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Contribution of the turfgrass industry to Florida's economy, 1991-92: A value-added approach

A.W. Hodges, J.J. Haydu, P.J. van Blokland, and A.P. Bell
University of Florida
Institute of Food and Agricultural Sciences
Food & Resource Economics Department
Published as Economics Reoprt ER 94-1, Copyright © 1994

Acknowledgements

The authors wish to thank the Board of Directors of the Florida Turfgrass Association, Inc., and the Florida Turfgrass Research Foundation, Inc. for their vision in initiating the partnership with the University of Florida to conduct this comprehensive study of Florida's turfgrass industry. Further, the authors thank the Florida Turfgrass Research Foundation and the Florida Agricultural Experiment Station for the funding and resources provided for this research.

Table of Contents

Abstract

The contribution of the turfgrass industry to Florida's economy in the 1991-92 fiscal year was evaluated by means of a comprehensive statewide survey undertaken during 1993 and 1994. The survey was designed to separately estimate the impacts of eight different sectors of the industry: sod producers, turf-product manufacturers, wholesale/retail distributors, service vendors, commercial institutional turf product users, non-profit institutional users, golf courses and homeowners. Completed mailed questionnaires were received from 916 respondents in the first seven sectors, and 629 households were interviewed by telephone.

The total turfgrass area used and maintained in Florida in 1991-92 was about 4.4 million acres, with 75 percent of this area in the residential (household) sector. Turfgrass industry employment was 185 thousand full-time and part-time workers, or 130 thousand 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 sources. 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 assets in equipment, irrigation installations and buildings, but not land, had a book value of $8.6 billion, including non-land assets purchased during 1991-92 totaling $3.0 billion. Value-added to Florida's economy in 1991-92 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.

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Introduction

The Economic Organization of the Florida Turfgrass Industry

Cultivated turfgrass is a pervasive feature of the urban landscape in Florida and many other developed regions of the world. It is preferred as a vegetative groundcover to reduce erosion, absorb pollutants, dampen noise, and to provide a comfortable, durable, and aesthetically pleasing surface for outdoor activities. In Florida, a very large industry has rapidly evolved to produce and deliver turfgrass products and services. This industry contributes to Florida's economy in terms of employment, cash spent on inputs, sales and the value-added created by its economic activities.

Economic activity in the turfgrass industry may be broadly grouped into three categories: 1) supply of turfgrass products and related services, and 2) consumption of turf products and services. The supply of turfgrass products includes not only grass sod itself but also the many goods necessary for production and maintenance of turfgrass, such as chemicals, fertilizer and mowing equipment. Turfgrass service activities include installation and ongoing maintenance of turfgrass areas. Consumption of turfgrass products and services may be subdivided as (a) commercial turf-based activities, such as golf courses or athletic fields, and (b) non-commercial uses, such as home lawns.

Figure 1 illustrates the structure of the turfgrass industry and the flow of goods and services among the various sectors of the industry.

At the heart of the industry are the sod growers, who create the product which is directly or indirectly utilized by the rest of the industry. Manufacturers of turf equipment, fertilizers and chemicals hold a similar economic role as primary producers. Wholesalers, retailers, and service vendors purchase and resell sod and other turfgrass products together with their services to consumers. These market intermediaries provide services to customers including transportation, packaging, installation, and product use information. In addition, lawn maintenance service vendors, provide complete lawn care services, such as mowing, irrigation and fertilizing. Each of these service activities adds value to turfgrass products for final consumers.

The turfgrass industry is primarily a locally based industry: most goods and services are produced and consumed within the state, and very little is exported to other regions. Consequently, the vast majority of value-added services provided by turfgrass-based economic activities occurs within the state, and benefits the local workers. This stands in contrast with many other industries which ship raw materials or relatively unrefined products to other regions for further value-added processing. In this case, the exporting region loses a large share of value-added and the jobs that this activity supports.

