• Topics: Food and Resource Economics  | Sod Industry  |  Cisar, John L  |  Haydu, John  | Satterthwaite, Loretta N 

An Economic and Agronomic Profile of Florida's Sod Industry in 2003¹

The following is the abstract of a much larger report, which is only available in pdf format. To access the complete report, please click here or go to (http://edis.ifas.ufl.edu/pdffiles/FE/FE56100.pdf).

Executive Summary

Roughly 125 producers comprised Florida's sod production industry in 2003, producing an estimated 93,000 acres of sod and harvesting nearly 63,000 acres. Of the total quantity of sod produced, 73 percent was grown on sand-based soils while 23 percent was produced on muck soils, particularly around Lake Okeechobee. St. Augustinegrass accounted for 64 percent of total production, followed by bahiagrass (24 percent), bermudagrass (6 percent), centipedegrass (5 percent), and a nearly insignificant amount of zoysiagrass (1 percent). In terms of St. Augustinegrass, Floratam dominated all grass varieties.

Although sod is distributed through numerous market outlets, in 2003, most (73 percent) was sold to the new housing market, 24 percent was targeted for re-establishing existing home, and the remaining went for "other uses". To handle all the various tasks related to the production and selling of sod, the industry uses substantial labor. In 2003, the average farm employed 20 full-time, 1 part-time, and 2 seasonal workers. This number represented an employment increase for 25 percent of the farms compared to three years ago and no change for 63 percent of the farms.

Florida sod producers harvested and sold most of the grass grown, varying from a low of 24 percent for bahiagrass to a high of 84 percent for St. Augustinegrass. Sod prices, lower than those of 2000, ranged from nearly 4 cents per square foot for bahiagrass to 20 cents per square foot for zoysiagrass. St. Augustinegrass held the middle ground at 12 cents per square foot. Using these prices in conjunction with harvest volumes, the farm gate value of sod was estimated at $307 million in 2003, the same value as in 2000. Sod production maintains its place as a major agricultural commodity in Florida.

Finally, producers identified several problems that affected business performance. The significant problems for individual businesses were financial-related issues such as fuel and insurance costs, dishonest businesses, and excessive labor costs. An ability to acquire adequate "legal" labor was also cited as a difficulty. Problems facing the industry as a whole were perceived to be marketing-related (overproduction, lack of advertising, lack of consumer education) and regulatory-related (mainly water issues).

Keywords: sod production, harvested sod, farm size, mechanization, farm income, farm expenses, marketing, shipping

Introduction

In 2003, Florida ranked as the fourth most populous state in the United States, with 17.2 million people and an annual growth rate of 2.4 percent (Office of Economic and Demographic Research, 2005). Due, in part, to these two factors, sod has become an increasingly important component of Florida's urban landscape. The affinity homeowners have for green lawns, combined with the need for high-level maintenance, has resulted in a very large, robust, and economically important turfgrass industry. Results of a comprehensive economic impact study conducted in 1992 (Hodges et al., 1994) underscored the diversity and magnitude of the industry. The total turfgrass area used and maintained in Florida in 1992 was about 4 million acres, with 75 percent of this area in the residential (household) sector. Turfgrass industry employment was 185,000 full-time and part-time workers, or 130,000 full-time equivalents. Water used for turfgrass irrigation in the commercial sectors was about 1.8 billion gallons per day, with 58 percent from groundwater source. Consumers spent $5 billion on turfgrass maintenance, or about $1,200 per acre. Sales of turfgrass products and services by producers and commercial distributors totaled $6.5 billion, with $2.1 billion in cash expenses for purchased items. Turf-related (non-land) assets in equipment, irrigation installations, and buildings had a book value of $8.6 billion. Value-added to Florida's economy by all sectors of the turfgrass industry totaled $7.3 billion, with golf courses contributing 35 percent, and service vendors and households contributing 21 percent each.

Market demand for sod can be roughly estimated by examining the number of new housing starts. The U.S. Census Bureau estimated 156,800 single-family housing starts and 56,700 multi-family housing starts in Florida in 2003 (U.S. Census Bureau, 2004). Assuming sod would be used on 0.25 acres per single-family unit (which includes both individual lot and "common areas"), this figure translates into 39,213 acres of sod required annually for this market. Assuming half the area allotted for sodding for single-family units and common areas would be sodded for multi-family housing units and their common areas (or 0.125 acres per unit), this equates to 7,089 acres, for a total of 46,302 acres of sod needed. Roughly another 20 percent of sod not included in this calculation is targeted for other outlets—including golf courses, commercial and non-profit institutions, and existing homes—for an estimated 55,562 acres statewide in 2003.

