Arkansas Turfgrass Association – State of the Industry – A Perspective from Turfgrass Producers International

December 11, 2023 | Arkansas Turfgrass Association | PODCAST

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ARKANSAS TURFGRASS: Dr. Casey Reynolds, Executive Director TPI

Turfgrass Producers International (TPI) has members who produce and sell turfgrass seed and sod in almost every U.S. state and over 30 countries. As I travel to visit with them, speak at conferences, write magazine articles, etc., I often get to speak with producers first-hand about what they’re experiencing in their local markets. This often includes the good and the bad, and oddly enough no matter where I go, the themes are usually similar. From a farm’s perspective, demand is up; costs are up; labor is short; and where did all the truck drivers go? From a market perspective, consumers and policy-makers increasingly just don’t understand natural grass lawns and their benefits, and in many areas of the country, they are quite literally trying to write them out of new construction, through local ordinances which ban or dis-incentivize the use of grass.

So where does this leave us? In the short run, housing is still quite hot and the demand for grass ebbs and flows with it. In the long run, will the next generation of consumers and home-buyers value or even want lawns, landscapes, natural grass athletic fields, and golf courses? The short answer to that question is that it’s up to us. But let’s revisit that a little later.

Data from the U.S. Department of Housing and Urban Development indicates that as of March 2023, purchases of new homes increased for a third consecutive month. Construction of new homes rose in February and sales of existing homes surged after a 12-month decline. The U.S. Census Bureau shows that New Housing Units are still strong, despite a recent drop-off from the post-covid boom (Figure 1). As such, turfgrass producers in most areas of the country including Alabama sod producers, are still reporting strong sales, high demand, and sometimes low inventory.

While this is good news for producers and others in the green industry who rely on lawns, landscapes, sports fields, and golf courses, it is no surprise to anyone that costs are also up. The U.S. Bureau of Labor Statistics has some useful tools on its website at https://www.bls.gov. If you’re a data junky, or just a little curious to see it on paper, you can find some helpful charts and graphs that track the costs of goods and services over many years. It should be no spoiler that food, energy, raw materials, transportation, and warehousing are all up when compared to pre-Covid levels. A little good news is that all 2023 Producer Prices Indexes are down when compared to 2021 and 2022.

Like many industries, turfgrass seed and sod producers routinely look for efficiencies to reduce these costs and often find them in new equipment, automation, digitalization, GPS/Remote Sensing technologies, new techniques or practices, and so on. It would be difficult to list them all here, but out of necessity comes innovation and there is always a better way to do things. There are certainly plenty of those opportunities out there just as there are in other segments of the green industry.

Now, let’s change course from a production perspective to a market perspective, which is just as likely to impact the state of our industry. With that in mind, what is the current and future consumer perception of lawns and other green spaces? I suspect many of you have seen recent headlines such as “Kill Your Lawn Before It Kills You”, “American Lawns: Ending the Toxic Yard” and so on. If we need further proof of that, simply Google the phrase “Lawns are” and you can see the top search terms that people are entering into common Google queries. The top hits include Lawns are “bad, stupid, wasteful, colonialism, useless, ecological disaster,” and so on.

While it is easy to sometimes write these off as op-eds, there is definitely consumer research that shows we as an industry should take these seriously. Eighty-two percent of consumers are familiar with sustainability, up from 55% in 2007. Additionally, between 51 and 95% of consumers will pay more for products aligned with their values on sustainability. Counter that with the fact that less than half of consumers are aware of the environmental benefits of lawns and other green spaces. It also differs by generation where consumers between 18 and 34 years old are less aware of the benefits than consumers 35 years old and older. It also doesn’t help that the next generation of home buyers are right now playing middle, high school, and college sports on an increasingly large number of plastic, synthetic turf athletic fields.

So, what does this mean for the future of green space? It means that we as the green industry in general, need to take our story of the benefits of lawns and other green spaces and shout it from the rooftops. We absolutely need to be educating the current and next generation of consumers on the ecosystem services that lawns and other green spaces bring to the urban-suburban interface. Just as one example, a 2018 research paper indicated that for one urban/suburban city venue, 89% of the carbon that was captured or sequestered, along with 88% of the water quality regulated and 81% of the runoff regulated for that entire city was being done by managed grasses. Follow-up question, do your customers, neighbors, city council members, and others know it? I most often find they don’t. If that is the case, please refer them to www.TheLawnInstitute.org where they can find many of the benefits of lawns. Share the information with everyone. Voters need to know the true story as well as those making purchasing decisions and politicians setting public policy in communities all over the United States.

In the last 12 – 18 months alone, I have had to respond to turfgrass bans or restrictions all over the country, and yes, they include northern states and southern states, eastern states and western states, and red states and blue states. That seems so ironic because one thing that the Covid-19 pandemic restrictions highlighted was that once people stayed at home, they often realized they wanted to spend more time outdoors enjoying their lawns and landscape. This is the primary reason our industry weathered that storm so well. Interestingly, prior to the pandemic, Turfgrass Producers International (TPI) funded consumer research on the perceptions of lawns and found that once you explain the many benefits of turfgrass to people, they understand it and are willing to continue investing in natural grass lawns.

So, how do we do this in a meaningful way? One industry initiative right now that you may have heard about is a proposed USDA Research and Promotion Program, aka “checkoff,” for sod production. There are currently 22 USDA Research and Promotion Programs (aka checkoffs). They have a long, proven history of funding research and promotion of agricultural products having been around since the 1960s. Since then, the current 22 checkoffs combined routinely raise 1 billion dollars each year to fund research and promotion of their products. Many, if not all, checkoff programs arise out of an industry’s need to push back against market threats or shifting consumer trends, as well as to fund research on improving products or techniques. The soybean checkoff this year alone identified up to $400 million in
unrealized market potential and then funded research to address it.

Current estimates put a potential U.S. Sod Checkoff program at raising around $14 million annually to fund local and national research, as well as the promotion of lawns and other green spaces. Who knows what potential value it could be to our industry, but there is little doubt that everyone in the green industry, not just sod producers, could benefit by having a checkoff program promoting natural grass. Many of the associations representing our industries have gone on record saying they support the sod checkoff initiative. The National Association of Landscape Professionals, the Sports Field Managers Association, the US Golf Association Green Section, the American Farm Bureau, and others have stated that they understand the need for national and local research and promotion efforts to protect and promote green space. If you want to learn more about the proposed sod checkoff, visit www.SodCheckoff.org to stay up to date on the latest information.

Now, as we talk above about the current and future status of our industry, I’d just like to add a quick editorial perspective. One sod producer recently wrote about rising inflation, increasing fuel costs, and an unpredictable stock market in TPI’s Turf News magazine. When I say “recently,” that article was published in 1999. We had another sod producer write about ever-increasing water restrictions and the artificial turf market. That was in 2004. The point being, the challenges and opportunities we have today aren’t often that drastically different from those we faced years ago. Going forward, we should all be proud of how our industry responded to the changing dynamics of the past. Also, you should have comfort in knowing that Alabama Turfgrass Association members live and work in a great industry, and with vision, proper planning, and last but not least, proper investment in our industry’s future, we can make sure it thrives for many years to come.