Objectives and Organization of the Florida Turfgrass Survey

The basic objective of this project was to evaluate the annual economic contribution of the turfgrass industry to Florida's economy, in order to show its importance in the state to industry leaders, policy-makers and the general public. To accomplish this objective, survey information was obtained on the turfgrass area maintained, maintenance expenses, product and service sales, turfgrass-related non-land assets, and resources used for irrigation and fertilization. A second objective of this study was to more generally characterize the nature of Florida's turfgrass industry for use by industry professionals, in terms of varieties of turfgrass used, itemized product expenses and sales, market distribution channels, maintenance practices, and problems experienced by turf users.

The survey was organized around the concept of value-added, i.e. the increase in value of products due to addition of labor and other services as they move from producers to consumers through market intermediaries.

Based upon the value-added concept and previous studies in Florida and other states, eight major sectors of the turfgrass industry were identified for surveying. Table 1 lists these major sectors and their constituent sub-sectors along with their economic roles industry. Sod farms (sector 1) and manufacturers of turf-related goods (sector 2) were considered primary producers. Manufacturers consisted of sporting goods makers, lawn, garden and farm equipment producers, and fertilizer and chemical manufacturers. Turf product wholesalers and retailers (sector 3) are market intermediaries, consisting of sporting goods stores, retail nurseries, farm supply businesses, and garden stores. Turf service vendors (sector 4), including landscape and lawn maintenance firms, are both service producers and market intermediaries of turf-related products. Commercial businesses (sector 5), non-profit institutions (sector 6), golf courses (sector 7), and households (sector 8) are all consumers of turf products and services. Commercial institutions include apartments/condominiums, cemeteries, airports, hotels and motels, trailer parks and campgrounds, museums, gardens, and zoos, hospitals and nursing homes, sports clubs, race tracks and amusement parks. Non-profit institutions include schools, prisons, parks, and government buildings and grounds. Highway roadsides maintained by government were sometimes reported as a separate category to emphasize their importance. Public and private golf courses were classified as a separate category of consumer because of their prominent role in the industry as a provider of high-valued turf-based services.

Table 1. Organization of the Florida turfgrass industry, survey sectors and economic roles.
Industry Sector Functional Economic Role
1 Sod farms primary producer
2 Turf product manufacturers: fertilizers/chemicals, lawn & garden equipment primary producer
3 Turf product wholesalers and retailers: farm supply vendors, garden centers, retail nurseries, sporting goods shops market intermediary
4 Turf service vendors: landscapers, lawn service firms, building maintenance firms, specialty construction contractors service producer and market intermediary
5 Commercial institutions: hotels/motels, cemeteries, apartments/condominiums, hospitals, airports, race tracks/stadiums, medical facilities, botanical/zoological gardens, museums/galleries consumer
6 Non-profit institutions: religious organizations, schools & colleges, correctional facilities, government building complexes, highway roadsides consumer
7 Golf courses: private, public consumer and producer of commercial turf-based activity
8 Households: single family dwellings consumer

Other Turfgrass Industry Surveys

Florida's turfgrass industry was previously surveyed by the Florida Department of Agriculture in 1974 (FDACS, 1974). The sod production industry in Florida was examined by Smith and Brewster (1968) and Haydu and Cisar (1992). Comprehensive statewide turfgrass industry surveys have been published for Oklahoma (OSU, 1979), Maryland (Strickland et al, 1981), Pennsylvania (Penn. Dept. Agric., 1989), New Jersey (Indyk et al, 1983), Ohio (Sporleder et al, 1989), Tennessee (Brooker et al, 1992), and North Carolina (Griffith and Olson, 1987). Additionally, an economic impact analysis was done for the golf industry in Arizona (Barkley and Simmons, 1989).

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Overall Survey Results

Survey Respondents and Sample Rates

There were 906 usable mail survey responses received from firms and institutions in the first seven industry sectors, and 629 Florida households were surveyed by telephone interview (Table 2). Economic impacts for each sector were estimated by multiplying summed values for survey respondents by an expansion factor. This factor represented the ratio of the population to the number of households or firms sampled in each sector, for each variable.

