52% Increase

Discussion in 'Pesticide & Herbicide Application' started by ted putnam, Jan 3, 2008.

  1. ted putnam

    ted putnam LawnSite Platinum Member
    Posts: 4,541

    I sent my prepay letter out last week with a substantial increase thinking I had covered my assets pretty well...Boy was I wrong! Prices had gone up before Christmas but I was told the dust wouldn't settle until after the first of the year. I went in today to buy supplies for Round 1 and see where I stood. Not good! to say the least. I was told where prices are now is pretty stable unless an earth shattering event happens in the near future. Prices may go down a little after the Spring "rush" on fertilizer and that was a very unsure maybe. My hats off to those who bought their product early. God help you if you run out. Those who were told you could buy your product in 08 at 07 prices... I wouldn't believe it unless I had it in writing!
     
  2. grassguy_

    grassguy_ LawnSite Senior Member
    from Ohio
    Posts: 633

    Ted,
    I know what you mean about jumping up after the new year too. I mailed my renewals with an increase but now looking at increases it surely wasn't enough. but they were told in the letter too that if they didnt renew by Jan 26th, their price could go up again! After all, MY PRICES HAVE!
     
  3. LawnTamer

    LawnTamer LawnSite Gold Member
    Posts: 3,988

    I wish I could still get fert. for the same prices as 5 years ago. If I'd had a crystal ball, I would have built a 1,600 storage shed and filled it to the rafters with fertilizer.
     
  4. ted putnam

    ted putnam LawnSite Platinum Member
    Posts: 4,541

    Good way to cover yourself. I Knew my increase was probably not going to be enough so I allowed myself another 1-2% "cushion". I guess that was gobbled up and spit out in short order on Wall Street. You can't go up 40-50% in one wack . They'd be jumping ship left and right. I've lost 6 in 4 days. I told my Lesco guys to kiss me on the back of the neck when they were done:laugh:You gotta laugh about it. The only thing else to do is:cry:
     
  5. ted putnam

    ted putnam LawnSite Platinum Member
    Posts: 4,541

    That's what I was gonna try to do this year, building the shop that is. It'd be nice to be able to fill it with fert too. I'll have to wait a little longer. I'll tell you what els I'm going to do to make up some of the shortfall. My price list for new customers coming on board is about to be revised, if you know what I mean!
     
  6. Hogjaw

    Hogjaw LawnSite Senior Member
    Posts: 386



    r e v i s e i t n o w T e d

    they will come....................

    always be prepared for some may have comments....................
    some good.......................
    some bad..........................
    they may .........................:walking::cry::laugh::laugh::laugh::laugh:
     
  7. PHS

    PHS LawnSite Senior Member
    Posts: 724

    Ted (and others too), How much have you increased your total price in relation to how much your cost has gone up?

    Just to make up some numbers, say my original price for the job was $40 and my material cost was $10. If your cost increased 50% to $15 are you trying to increase your price by 50% too to $60?

    I let everyone know that there may be a material surcharge because of the market to cover my cost. Since I don't like trying to guess what the price of materials will be I figured that was the most equitable option. Since my profit was calculated on the $40/$10 scenario, if cost goes to $15 then I bill at $45. Is that reasonable or am I missing something?
     
  8. Ric

    Ric LawnSite Fanatic
    Posts: 11,957

    Here are the current prices and history of fert commodities. 52% increase appears to be a little short of current market increases in the last year. However I also have decided to eat some margin in order to stay competitive.

    Product This Week, Late November, This Week Last Year

    Ammonia $625.00 $580.00 $370.00

    Urea $490.00 $440.00 $280.00

    UAN Solutions $11.15/unit $10.60/unit $6.25/unit

    DAP/MAP $535.00 $490.00 $280.00

    Potash $395.00 $360.00 $210.00


    .
     
  9. mikesturf

    mikesturf LawnSite Senior Member
    Posts: 795

    I'm planning on doing more advertizing for core aerations to offset the lose in fert business.
     
  10. Ric

    Ric LawnSite Fanatic
    Posts: 11,957

    For those who don't want to do the math here are the percentage of increase since last year this time.

    Ammonia ^ 59.2%

    Urea ^ 57.1%

    UAN Solutions ^ 56%

    DAP/MAP ^ 52.3%

    Potash ^ 53.1%

    Of course the First big question is How Much Higher Will Prices Go. Followed by How Much More Will Consumers Pay For Green Lawns, They can't eat Grass.
     

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