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North Carolina Turfgrass – Grady Miller, Professor, Crop and Soil Sciences

AG-809 Publication date: May 2020

In March 2020, North Carolina State University conducted the sixth annual survey to examine inventory and pricing of North Carolina sod.

Overview

• Supply of bermudagrass sod is up compared to 2019, with most suppliers saying they have adequate supplies for their expected demand in 2020. There still may be some shortages.
• Supply of zoysiagrass and St. Augustinegrass are expected to be worse in 2020 compared to 2019, with more than 40% of surveyed producers expecting shortages.
• This was the third consecutive year that about one-third of the producers predicted they could have shortages of centipedegrass sod.
• No shortages for tall fescue and tall fescue + Kentucky bluegrass sod were predicted for 2020.
• Only four North Carolina growers reported growing pure stands of Kentucky bluegrass, but half of those growers anticipated shortages.
• There are expected price increases for all the turfgrass species in 2020 except for centipedegrass (same) and St. Augustinegrass (7% decrease). Of the actual prices reported for early 2020, zoysiagrass and Kentucky bluegrass had the greatest increases.
• There was a 30% increase in growers reporting that they grew proprietary grasses but a slight reduction in certified sod growers. This reduction was not expected because most proprietary grasses require certification.
• Production acreage was projected to increase in 2020.
• The primary market for North Carolina sod producers continues to be landscape contractors.
• There was an uptick in sales directly to homeowners with a slight decrease in sales to the sports/athletic field sector of consumers compared to previous years.
• There was a 30% increase in the average number of full-time employees per producer.
• Total sod sales was reported to be 65% greater than the previous year.

Survey Details

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

• less than 200 acres (11 participants)
• 201 to 500 acres (four 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 55% 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 (83%) of the surveyed producers. This is currently the most popular turfgrass species grown by NC sod producers. Seventy-four percent of these producers rated their inventory as adequate this year; 11% indicated their inventory was excellent. For 2020, 16% of all bermudagrass producers projected having less than adequate supplies. Projected inventory levels of bermudagrass have improved over the last five years (Figure 1) after significant shortfalls were predicted for 2015.

Zoysiagrass is being grown by 17 (74%) of the surveyed producers, making it the second most popular turfgrass species grown by NC sod producers. Fifty-three percent of these producers rated their inventory as adequate this year and 6% indicated it was excellent. For 2020, 41% of all zoysiagrass producers projected shortages (Figure 1).

Of the producers surveyed, 14 (61%) are growing centipedegrass. Sixty-four percent of these growers reported they had adequate to excellent inventory. Thirty-six percent of all centipedegrass growers anticipate a shortage during 2020.

Nine (39%) of the surveyed producers are growing St. Augustinegrass. Fifty-six percent of these growers reported they had adequate inventory, and 44% anticipated a shortage during 2020. The increased numbers of growers reported growing St. Augustinegrass in 2020 versus earlier surveys, combined with an anticipated shortage of St. Augustinegrass sod, suggest that interest in the turfgrass species has increased.

Of the producers surveyed, six (26%) are growing tall fescue by itself. One-hundred percent estimated they would have adequate to excellent inventory and no grower anticipated a shortage for 2020 (Figure 1).

A mixture of tall fescue and Kentucky bluegrass is being grown by 11 (48%) of the surveyed producers. One-hundred percent of these producers rated their inventory as adequate to excellent this year.

Four producers surveyed (17%) reported growing Kentucky bluegrass by itself. Of the group that responded to this survey, 50% anticipated adequate supply during 2020, and 50% anticipate a shortage during 2020.

Pricing

Table 1 provides a sod price perspective for all grass species in 2020.

Table 1. Sod price averages.

*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 $0.35 delivered to the closest urban market or within 100 miles of the farm. The farm price ranged from $0.23 to $0.51, whereas delivered prices ranged from $0.25 to $0.58. This is about a 7% increase in on-farm prices compared to 2019.