Surveyed sector population numbers were obtained from Dun & Bradstreet Information Services, unless otherwise noted. The percentage of the population surveyed varied depending upon the size of the population and the rate of responses to presurvey mailings. Sample rates ranged from less than 0.1 percent in the case of households, to nearly 30 percent for prisons, and over 20 percent for cemeteries, sod farms, and private golf courses (Table 2).

Table 2. Population, sample numbers, and sample rates, by sector, Florida turfgrass industry survey, 1991-92.
Sector Population Respondents Sampled Sample Rate (%)
1 Sod Farms 751 16 21.3
2 Manufacturers 104 14 13.5
Fertilizer & Chemical Manufacturing 81 12 14.8
Turf & Grounds Equipment Manufacturing 23 2 8.7
3 Wholesale/Retail 1836 87 4.7
Lawn/Garden Machinery/Equipment Wholesale Trade 332 16 4.8
Fertilizers & Agricultural Chemicals Wholesale Trade 167 17 10.2
Lawn & Garden Equipment Retail 852 42 4.9
Retail Sporting Goods Shops 485 12 2.5
4 Service Vendors 3368 54 1.6
Landscape Services 447 5 1.1
Lawn and Garden Services 2193 44 2.0
Athletic & Recreational Facilities Construction 66 3 4.5
Building Maintenance Services 662 2 0.3
5 Commercial Institutions 11,424 399 3.5
Airports & Services 149 14 9.4
Nonresidential Building Operators 2760 24 0.9
Apartment Building Operators 2959 55 1.9
Cemetery Subdividers & Developers 112 24 21.4
Hotels, Motels, Inns, Vacation Lodges 3717 37 1.0
Trailer Parks & Campsites 421 58 13.8
Race Tracks & Stadiums 53 10 18.9
Golf Services & Professionals 96 13 13.5
Medical Facilities 934 156 16.7
Botanical & Zoological Gardens, Museums & Galleries 223 8 3.6
6 Non-Profit Institutions 5815 179 3.1
Elementary/Secondary Schools 3081 53 1.7
Colleges & Universities 212 9 4.2
Churches, Temples, & Shrines 2174 69 3.2
Local governments 257 21 8.2
Correctional Institutions 91 27 29.7
7 Golf Courses 1050 157 15.0
Public golf courses 662 55 8.3
Private golf courses 3882 103 26.6
8 Residential (single family households) 3,032,7693 629 <0.0
Total 1,535

1 Sod farm population from previous industry surveys by authors.

2 Private golf course population from Florida Golf Guide and Nat. Golf Foundation

3 Single family household population from Florida Statistical Abstract.

Turfgrass Acreage

The total area of turfgrass maintained in Florida during 1991-92 was estimated at 4.4 million acres (Table 3). Single family homes comprised the largest share of maintained turf with 3.3 million acres, or 75 percent of the total (Figure 2). Non-profit institutions were the largest user group with 336 thousand acres (8%), including 167 thousand acres for local governments, and 113 thousand acres for elementary and secondary schools. Highways represented the second largest user group with 329 thousand acres of maintained turf in the state. Commercial institutions had a total of 203 thousand acres, representing 5 percent of the total area. This group embodied a wide array of institutions, but only airports had more than 1 percent of the total acreage within this group. Golf courses accounted for 131 thousand acres of turfgrass, or 3 percent, and sod farms produced and maintained 46 thousand acres. Service vendors cared for 1.1 million acres of turfgrass, or 24 percent of the total industry acreage. Lawn and garden service vendors cared for about 1 million acres of turfgrass, which was reported under consumer sectors.

