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EAST DUNDEE, Ill. – Warren Bell, President of Turfgrass Producers International (TPI), has offered insight into the challenges that he believes turfgrass sod producers and the green industry as a whole may have to face in the coming year. In his annual state of the industry report, Bell provided his perspective on the industry and outlook for 2006.
“Any attempt to forecast what a coming year may have in store for turfgrass producers and the green industry is always a challenge and 2006 certainly isn’t an exception,” Bell said in his report. “A projected slowdown in housing starts, the cost and availability of labor, increasing insurance and health care costs and many other economic indicators can leave you scratching your head. Add to that the numerous forecasts and predictions of respected economists and industry professionals and you could become a bit overwhelmed. The key in projecting what the future may offer requires that you take into account all the information that’s available, keep it in proper perspective, and evaluate the information so you can plan effectively based on what might or might not unfold.”
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UPCOMING CHALLENGES. Bell said the White House projected the U.S. economy would expand 3.4 percent in 2006 and would record a growth rate of 3.5 percent for 2005. He added, “Reuters news service commented that despite the vibrant growth, many Americans have been anxious about rising oil prices, a reality that certainly impacted the agriculture industry and business and commerce nationwide in recent months.”
According to Bell, another economic equation that has to be taken into account is new home construction. David Seiders, Chief Economist for The National Association of Home Builders (NAHB) is quoted as saying, “We see a flattening of housing starts and the beginning of a cooling process.” Seiders’ forecast predicts housing construction would drop by 4.8 percent to around 1.92 million starts in 2006.
Other considerations Bell referred to include a mixed labor market, unpredictable energy prices and changing interest rates. In an interview with Lawn & Landscape, Bell said he expects the cost of oil – diesel more than gasoline – to have the biggest negative impact on the industry.
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“Out here in Utah, we hired an ag economist from Utah State to work with us and try to help us understand the relationships with price increases in gas and diesel and the overall impact it would have on turf producers in our area,” Bell says. “What he told us was pretty staggering. When one considers the cost of transporting your products, turf prodution and trucking, fuel to run around and visit customers and the very important impact of how these prices affect your employees’ daily lives, we’re looking at an increase of about half a cent per square foot on our cost of operation.”
Bell emphasizes that increased costs will affect every company differently depending on their location and their advance planning. He notes that his own company, Biograss Sod Farm, Sandy, Utah, is already working to offset costs.
Additionally, while the economic factors listed above certainly have to be taken into consideration to project what 2006 might have to offer, Bell notes there are some positive factors worth mulling over that create a more promising picture.
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POSITIVE POTENTIAL. For example, a recent survey conducted by Project EverGreen at the 2005 Green Industry Expo in November provided some pleasing results. The survey, conducted by Market Intellect revealed that “the nation as a whole thinks strongly of the green industry, despite what media reports imply,” according to Gene Brown, CEO of Market Intellect. Survey recipients were asked if they agreed or disagreed with several statements and ultimately gave extremely positive responses. More than 80 percent agreed that most lawn care companies care about the environment and agreed that maintenance of public parks and sports fields is good for the environment. Ninety-nine percent of those surveyed agreed that landscaping adds value to a home’s worth and a well-maintained landscaped yard increases curb appeal and property value.
(Click here to read the full Project EverGreen survey results.)
“Thanks to the efforts of organizations like Project EverGreen, Responsible Industry for a Sound Environment (RISE); The Professional Landcare Network (PLANET); Turfgrass Producers International (TPI) and numerous trade and consumer publications, there is a collective effort to address sensitive issues intelligently and with valid research,” Bell says. “The benefits of turfgrass and the positive environmental impact of green space is a message that needs to be communicated to consumers, industry professionals, educators and legislatures.”
INDUSTRY ADVOCACY. Green industry legislation and advocacy are also among the issue Bell says should be priorities in 2006. “In looking ahead to 2006, one has to consider recent events that may influence decision makers in the coming year,” he says, noting the value that PLANET’s annual Legislative Day on the Hill brings to making industry issues heard on Capitol Hill.