Zoysiagrass prices were among the highest of all turfgrasses. The average price on the farm was $0.48 per square foot and ranged from $0.38 to $0.93. The average price delivered to an urban market or within 100 miles of the farm was $0.49 and ranged from $0.40 to $0.73. The average on-farm price of zoysiagrass increased by 9% from 2019.

Centipedegrass prices in 2020 ranged from $0.21 to $0.53 per square foot and averaged $0.27. The price, when delivered, ranged from $0.22 to $0.58 and averaged $0.29. The average on-farm prices for centipedegrass was the same as 2019.

St. Augustinegrass prices in 2020 ranged from $0.36 to $0.45 per square foot and averaged $0.42. The price, when delivered, ranged from $0.38 to $0.52 and averaged $0.46. St. Augustine on-farm prices were 7% less than in 2019. Last year’s price was a significant increase compared to the previous year, so the price reduction in 2020 still resulted in a sod price well above 2018 prices (Figure 2).

Tall fescue prices in 2020 ranged from $0.29 to $0.55 per square foot and averaged $0.33. The price, when delivered, ranged from $0.34 to $0.64 and averaged $0.44. The average on-farm price of tall fescue was the same as last year.

The mix of tall fescue and Kentucky bluegrass sod prices in 2020 ranged from $0.29 to $0.55 per square foot and averaged $0.34. The price, when delivered, ranged from $0.31 to $0.65 and averaged $0.40. The on-farm prices increased by 3% compared to 2019.

Kentucky bluegrass sod price in 2020 ranged from $0.33 to $0.40 per square foot and averaged $0.34. The price, when delivered was $0.44 for all three growers. This is a 9% increase in the on-farm price compared to 2019.

Figure 2 provides a six-year perspective of sod prices showing fluctuations of particular species since 2015. The data represents the average price. While not shown on this graph, there was a significant increase on the top end of the prices in 2020 compared to 2019 for all the grasses except St. Augustinegrass. The largest percentage change reported for each grass compared to the previous year was as follows: bermuda, 34%; zoysiagrass, 58%; centipedegrass, 47%; St. Augustinegrass, -18%; tall fescue, 38%; tall fescue + Kentucky bluegrass, 49%; and Kentucky bluegrass, 14%.

Projected Price Increases

Most of the surveyed growers forecasted sod price to remain steady or increase in 2020. The majority of sod producers predict that sod prices will remain steady in 2020. A few producers predict price increases or decreases for particular grasses. The percentages of producers with expectations for price change in each grass is as follows:

• Bermudagrass—16% expect price increases, 79% expect prices to remain steady, 5% expect prices to decrease
• Zoysiagrass—35% expect price increases, 65% expect prices to remain steady, none expect prices to decrease
• Centipedegrass—29% expect price increases, 71% expect prices to remain steady, none expect prices to decrease
• Augustinegrass—40% expect price increases, 60% expect prices to remain steady, none expect prices to decrease
• Tall fescue—20% expect price increases, 60% expect prices to remain steady, 20% expect prices to decrease
• Tall fescue + Kentucky bluegrass—8% expect price increases, 92% expect prices to remain steady, none expect prices to decrease
• Kentucky bluegrass—13% expect price increases, 67% expect prices to remain steady, none expect prices to decrease.

Proprietary Grass

In 2020, 61% of the surveyed growers reported that they grew some proprietary grasses on their farm. This is a 30% increase compared to the last couple of years. The average percentage of their grasses that were proprietary was 28% with a reported range from 0% to 70%.

Certified Grass

In 2020, 64% of the growers surveyed grew some certified sod. This was a 6% decrease in what was reported in 2019. The average amount of certified grass reported by these farmers was 50% of their total sod acreage. Forty-six percent of these producers charged more for certified grass—$0.02 to $0.05 more per square foot.