Table 3. Turfgrass area used and maintained in Florida, 1991-92.
Sector Thousands Acres Percent of Total
Sod Farms 46.1 1.0
Service Vendors 1,065.4 24.3
Landscape Services 27.9 <1
Lawn and Garden Services 989.2 22.5
Athletic & Recreational Facilities Construction 26.6 <1
Building Maintenance Services 21.6 <1
Golf Courses 131.3 3.0
Public golf courses 75.0 1.7
Private golf courses 56.3 1.3
Commercial Institutions 202.5 4.6
Airports & Services 63.0 1.4
Nonresidential Building Operators 20.6 <1
Apartment Building Operators 24.9 <1
Cemetery Subdividers & Developers 4.6 <1
Hotels, Motels, Inns, Vacation Lodges 37.8 <1
Trailer Parks & Campsites 19.4 <1
Race Tracks & Stadiums 4.2 <1
Golf Services & Professionals 4.5 <1
Medical Facilities 14.0 <1
Botanical & Zoological Gardens, Museums & Galleries 9.5 <1
Non-Profit Institutions 336.2 7.7
Elementary/Secondary Schools 112.6 2.6
Colleges & Universities 33.6 <1
Churches, Temples, & Shrines 12.9 <1
Local governments 166.9 3.8
Correctional Institutions 10.1 <1
Highways 329.1 7.5
Residential 3,306.6 75.3
Total 4,391.0* 100%

* Total does not include area managed by landscapers and lawn and garden services for final consumers.

Turfgrass Varieties Used

Five turfgrass varieties were used by survey respondents. St. Augustinegrass and bahiagrass were the dominant varieties reported (Figure 3). Some 1.5 million acres of St. Augustine was maintained in 1991-92, representing 36 percent of total acreage. As a warm season grass, St. Augustine is well-adapted to all parts of Florida, and is favored for high-quality turf. Bahiagrass accounted for 19 percent of total turfgrass area, or 751 thousand acres, and is favored for its pest and drought resistance. Mixed grasses accounted for 543 thousand acres or 14 percent of total area. Bermudagrass was maintained on 382 thousand acres (10%), Centipedegrass occurred on 280 thousand acres (7%), and Zoysiagrass 59 thousand acres (1%). Two final categories, "other" and "unknown" accounted for the remaining 13 percent of turfgrass acreage in Florida.

Employment in Florida's Turfgrass Industry

Employment is a vital indicator of an industry's contribution to a local, regional or national economy. Wages stimulate an economy when they are spent locally in the purchase of other goods and services. In 1991-92, Florida's turfgrass industry employed a total of 186 thousand workers, including 135 thousand full-time and 51 thousand part-time workers (Table 4).

Full-time equivalent employees (FTEs) is a standardized measure of employment, with one FTE representing 2080 hours, or 52 weeks worked annually based on a 40 hour week. Using this definition and the reported total employee weeks worked, Florida's commercial turfgrass industry employed 130 thousand FTEs in 1991-92. Put in perspective, turfgrass industry employment was about two thirds of the employment in construction and nearly three times the number of workers employed in agriculture in the state (Fl. Stat. Abstract, 1993).

Turfgrass industry employment was dominated by service vendors, commercial institutions and non-profit institutions. Commercial institutions employed 43 thousand FTE workers for turfgrass maintenance, representing 33 percent of the industry total. Within this group, apartments/condominiums, hotels/motels, and nonresidential buildings accounted for a substantial share of total employment. Service vendors had 39 thousand FTE employees, representing nearly one-third (30%) of all workers employed in the industry, with lawn care firms alone accounting for 20 percent. Non-profit institutions employed over 18 thousand FTE workers, a 14 percent share of total employment, with schools and colleges/universities representing over half of the turf care personnel in this group.

Golf courses employed 17 thousand full-time and part-time workers, or 13.3 thousand FTEs, representing 10 percent of employment in Florida's turfgrass industry. Because golf courses require high maintenance, this group had a very high number of employees per acre.

Employment in the remaining intermediate demand sectors of sod farms, manufacturers, and wholesale/retail establishments accounted for 16.9 thousand FTEs, or about 13 percent of the total. Wholesale and retail establishments employed 13 thousand FTE workers for their turfgrass market business. Sod farms employed 2.9 thousand FTEs, or 2 percent of the industry total. Manufacturers accounted for less than one percent of industry employment with a total of 1200 FTEs.

