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rcreech
08-15-2008, 10:34 PM
Question for all you guys?

Yesterday it was a reality check for me when I went in to my Lesco dealer and seen where prices had gone.

I only needed 4 bags of a fert that I don't use regularly and it was $27.00/bag. I didn't get it either! :nono:

So.......this brings me to questions!

Do how long can our business be viable with this kind of input costs?

Hate to say this...but is this a good time to get out? If we have humongous increase next year and lose 50% of our customers, our business isn't worth JACK!

Reason I ask....our business is worth a lot while in tact. If prices go up accordingly, then we must also.
At $30/bag it will cost close to $100/acre (our cost in product alone). That means we would have to charge $200/ac to keep the same profit.

I do have my fert for next year, but still have to worry about replacing it. What do all of you think? Are you worrying about this as much as I am? :dizzy:

lilmarvin4064
08-15-2008, 10:57 PM
It's not good. We are going to lose customers. Many people are simply not going to be able to afford it. But there are always some that are willing to pay for a nice lawn no matter what the cost. These are the customers we are all going to be fighting for. Sell them excellent service and results and they will stay. easier said than done, I know. The only option to reduce our costs is to think of more inventive of ways of doing things + reducing costly inputs. Less P,K, and slow-release. more biosolids and iron. start thinking liquid. Improve your marketing skills.

ted putnam
08-16-2008, 01:11 AM
I'm not going to lie...I've lost a lot of sleep and some weight, more than the usual for this time of year:)worrying about this. I agree with lilmarvin. I've thought seriously about selling out. Problem is, I've put a lot of blood,sweat an tears into this and besides, I love my independence. I'll put my pencil to it again around Christmas an let the cards fall where they may. I've had some let downs this year already.#1 FERT PRICES skyrocketing.(Gobbled up my price increase in a hurry)#2 Prodiamine has let me down(22 inches of rain from 1st of march to mid april...for a state that normally gets 45 inches annually)...going back to split apps of PE-M. More broadleafs than in the past and now late germination of crabgrass running me ragged. Already working on streamlining processes and new program development for next year. May have to let my part timer go next year. Sure hope things get better:cry:
P.S. Interested in Phasthounds 16-2-3. Got a guy not to far away using it and have heard he's pleased. Concerned about longevity and cost effectiveness though(getting that 1#N per app)???

LawnTamer
08-16-2008, 02:36 AM
I am worried about it too. Our fert costs have skyrocketed. I went to someone's house to do an app. She apologized for not calling to cancel, but said her phone was disconnected, I noticed her power was turned off too, seems her husband had lost his job. Scary stuff.

Here's what I am looking at trying.

1. Diversify more. We have dabbled a bit in pest control, (I used to work for a pest control company). I don't like having to go into people's houses, but the material costs are very low. Also looking at pushing shrub and tree sprays more.

2. Find ways to use less fertilizer. I have been experimenting with this idea and having great results so far this year. We often set a plan, X amount of NPK and Fe per K, per app, but I think a lot of our lawns don't really need anywhere near so much, especially if the client is willing to mulch. I pushed mulching this year and have managed to use substantially less NP&K this year.

If I pull up to a lawn, and it is a new client, or the lawn is pale, I'll hit it at the full rate, but if it is green and healthy, utilizing nutrients well, then I go substantially lighter, and so far my lawns look every bit as good as last year. On average, I am using 30-35% less NP&K/1,000.

3. The one I hate! I am just flat out working harder. I am carrying the same load as last year, but with about half the help. I just lost both my helpers to school, usually, I'd hire at least 1 temp, not this year. I will be doing about 300 apps/month, which wouldn't be bad by itself, but I will also be mowing 55-60 accounts/week. Needless to say, I am scheduled to work every Saturday for the next 8-9 weeks.

greendoctor
08-16-2008, 03:35 AM
I am working in a market dominated by high volume, low prices and low quality. Also, there are no operations that do strictly applications. So I set myself apart by doing things different. No granules, no spot spraying. I am DOA certified and all of my clients see my license. They also know it is me who will be doing any applications. Not some illiterate labourer from a third world country who has no idea what he is doing or how to do it correctly. My prices are very high, so the cost of fertilizers had not hurt me. I use all liquids. Including 28-0-0 70% slow release triazone solution. Last time I saw my UAP rep, he told me some golf courses are starting to use the mix I use on fairways. Never thought I would see the day someone else in Hawaii would use a liquid. It has become too expensive to broadcast 16-16-16 at 250 lb/acre like how they used to when fertilizer was cheap. The one thing that hurts a little is the price of fuel. Filled up the truck yesterday, $140.

cod8825
08-16-2008, 08:41 AM
I know espicially on the thread that was stated about reconsidering next year with fert prices. I am going to look into using transition products. But my prices here are not increasing as fast as some areas so I still have a little buffer. I have thought long and hard about how to specialize in bed maintenance. Not sure how to sell it though. A lot of my clients simply do not have nice looking flower beds next to their pristine lawns.

Matt

Terraformer
08-16-2008, 12:18 PM
Question for all you guys?

