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Commercial turf production – infrastructure and management

By | February 4, 2013 at 10:28 am | No comments | Provisioning

Infrastructure

Buying the infrastructure and equipment to undertake turf production can be costly. Some activities, such as sprigging, can be contracted out; however, significant efficiencies are achieved in larger-scale, well-capitalised operations with specialised equipment. This can make it difficult for smaller producers to compete. The capital items and variable expenses indicate what might be needed for a smaller enterprise.

  • Capital items (equipment list)
  • Variable expenses

Labour

The average turf farm in Queensland employs the equivalent of two full time staff, plus casuals. Many farmers supply a turf laying service, which involves either employing and managing your own team of labourers, or hiring a contractor. In a competitive labour market, sourcing and retaining skilled labour is a concern for some producers.

Some areas of farm operation are expensive if they are inefficient. One such area is the manual stacking pallets at harvest, which is the single greatest use of labour. Poor farm layout can also increase costs by increasing the travel time between tasks.

Marketing and finances

Input costs, such as labour, fuel, fertiliser, insurance and equipment, are rising at a faster rate than the returns achieved for turf. Many people in the industry are not aware of what their real costs are. In some areas, there is over-production relative to the local demand. This is frequently followed by price cutting to move product and undercut the competition. In this scenario everyone loses.

Within the turf industry, it is common for producers to sell directly to customers. A common strategy is to bundle services such as site preparation, installation and after-care into the sales mix. Discounts are offered where add-on services are purchased.

In an Australia wide survey, 65.5% of variable costs were tied to production, 27.5% to administration/sales/marketing and 7.2% of costs to landscape services (Aldous et al. 2007). Businesses that sell direct need to invest in advertising and use other marketing techniques. Bigger operations will employ a sales manager. An accounts officer is needed to issue invoices, collect money and follow up on overdue accounts.

35% of turf sales are direct to homeowners. These sales attract a higher price as they are targeted at retail level; however, these sales are time consuming and incur more transaction costs. Other sales are to:

  • landscapers (20%)
  • developers (18%)
  • retail garden centres (11%)
  • other turf farms (7%)
  • golf and sports surfaces (5%)
  • brokers (3%).

Some growers act as satellite sites for big turf farmers. Turf is sold under contract, normally at a discount, to larger growers for distribution by them. This gives the larger turf producers the option of tendering for very big contracts and allows the small grower to focus on the production side of the business.

Larger turf farms are able to implement economies of scale and have better access to improved varieties. Their greater capitalisation and improved logistics allows them to transport product over greater distances and even to gain entry into specialised export markets.

Water issues

Access to water for growing turf has been a major concern for South East Queensland producers. Water restrictions have compounded the problem by impacting the ability of customers to establish and maintain turf. This caused a depression in demand in affected areas, until permanent water restrictions were recently eased.

Land use 

Check with your local council’s planning department to see if a material change of use approval is required before entering into turf production. Depending on the circumstances, this can prove expensive if, for example, an environmental impact statement is required.

 

References

These are only a small selection of the publications available.

Aldous, DE, Haydu, JJ and Satterthwaite, LN 2007, ‘Economic analysis of the Australian turfgrass industry’, Project TU06004, Horticulture Australia Limited.

Department of Employment, Economic Development and Innovation 2009, ‘Prospects for Queensland’s primary industries 2009-2010‘, Queensland Government, Brisbane.

Beard, JB 1973, ‘Turfgrass: Science and culture’, Prentice Hall, New Jersey, USA.

Handreck, KA and Black, ND 2002, ‘Growing media for ornamental plants and turf’, University of New South Wales Press, Sydney.

Spencer, J 2002, ‘The definitive guide to Australian turfgrass pesticide management’, Glenvale Publications, Melbourne.

Turgeon, AJ 2008, ‘Turfgrass management’, Pearson Prentice Hall, New Jersey, USA.

Other organisations

 

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