Table 4. Employment in Florida's turfgrass industry, 1991-92.
Sector Number of Employees FTEs Annually
Full-time Part-time All Number Percent of Total
Sod Farms 2,795 334 3,130 2,894 2.2
Manufacturers 1,236 41 1,277 1,208 0.9
Wholesale/Retail 15,119 1,860 16,979 12,769 9.8
Service Vendors 39,803 9,581 49,383 38,928 29.9
Golf Courses 14,663 1,820 16,484 13,409 10.3
Commercial Institutions 43,352 25,973 69,324 42,707 32.8
Non-Profit Institutions 17,853 10,916 28,769 18,362 14.1
Total 134,822 50,524 185,345 130,275 100%

Water Used for Turfgrass Irrigation

Florida has one of the nation's fastest growing populations with a net inflow of nearly 1,000 people a day (Fla. Stat. Abs., 1993). As urban populations swell, pressures on limited supplies of clean water increase. Water use is currently, and will remain, a defining issue for the state. Water will partly determine growth rates of urban centers as well as the types and sizes of both agricultural and non-agricultural enterprises. Allocation of water resources (i.e., who gains and who loses) will in part be determined by the economic contribution of each competing industry. Turfgrass is a significant consumer of water in Florida but the turfgrass industry is also a major economic contributor.

Water consumed for turfgrass irrigation by Florida's sod farms, golf courses, commercial and non-profit institutions was estimated from the irrigated acreage, depth of irrigation, and irrigation frequency (see Methods section). The total water used by these sectors was estimated at 1.75 billion gallons per day (Table 5). Non-profit institutions dominated water consumption for turfgrass irrigation with 58 percent of the total. Golf courses and commercial institutions each consumed about 20 percent and sod farms consumed about 2 percent of total water used. Golf courses and non-profit institutions were the most intensive users of water, with 2.6 and 3.0 million gallons per day per 1000 acres of turfgrass (Table 5).

Service vendors and wholesale/retail establishments were not included in this assessment because they were not final consumers of water for turfgrass irrigation. Survey information on water use was not available for households.

Table 5. Water consumption for irrigation in Florida's turfgrass industry, 1991-92
Sector Water Used

(Million Gallons Per Day)

 Percent of Total MGD Per 1000 Acres
Sod Farms 37 2 0.8
Golf Courses 345 20 2.6
Commercial Institutions 356 20 1.8
Non-Profit Institutions 1,016 58 3.0
Total 1,754 100%

Irrigation Water Sources

Four sources of water were used for turfgrass irrigation in Florida: groundwater wells, surface water bodies (lakes, rivers), municipal potable water supplies, and recycled municipal wastewater. Over half (58%) of all the water used came from groundwater wells (Figure 5). Recycled and surface water were the second most important sources at 15 and 17 percent, respectively. Municipal water represented 10 percent of total consumption. An unknown share of municipally-supplied water was also withdrawn from groundwater wells.

Cash Expenses for Turfgrass Products and Services

Cash expenses for turfgrass products and services by sector and by major expense category are presented in Table 6, and summarized in Figure 6. In 1991-92, an estimated $7.25 billion was spent for production, distribution and use of turfgrass products and services in Florida. Some $5.1 billion (65%) of the total cash expenses, was accounted for by final users (sectors 5-8) and $2.2 billion (35%) by the commercial intermediary sectors (sectors 1-4).

These cash expenses were made up of materials, equipment, labor, services and other direct costs. Expenses for materials including sod, seed, chemicals, and fertilizers were $1.5 billion or 21 percent of total expenses. Equipment accounted for $1.6 billion or 22 percent of total expenses. Employee labor was $1.4 billion (19%) and professional services, principally for lawncare, totaled $2.0 billion (28%). Other direct costs which could not be itemized accounted for $974 million (10%). These cash expenses do not include taxes, debt service, or depreciation.

To put these figures in perspective, the total cash expenses by sectors five through eight ($5.1 billion) is equivalent to every working person in Florida (5.3 million) spending $955 annually, or each person in the state (13 million) spending $390.