Yesterday it was a reality check for me when I went in to my Lesco dealer and seen where prices had gone.

I only needed 4 bags of a fert that I don't use regularly and it was $27.00/bag. I didn't get it either! :nono:

So.......this brings me to questions!

Do how long can our business be viable with this kind of input costs?

Hate to say this...but is this a good time to get out? If we have humongous increase next year and lose 50% of our customers, our business isn't worth JACK!

Reason I ask....our business is worth a lot while in tact. If prices go up accordingly, then we must also.
At $30/bag it will cost close to $100/acre (our cost in product alone). That means we would have to charge $200/ac to keep the same profit.

I do have my fert for next year, but still have to worry about replacing it. What do all of you think? Are you worrying about this as much as I am? :dizzy:

Rod,

I've been reading all the posts about the "cost of doing business" for several months now. I have pretty much shut down my business for the summer, because of the high input costs. In my immediate area there have been a number of plant closings (IE., GM and Leer) and people are feeling the pinch.

While I understand the global market demand for N,P,K I do believe that JDL/LESCO, including many others, are going to shoot themselves in the foot come fall 2009. I say this because many farmers in my area are also complaining about the huge increase in fert and herbicide prices.

I am not going to ask home owners for a 3X increase in price come next year. I'll just wait it out.

BTW - I have delayed the purchase of a ride on fert/herbicide machine, because of the ridiculous prices. I'll continue to use my ATV for applications.

Lastly, you are correct in questioning the viability of business beyond 2009.

John

olive123
08-16-2008, 12:37 PM
my city buys from a bid list. To give you an idea, last years bid price was from lesco on 15-0-15 and was .223 per lb. 11.15 per bag. I was told that the bid price coming up for the new year is 39.00 per bag. I am glad i dont do those all inclusive quarterly fert and tree sprays anymore...:dizzy:

sclawndr
08-16-2008, 12:58 PM
Rising fert prices don't necessarily mean the end of the world. It does mean that after years of throwing fert around like money in a brothel we need to rethink what we're doing and the way we're doing it. CL and the other big guys have everyone, customers and smaller LCOs alike, so brainwashed to throw a pounf of N out on each app that you'd think it was written in stone somewhere. Nothing could be further from the truth. We've cut fert rates by 30% this year with no noticeable effect and plan to cut even further next year. If we're getting reasonable rain and the customer mows correctly, we're good. If it doesn't rain or the customer insists on poor mowing habits, then a pound of N wouldn't matter anyway. Either way, we keep our material costs in line.

Another option is to do some upselling - aeration for example, is a huge help to the yard and is very profitable. You could also consider perimeter pest control and tree and shrub spraying - both very profitable as well.

lawnproslawncare
08-16-2008, 02:09 PM
You guys should check with the john deere golf stores. They have been getting rid of chem and fert products this year like mad. Some stuff is under half off. I would bet this is due to the jd lesco merger

Az Gardener
08-16-2008, 03:00 PM
If I were in your shoes I would be focusing more on garden pest treatments both proactive like systemics and spot treatment for problem areas. I would then be marketing to tree trimmers, maintenance companies. Let them market for you to their existing customers. It is impossible to find someone to come out and put down some fungicide for a single tree or spray for spider mites etc.

rcreech
08-16-2008, 06:21 PM
I'm not going to lie...I've lost a lot of sleep and some weight, more than the usual for this time of year:)worrying about this. I agree with lilmarvin. I've thought seriously about selling out. Problem is, I've put a lot of blood,sweat an tears into this and besides, I love my independence. I'll put my pencil to it again around Christmas an let the cards fall where they may. I've had some let downs this year already.#1 FERT PRICES skyrocketing.(Gobbled up my price increase in a hurry)#2 Prodiamine has let me down(22 inches of rain from 1st of march to mid april...for a state that normally gets 45 inches annually)...going back to split apps of PE-M. More broadleafs than in the past and now late germination of crabgrass running me ragged. Already working on streamlining processes and new program development for next year. May have to let my part timer go next year. Sure hope things get better:cry:
P.S. Interested in Phasthounds 16-2-3. Got a guy not to far away using it and have heard he's pleased. Concerned about longevity and cost effectiveness though(getting that 1#N per app)???

My year has been identical! So funny!

I am glad to know that I am not to only one having these feelings!

What used to be so fun and enjoyable....is now keeping us all up at night! Go figure! :dizzy:

Oh well! It may get better down the road, but until then :drinkup:!

ted putnam
08-16-2008, 11:10 PM
My plan is to step up the marketing this next year. I'm going to follow the trends of the real estate market. Big homes/properties(160-300k) are just sitting in this area. It's the 100-160k homes that are moving. I'm going to concentrate(door to door) on neighborhoods with this price range homes and really focus on them closer to my base of operation. These neighborhoods tend to have smaller lawns and with my 3k minimum price, these are the lawns I make more money on anyway. Minimize costs, maximize profits. It's the best way I know of to keep going... It used to be that I didn't leave one of my promo piece's on the door if I knew the competition was doing it and they did a good job. That's all out the window! It's crunch time!

greendoctor
08-17-2008, 04:32 AM
If I were in your shoes I would be focusing more on garden pest treatments both proactive like systemics and spot treatment for problem areas. I would then be marketing to tree trimmers, maintenance companies. Let them market for you to their existing customers. It is impossible to find someone to come out and put down some fungicide for a single tree or spray for spider mites etc.