Freight

Delivery charges are based on a flat rate for 57% of respondents and a per mile basis for 43%. Freight rates per mile shipped to the closest urban market ranged from $3.00 to $5.00 per mile and averaged $3.83 per mile (a 7% increase from the previous year). Eight sod farms reported flat freight rates of $150 to $350 per shipment with a mean of $257 (a 24% increase over the previous year), though these rates could vary depending on other factors. Forty-five percent of the respondents indicated that freight prices are included in price quotes to customers whereas 55% invoiced freight separately.

Eighty-seven percent of respondents indicated they did not charge an unloading fee. One sod producer charged a $75 unloading fee, a second charged $150, and a third charged $3/pallet. Eighty-seven percent of respondents indicated they make additional drops on loads. The low-end charge for additional drops on a load was $20 and the high-end charge was $175. The average cost for additional drops was $66. 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 (such as, $35) plus a mileage rate (for instance, $4.00/mile).

Fuel Surcharge

Two producers indicated that they add a fuel surcharge. Relative fuel prices each year seem to influence this practice. As last year, no producer reported they used fuel surcharges.

Price Changes

When asked how often producers adjust their sale prices, 61% indicated they adjust their prices yearly whereas 39% make adjustments when needed. No respondents indicated that they adjust prices monthly or quarterly.

Credit Card Convenience Fee

Only one producer indicated they charged a convenience fee for credit card purchases.

Sales by Industry Segments

Table 2 provides an indication of the industry segments where sod is sold. Surveyed producers estimated that landscape contractors (66.6%) constituted the largest segment. The next highest group was homeowners at nearly 13%, followed by sports and athletics with nearly 10%. Golf courses were just over 5% with retail garden centers at 3.6% and brokers at 2.3%. The largest changes compared to previous years are the increase in direct homeowner sales.

Table 2. Ranking of Industry Segments for Sale of Turfgrass.

*Average percent of total sales

Acreage in Production

Of the survey respondents, 17% indicated that they reduced sod production acreage during 2019. The average decrease was 20%. Both of these responses are a significant increase compared to the previous year. Nine percent indicated that they would have reduced production in 2020. Seventy-eight percent indicated that they had increased acres during the last three years. The average percentage increase was 33%. The percentage of respondents who expected to increase production acreage in 2020 was similar to last year, but the average percentage increase nearly doubled. 

Employees 

Several questions related to employee numbers and sod sales were added to this year’s survey for the third 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 17 employees, which is a 30% increase from 2019. Of the 21 operations that responded, the number of full-time employees ranged from one to 100. The average number of seasonal employees ranged from zero to 50, with an average of eight.

Total Sod Sales

Total sod sales for the 18 operations that reported data ranged from $121,968 to $20 million. The average sod sales were $2.864 million (a 62% increase from the previous year’s values). Total sod sales reported were $51,561,968. The mean value was influenced by a few larger operations. There were three operations with sales greater than $5 million and four with annual sales less than $550,000. Fifty-seven percent of the producers indicated their sales increased in 2019, whereas 13% had a decrease and 30% reported sales stayed the same.

Summary

With six years of data, this year provided an opportunity to look at price trends for each of the turfgrass species. Following several years of reducing acreage due to poor sod sales (largely due to minimum new construction), the last five years have been years for good growth in production, which has allowed some increases in sod prices. This last year saw some of the largest increases since the survey was started. In the past, weather events significantly impacted the region. In general, 2019 was a mild year without the significant tropical events such as we saw in 2018. Currently, the COVID-19 pandemic has not dampened sod sales to date as construction was deemed an essential function. Annual data provides some indication of sod supply and price in the near future. It is not known at this time how the pandemic will impact the building sector over the rest of year. The total acreage of sod seems steady with a small amount of growth. Most grasses seem to be in good supply for 2020; however, a high percentage of sod producers anticipate shortages for all the warm-season grasses. The bulk of sod sales (>66%) 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 or prices are expected to increase.