Residential households (single family homes) were the dominant group, spending $3.9 billion on turfgrass maintenance, representing 78 percent of the total $5.1 billion cash expenses by final users in Florida. Commercial institutions spent $448 million, or 9 percent of this total. A large share of expenses for this group came from hotels and motels ($155 million) and nonresidential buildings ($110 million). Golf courses accounted for $470 million or 9 percent of the total. Non-profit institutions had expenses of $309 million, mainly from schools and local governments.

For intermediate demand (sectors 1-4), wholesale/retail establishments had cash expenses amounting to $1.12 billion. Within this group, the "lawn/garden equipment" classification represented $908 million. Service vendors had total cash expenses of $855 million, with the largest share from "Lawn and Garden Services" ($595 million). Sod producers spent $94 million, or $2,000 per acre of sod produced. Finally, manufacturers spent $7 million for production of goods sold to the turfgrass market, with nearly all in chemicals and fertilizers.

Cash expenses per acre are an indicator of turfgrass maintenance intensity (Table 6). Across all user groups, lawn care expenses averaged about $1,600 per acre in 1991-92. Homeowners spent an average of $1,189 per acre on their lawns while golf courses spent $3,600 per acre. Costs per acre were also very high for landscape services ($5,300), nonresidential buildings ($5,300), and hotels ($4,100). Maintenance expenses per acre were lowest for highway roadside maintenance ($27), airports ($401), and trailer parks/campsites ($386).

Expenses for lawn maintenance are probably higher in Florida than in other states because of the sub-tropical climate, especially in southern Florida where about two-thirds of the state's population resides. In most parts of Florida, turfgrass must be maintained throughout the year, rather than only part of the year as in northern states.

Table 6. Cash expenses in Florida's turfgrass industry, 1991-92, by industry sector and by expense category
Sector Total
Cash
Expenses

(mill. $)

 Total
Expenses
Per Acre

(thous.$)

 Expenses by Major Category

(million $)
Materials1 Equipment Labor Services Other
1 Sod Farms 93.6 2,031 14.3 13.9 38.1 6.2 21.1
2 Manufacturers 7.3 NA 3.7 0.0 0.1 1.0 2.5
3 Wholesale/Retail 1,124.2 NA 75.7 881.8 92.8 6.8 67.2
4 Service Vendors 854.5 802 91.6 101.3 503.4 33.1 125.1
5 Commercial Institutions 447.7 2,211 46.6 31.7 264.3 97.3 7.9
6 Non-Profit Institutions 308.9 919 26.2 25.7 234.7 20.7 1.6
6a Highways 8.8 27 1.1 3.2 4.5 0.0 0.0
7 Golf Courses 469.7 3,577 94.0 57.9 271.3 17.6 28.9
8 Residential
(single family HH)		 3,932.6 1,189 1,134.6 479.8 0.0 1,820.5 497.6
Total (avg) 7,247 1,647 1,488 1,595 1,409 2,003 752

1 Materials includes sod/seed, fertilizer, soil amendments, and chemicals.

Itemized Cash Expenses for Turfgrass Products and Services

Cash expense items for turfgrass products and services by final consumers (sectors 5-8) and by market intermediaries (sectors 1-4) are detailed in Table 7. In economic terms, the final consumer sectors represent final demand for turfgrass products, while the intermediary sectors represent intermediate demand for the same products. Turfgrass plugs, sprigs, or seed was the largest material item at $1.0 billion, with $938 million of it spent by final consumers. Fertilizers also represented a substantial share of expenses on materials at $230 million. Chemical products, including pesticides, herbicides, fungicides, and growth retardants together comprised expenses of $240 million, approximately evenly split between final and intermediate demand. Compost and soil amendments were rather small items at about $4 million.

Equipment expenses by final consumers were comprised of fuel, repairs, and rentals (Table 7). The other equipment items were considered capital investments by final consumers, and so were reported under "Assets" (see following section). For the intermediate demand sectors, purchases of mowers ($407 million) and irrigation equipment ($333 million), were the largest equipment expense items. Fuel and repairs were also significant equipment operating expense items ($285 and $379 million, respectively) for turf growers and service vendors.