That is a core of my business. There is no one in town who will treat for mites, diseases or insect pests on trees and ornamentals. Not only do I leave my contact info with tree trimmers, maintenance companies and landscapers, I also have a good relationship with nurseries that are open to the public. If you saw the thread on extreme tank mixes, I am custom applicator for nurseries. If I can control it in a 1 acre field, a planting in a residential lot is no problem either. Several of my clients got my name from a nursery after asking them about a pest problem on their trees or shrubs. In many cases, once I have controlled the initial problem, I am asked to take over the fertilization and pest control for their entire lawn and landscape. Their existing landscaper or yard service does not treat for pests or is not qualified to do it. I do face lots of resentment and resistance from others in the industry here. However, I do not install landscapes, irrigation systems, I do not even mow lawns. I am also not cheap, so the issue of undercutting or lowballing is off. My existence is based on providing health management for a lawn and landscape. It does look bad when the other guys show up with a hand sprayer and spreader from HD. I show up with power sprayers and spray guns that are not sold in Hawaii.

superchad
08-17-2008, 10:13 AM
I'd hate to say it but I've been going to a chain store now. The product spreads great, is made by the same company as the fert supplier I was getting it from.Plus it was on sale for a week and I paid about .90 per 1000sqft. They looked at me funny when I asked how many pallets they had and I said I'd take them all.The lawns I've done with it look great. It is now about survival. I too have had long restless nights this year about what to do. This might be my last year too. At this point I'd almost would like to just go work in a factory. If the factories could only guarentee that they will stay open. Losing between 500-1000 jobs statewide monthly here.

markmarcywhite
08-17-2008, 10:31 AM
Fertilize was overly used and somewhat wasted before. We would purchase whatever the local co-op had and with 15-15-15 it took 300lb to get enough N. Now we just have to plan ahead with bulk purchasing and specialized formulations

rcreech
08-17-2008, 11:47 AM
Fertilize was overly used and somewhat wasted before. We would purchase whatever the local co-op had and with 15-15-15 it took 300lb to get enough N. Now we just have to plan ahead with bulk purchasing and specialized formulations

I don't think we (or myself anyway) have ever "overly used" fertilizer as "more isn't better" and it has always been our biggest cost!

If you are applying 300# of Triple 15 then you are! That is definitly not the product of choice for most lawns. It really isn't even good for a starter!

About the only thing I would recommend Triple 15 for would be a garden as it is just a good "general use fert", but not the best on most lawn situations year around!

1) Unless your soil test levels are low in P and K...you are applying way too much P and K to meet your N requirement.

2) You are paying for way too much filler! Buy elements....not pounds!

3) It is not best for the lawn to have all MINERAL N. You need to look at using a slow release N for exteneded feeding!

markmarcywhite
08-17-2008, 02:50 PM
That is what I was saying. We wasted fert because we didn't plan properly. We started the season off with triple 15 cause the local distributors were farm supply's and the bagged material were for gardens. Since the price has doubled for fert we have ordered fert formulations that best work for our customers. Increased N and lowered # per acre. Added 5% iron and 30% slow release on summer apps.
We moreless started taking this part of the business more serious. We went from about 15-20 accounts in 07 to 35-40 accounts in 08.

Pilgrims' Pride
08-17-2008, 03:37 PM
[QUOTE=Terraformer;2468912]Rod,

many farmers in my area are also complaining about the huge increase in fert and herbicide prices.

I am told by one of the vendors that I buy from locally that there are actually many local farmers here who didn't/aren't fertilizing their fields this year due to fert prices.
Instead they are relying on existing soil fertility.

ted putnam
08-17-2008, 04:11 PM
Funny the things you hear. I've heard that a couple of farmers in my area booked their fert early at a cheaper price. Saw the huge increases coming and sold the fert they booked, didn't plant a crop and made more money selling the fert than the would have planting the crop

rcreech
08-17-2008, 08:35 PM
Not putting on fert is totally crazy! :dizzy: Why even farm or if you are not going to do it right!

It costs so much to put out a crop now that you have to try and get all you can. Not putting on fert is suicide unless soil levels are off the charts high!

With the crop prices that we have you don't want to limit the crop in anyway. The only limiting factor that there should be is WEATHER!

Even though fertilizer is increasing in cost...it still only cost between $50-70/acre (dry only).

That is only 10-12 bu of corn...but if you don't have adequate levels it could cost you mega.

Say it cost you 30 bu (which is probably conservative) then it cost them $150not to put on fertilizer.

Around here that would NEVER happen....or atleast the guys that know what they are doing.

You have to spend money to make money!

tremor
08-18-2008, 02:12 PM
Well spoken rcreech. Words to live by.