2008 Fertilizer Prices - Major Increases

Discussion in 'Fertilizer Application' started by master gardener, Feb 3, 2008.

  1. golfguy

    golfguy LawnSite Member
    Posts: 108

    I understand the no storage part as I struggle with it every season. As far as not having forks, most companies here have self unloaders similar to what sod companies have. If you request this service they should grant it.

    I highly recommend for you to buy a few other products and try them on your lawn and the lawns of family or close friends. You must see results for yourself to get over the cost per bag or cost per thousand.

    For example if product a cost 18 dollars a bag and lasts for 8 weeks and product b is 24 dollars and lasts 12 weeks product b actually works out cheaper per week.

    In this case, you would charge just slightly more per app and make less apps per season. Homeowner does not see a bill increase and you make more money.
     
  2. rcreech

    rcreech Sponsor
    Male, from OHIO
    Posts: 6,045

    QUESTION:

    I think it would be very difficult to sell a service and not have your fertilizer price "locked in".

    With the fert prices being so volatile...it is kinda risky IMO to sell something where you haven't "fixed" your cost.

    To me...you have to know your costs to set your prices.

    Does this make those of you that "buy as you need it" nervous?

    What if for some reason the price would go up another 20% in season (which could happen)?

    You may not be able to store all your fert...but would your suppliers let you buy all your tonage at once and maybe give you a better price?

    Just curious!
     
  3. LIBERTYLANDSCAPING

    LIBERTYLANDSCAPING LawnSite Bronze Member
    from Indiana
    Posts: 1,283

    The higher your margins, the more insulated you are from this.

    If I was doing 1/2 acre lawns for $50~55/ app. like some guys around me, I'd be really concerned........But I don't.
     
  4. ted putnam

    ted putnam LawnSite Platinum Member
    Posts: 4,539

    Agreed, same here,but I don't have anyone around me that is that cheap! TG sometimes, but then again, you get what you pay for!
     
  5. Penscape Landscaping

    Penscape Landscaping LawnSite Senior Member
    Posts: 357

    Fert guy told me today that he had a phone call and all starter is going up 7+ a bag due to shortage!
     
  6. rcreech

    rcreech Sponsor
    Male, from OHIO
    Posts: 6,045



    I agree...but you didn't answer my question.

    No matter if you have your products bought or not....you can only charge what the market will bear!

    Therefore your "margins" shouldn't be any better.

    So again....is this something that you worry about? If a bag of fert goes up $4 a bag that is $12 increse/acre. That is big!

    BTW....Who in their right mind could charge 50-55 for a 1/2 acre? Is that what they are charging in your area?
     
  7. ted putnam

    ted putnam LawnSite Platinum Member
    Posts: 4,539

    My margins are high enough that $12 per acre is not going to "break the banK". True, one can only absorb so much increase before something would have to be done to bring your margin back in line. Honestly though, if things really get that crazy we're all in trouble. Besides, all you've really done by buying your fert in advance is bought yourself a time cushion against increased prices.Once that cushion is gone, you're in the same boat as everyone else. If fert prices are still high when the cushion runs out you have to increase your price to make up the difference just like everyone else. My cushion is my margin...
     
  8. Whitey4

    Whitey4 LawnSite Silver Member
    Posts: 2,448

    Rodney, for you guys doing large properties, huge amounts of acrage, it's an issue.

    For me, it sill is, but it won't potentially break my back. I can do about 5 accounts with one 50 lb bag. If a bag goes up $5, that's a dollar an app I've lost. I have that kind of wiggle room. My customers want to know what I will charge for the season, so I stick my neck out, but the axman only has a butter knife, not an axe. It will leave a mark, but not too bad. So, if my material cost per app goes from $5 to $6, I can absorb that.

    Those economics won't work on 1 acre or larger accounts. Another reason I don't want commercial accounts around here. Cost, and I don't have the equipment for anything that big.
     
  9. Hissing Cobra

    Hissing Cobra LawnSite Senior Member
    Posts: 700

    Who's the supplier and what brand of fertilizer?
     
  10. rcreech

    rcreech Sponsor
    Male, from OHIO
    Posts: 6,045


    My margins are pretty darn good, but $12/acre over large amounts of acres would still hurt VERY, VERY bad!

    I am just asking the question as it popped in my mind why reading this post this evening.

    So what you guys are saying is that it doesn't matter if prices go up....or they won't kill you if they do. That is great....but I was just wondering.

    My prices are very good for my area....but if I didn't have my prices fixed I would personally be a little nervous.

    I remember my first year I bought my fert like 2 pallets at a time and every time I went in the price went up. I remember sitting with a calculator and figuring up all the $$$$ left on the table.

    I guarantee if you could buy early and in larger quantities you could pay for a very nice building in just a couple years.

    You make a good point about after the stock is gone that we are all in the same boat, but I would just raise my prices accordingly for the new year just like I did this year.

    I am talking about getting large IN SEASON increases though.
    If you had to...I guess you could do so in season and tell your customers why.

    Was just wondering!
     

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