The $1.41 billion spent on labor was broken-down into employees' wages ($1.06 billion), and salaries for supervisors ($275 million), and clerical/sales employees ($71 million).

Expenses for professional services, defined as work performed by agents other than employees of the company or household itself, totaled $2.0 billion, which was the largest single category. Lawn care services consisted of chemical and fertilizer applications, irrigation installation, contract labor, and transportation. Contract labor accounted for $1.54 billion, or three-quarters of total service costs. All but $9 million of this sum was paid by final consumers. Installing irrigation systems was the second most expensive service ($303 million) followed by chemical fertilizer application ($154 million).

Table 7. Itemized cash expenses for Florida's turfgrass industry, 1991-92.
Expense Category/Item Final User Expense Intermediary Sector Expense Total All Sectors
Millions Dollars
Materials 1,151.0 336.6 1,487.6
Plugs/Sprigs/Seed 937.8 74.8 1,012.6
Herbicides 38.8 51.2 90.0
Fungicides 21.1 21.8 42.9
Other Pesticides 52.6 50.4 103.0
Growth Retardants 2.8 1.4 4.2
Fertilizer 95.9 134.7 230.6
Compost/Soil Amendments 1.9 2.3 4.2
Equipment 602.8 992.5 1,595.4
Fuel 239.7 45.4 285.1
Repairs 331.8 47.2 379.0
Rentals 31.3 9.2 40.5
Tractors* NA 48.4 48.4
Mowers* NA 406.5 406.5
Irrigation Equipment* NA 333.0 333.0
Sports Equipment* NA 12.8 12.8
Other Equipment* NA 90.2 90.2
Labor 798.5 610.8 1,409.2
Wages 611.0 452.5 1,063.5
Supervisor salaries 164.9 109.8 274.6
Clerical/Sales salaries 22.6 48.5 71.1
Services 1,960.5 42.7 2,003.3
Chemical/Fertilizer Application 131.6 22.4 154.0
Irrigation Installation 294.1 9.1 303.2
Contract Labor 1,534.8 9.7 1,544.5
Transportation* NA 1.6 1.6
Other 548.2 203.7 751.9
Total All Items 5,061.0 2,186.4 7,247.4

* item applicable only to expenses for commercial intermediate demand sectors

Sales of Turfgrass Products and Services

Sales of turf products and services were estimated for the five turfgrass industry sectors which actually sell turf products and services: sod farms, manufacturers, wholesalers/retailers, service vendors, and golf courses. Total sales for these sectors in the 1991-92 fiscal year amounted to $6.8 billion (Table 8). In comparison, during this same time period, Florida farm cash receipts were around $6.3 billion, including citrus which generated $1.7 billion. Another comparison giving some idea of the size of the whole turfgrass industry is that net sales taxes paid in Florida in 1991 were $8.2 billion, and Florida's department stores sold $7.5 billion of merchandise in 1991 (Fl. Stat. Abstract, 1993).

The biggest contributor to sales was the golf industry, with $3.0 billion (Figure 7). Service vendors were the next largest group, with sales of $1.86 billion, largely for "lawn and garden services". The wholesale/retail sector had sales totaling $1.65 billion, mainly for lawn/garden and sporting equipment wholesalers. Sod farms and manufacturers had relatively small sales by comparison, amounting to $161 million and $83 million, respectively.