“This was an opportunity for our members to see how Congress works and to lobby their elected officials on issues facing our industry,” explains Tom Delaney, director of government affairs for PLANET. “This is also how legislators become aware of the issues facing small businesses as well as larger corporations in the green industry.”
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Similarly, in September 2005, representatives of the turfgrass industry had a face-to-face meeting with Secretary of Agriculture Mike Johanns to discuss the turfgrass industry and the National Turfgrass Research Initiative (NTRI). During the course of that meeting the Secretary was provided with current information conveying the breadth and scope of the turfgrass industry and its importance to the U.S. economy, restrictions and/or regulations that challenge the turfgrass industry, and the need for government support in the area of basic turfgrass research to address issues facing the industry.
“We have so much tremendous scientifically based data supporting the fact that green landscapes are healthy, not only to the environment, but also to people’s lifestyles and to the economy,” Bell tells Lawn & Landscape. “The turf industry is a $40 billion dollar part of the U.S. economy, but that’s not common knowledge. That makes advocacy of our industry within the legislative process industry so important. While a lot of people have become cynical over the years with the political process, we actually have the best political system imaginable because of that opportunity to have face to face time with our legislators. As a constituent, my senators and my congressional delegation have shown that they appreciate meeting with me and they really do listen to what we have to say. More of us need to show up and let them know what we’re interested in to ensure that things like the NTRI continue to help our industry.”
FACING THE CHALLENGES. Bell says weather will be, as always, an unpredictable factor throughout 2006, but that learning from the monstrous weather events of 2005 can help in the new year.
“There’s no denying that the global natural disasters of 2005 impacted the lives of families worldwide and recent natural disasters in the U.S. impacted our nation’s economy and the lives of thousands of families in ways that are far too numerous to mention,” he says. “What 2006 has in store for us in terms of weather is anybody’s guess. As for those opportunities to be realized in the coming year, a great deal depends on how well we plan, our ability to anticipate the possibilities, how well we adapt to change and our readiness to expect the unexpected.”
Considering the size of the industry - $40 billion, with contributions of an additional $147 billion in related business – as well as its environmental significance and scope, Bell says it is apparent that to increase business, the industry must continue to send a positive message on the benefits of turfgrass and green spaces.
“If we commit ourselves to address these challenges through effective communication, we can soften the blow of any less than promising economic forecast and most certainly reap the rewards that come with positive economic growth,” said Bell, noting that TPI will spend 2006 continuing to build on its developing relationship with extension specialists, county agents, university researchers, scientists, educators and the general public. Moreover, Bell encourages all industry professionals to participate in industry and business associations at all levels to help increase the industry’s professionalism.
“In my view, professional trade organizations are absolutely critical to the success of a business,” Bell tells Lawn & Landscape. “It’s about education and conferences, staying abreast of things like the impact of fuel prices and rising interest rates and what that’s going to do. Associations are great at keeping tabs on how these economic factors are affecting their members and can often provide opportunities to help members manage their effects throughout the year.
“The most important thing that trade associations do that can’t be duplicated is the networking,” Bell continues. “Maybe the term is overused, but there’s something to be said about people working together and actually making friends. For instance, David Diamond who’s president of the Florida Sod Growers, and I have eight to 12 hours a day in common with one another and that’s help us develop a great, solid friendship. We’re in entirely different markets, so we’re not competing with one another and we can share information that can really help each other and the industry – and the depth of the information grows as our friendship grows. Trade associations are a key vehicle in bettering the industry and I think if we all set aside our differences and concentrate more on the things we have in common, everything else will fall into place.”
Bell is the co-owner of Biograss Sod Farm located in Sandy, UT. He is TPI’s 35th president. Turfgrass Producers International is a 38-year-old, independent, not-for-profit association representing more than 1,100 members from over 40 countries comprised of turfgrass sod and seed producers, equipment manufacturers, suppliers, educators and professionals involved in the green industry.