Aside from the weather halting the start of the season, Chris Eggen, of K&B Tree and Lawn Care in Wisconsin, says fertilizer prices have been a constant challenge in years past.
“The last few years, the biggest thing has been the volatility of fertilizer prices,” he says. “Fertilizer is a petroleum-based product, so with oil prices and all the uncertainties in the market worldwide… that puts such a big wrench into the making of the base products for fertilizer.”
Eggen adds it’s especially bad in their market, where they are competing with another major industry for an already limited supply of products.
“Unfortunately, in the agricultural area where we are, that determines what they’re going to be planting and what products they’re going to be using to fertilize those crops, then with lawn care even though we’re a rather large industry, we’re small compared to the agriculture industry,” he says. “They really control things. They get first dibs on certain products.”
All this uncertainty makes it especially hard to budget and determine pricing, Eggen says.
“It was hard for the industry to know what’s your price point going to be for your product and then also your fuel to put in your trucks day-in and day-out going up,” he says. “So, a lot of that over the last couple years has been so skewed.”
However, Eggen expects brighter days ahead and says this season shouldn’t face the same problems.
“Fortunately, this year we’ve seen it relax,” he says. “Everybody that I’ve talked to and my suppliers, have seen a substantial decrease and stabilization of it. I think that’s going to help everyone be able to still be profitable but not have to raise prices so much.”
Eggen adds that for some smaller companies, the ever-changing price of fertilizer was even harder because they could only order so much at once.
“Obviously, the bigger you are the better price breaks you can get when you order,” he says. “Compared to somebody that’s a one truck unit, we’re bigger than them, but at the same time, we’re getting a semi-load of fertilizer and then waiting a month and getting another one… but we aren’t so big that we have our own warehouse full of fertilizer that we can lock in at a reduced rate and keep our price that much lower.”
He adds that he was grateful they had a little bit of storage room to hold onto a little extra product during the last few seasons.
It’s not just fluctuating fertilizer prices that are impacting the lawn care industry, but fuel and seed prices as well, Eggen says.
“The biggest thing for us has been the volatility of what’s the price going to be next month let along next week,” he says. “It’s even impacting grass seed, too. With all the forest fires out west, seed prices doubled. That put a big strain on us, but it’s a crop so you’ve got to wait for the next crop to be harvested so they can recoup their supply chain.”
Eggen says the company’s only option has been to take the price increases in stride and still try to have an affordable service.
“We can still give customers a well-rounded application without breaking the bank,” he notes.