In late 2004, another University of Florida survey on sod production and marketing was completed. The purpose of this study was to provide sod businesses, allied firms, industry leaders, university researchers and specialists, and state policy makers with current agronomic and economic information on this important agricultural sector. The full report begins with a discussion of the methodology employed in the survey and then examines research findings in the areas of production, employment, marketing, product quality/price information, and perceived firm-level and industry-level problems; this is a condensed version of that report and gives highlights of the findings. The full report can be found online at http://edis.ifas.ufl.edu/pdffiles/FE/FE56100.pdf and also at http://hortbusiness.ifas.ufl.edu/research.htm.

Results

Acres Grown and Harvested

Information on Florida sod production by grass type is shown graphically in Figure 1. More detailed information is presented in Table 1 on total sod acreage, soil type, and grass varieties. Using the appropriate expansion factors, total sod produced in Florida in 2003 was estimated at 92,990 acres.

Figure 1. 

Types of grasses grown in Florida in 2003 as a percentage of total production.

Farm Size and Varietal Comparisons

Farms comprising the largest size category (8 percent of all firms) dramatically increased their share of total industry output from less than one-third to nearly one-half (48%) while all other size classes reduced their share of production.

From a marketing perspective, it is useful to examine how producers of various size classes alter their product mix over time. Each grass variety has different production characteristics such as longer or shorter growing periods, more or less disease resistance, and greater or lesser tolerance to drought stress. Similarly, each grass represents a unique market niche. St. Augustinegrass is targeted primarily for the homeowner market, centipedegrass and bermudagrass are grown for athletic fields and golf courses, and bahiagrass is used for erosion along the state's many roads and highways. What a producer ultimately decides to grow will be influenced by both production and marketing characteristics, including the extent of a firm's physical and capital resources.

Farm Size and Soil Type

Sod is grown on either sand (mineral) soils or muck (organic) soils. Of the roughly 93,000 acres, 73 percent was produced on sand, with the remainder on muck soils (23 percent) or clay soils (3 percent). Muck soils are typically found in Florida's Everglades Agricultural Area (EAA) that lies below Lake Okeechobee in the southern part of the state and the low-lying fields surrounding Lake Apopka in the central region.

Placement of sod farms in the state was obtained by asking survey respondents to note in which of eight map regions, roughly based on telephone area codes (combined in some instances), their farms were located. Unexpanded acreage located by this procedure is shown in Figure 2 and suggests that the majority of production is concentrated in southern Florida.

Figure 2. 

Reported acres of sod production in various regions in Florida in 2003.

Industry Value

Average prices, weighted by production volume, were used to calculate the value of the sod industry in 2003 (Table 2). Harvest value, the quantities actually sold in 2003, were estimated at $307 million, the same as in 2000, despite more acres being harvested, because of lower prices received. Nevertheless, sod still remains a top-ten agricultural commodity in Florida. Eighty-five percent of harvest value was attributable to St. Augustinegrass ($262 million), only a slight increase from its 81 percent share in 2000 and in 1996. Bermudagrass ($17.7 million) was the second most valuable sod variety, with a 6 percent market share. Centipedegrass at $9.2 million and bahiagrass at $8.5 million each had a 3 percent market share and remained slightly ahead of zoysiagrass ($7.6 million), which holds a 2.5 percent share of the market.

References

Hodges, A.W., J.J. Haydu, P.J. van Blokland, and A.P. Bell. 1994. Contribution of the Turfgrass Industry to Florida's Economy, 1991-92: A Value-Added Approach. Economics Report ER-94-1, Department of Food and Resource Economics, University of Florida, Gainesville, FL.

Office of Economic and Demographic Research. 2005. http://www.state.fl.us/edr/population/popchange0502.pdf.

U.S. Census Bureau. 2004. http://www.census.gov.

Tables

The Institute of Food and Agricultural Sciences (IFAS) is an Equal Opportunity Institution authorized to provide research, educational information and other services only to individuals and institutions that function with non-discrimination with respect to race, creed, color, religion, age, disability, sex, sexual orientation, marital status, national origin, political opinions or affiliations. For more information on obtaining other extension publications, contact your county Cooperative Extension service.

U.S. Department of Agriculture, Cooperative Extension Service, University of Florida, IFAS, Florida A. & M. University Cooperative Extension Program, and Boards of County Commissioners Cooperating. Millie Ferrer-Chancy, Interim Dean.

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