue seems to be appropriate for the demand. The increased demand for turfgrasses has kept prices similar to 2017, except for zoysiagrass and Kentucky bluegrass. Prices for these two grasses increased from the previous survey although the prices are projected to remain steady in 2018.
The bulk of sod sales (>68%) 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 was noted that approximately 9% of the sod sales in 2017 were made to golf courses, whereas, that percentage was less than 4% in the previous survey. Sales to brokers decreased from roughly 9% to nearly 1%.
Publication date: April 2, 2018
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