Table 8. Sales of products and services in Florida's turfgrass industry, 1991-92
Sector Sales

(Millions Dollars)

 Percent of Total
1 Sod Farms 161 2
2 Manufacturers 83 1
Fertilizer & Chemical Manufacturing 46 1
Turf & Grounds Equipment Manufacturing 37 1
3 Wholesale/Retail 1,647 24
Lawn/Garden Machinery/Equipment Wholesale Trade 1,175 17
Fertilizers & Agricultural Chemicals Wholesale Trade 145 2
Lawn & Garden Equipment Retail 187 3
Retail Sporting Goods Shops 141 2
4 Service Vendors 1,856 28
Landscape Services 148 2
Lawn and Garden Services 1,574 23
Athletic & Recreational Facilities Construction 73 1
Building Maintenance Services 60 1
7 Golf Courses 3,006 45
Public golf courses 1,745 26
Private golf courses 1,261 19
Total 6,753 100%

Itemized Sales of Turfgrass Products and Services

Sales of itemized turfgrass-related products and services are shown in Figure 8. "Other products and services", which mainly represent complete lawn maintenance services, was the largest single sales item at $2.9 billion. Golf play was the second largest, with $2.03 billion, or 30 percent of total sales. Irrigation equipment was a major item with $1.2 billion in sales, emphasizing the importance of water to this industry. Mowers had total sales of $1.0 billion. Other notable sales items were sod ($338 million), fertilizer ($243 million), and "other equipment" ($486 million), which together made up 16 percent of total sales. Herbicides, fungicides, and other pesticides together comprised $84 million, representing only 1 percent of total sales.

Turfgrass-Related Non-Land Assets

The assets used for turfgrass maintenance or turf market business activities were reported by survey respondents as depreciated ("book") values for the year ending in 1991-92, and the market value (cost) of assets purchased during this year. Total assets for all industry sectors amounted to $8.56 billion, including $3.2 billion (38%) in equipment, $2.5 billion (29%) in irrigation installations, and $2.9 billion (34%) in buildings used for turf maintenance (Table 9). The residential household sector had assets valued at $3.0 billion, representing 35 percent of the industry total. Wholesale/retail establishments had assets valued at $2.0 billion or 24 percent. Golf courses, service vendors, and commercial institutions each had assets of $800 million to $1 billion, representing about 10 percent of total turfgrass-related assets. Assets were not divided into categories for the household, manufacturer, or wholesale/retail sectors.

Golf courses had the highest level of assets invested per unit area: over $8,000 per acre for all courses, and over $11,000 per acre for private courses (Table 9). Sod farms and many commercial institutional sectors also had turfgrass-related investments amounting to several thousand per acre.

Table 9. Non-land assets in Florida's turfgrass industry, year end 1991-92.
Sector Total Assets

(mill.$)

 Assets Per Acre

($)

 Assets by Category

(millions $)

 Assets Purchased 1991-92

(mill.$)
Equipment Irrigation Buildings
1 Sod Farms 87 1,889 53 21 13 5
2 Manufacturers 110 NA NA NA NA 6
3 Wholesale/Retail 2,045 NA NA NA NA 1,243
4 Service Vendors 885 831 477.6 90.7 316.6 92
5 Commercial Institutions 922 4,556 257.7 345.3 319.4 199
6 Non-Profit Institutions 426 1,267 155.2 176.8 94.1 40
7 Golf Courses 1,068 8,130 356.7 305.1 405.8 110
8 Residential

(single family HH)

 3,013 911 NA NA NA 1,266
Total (avg) 8,555 $1,944 3,223 2,450 2,883 2,962

Operating Profit Margins

Any industry must be profitable in order to survive and grow by attracting new capital investment. Profits were not measured in this survey but it is possible to estimate an approximate profit margin for each sector. This margin is the sum available to meet principal and interest payments on real and non real estate debt, to pay taxes, land rent and to satisfy a return on equity capital and any unpaid labor and management. The results shown in Table 10 suggest that there was about $1.7 billion in profits generated by the turf industry in 1991-92. The negative margin for the wholesale/retail sector was largely due to the very high level of new assets purchased in 1991/92.

Given the uses for this margin it is probable that most of this money was spent inside the state. Possibly the largest proportion goes to debt service, followed by taxes, including income, property, sales and other taxes. This is essentially a local industry that exports very little of its receipts and spends very little of its cash outside the state.

Table 10. Sales, cash costs, assets purchased, depreciation and profit margin for Florida's turfgrass industry, 1991-92
Item

(millions $)

 Sector
Sod Farms Manufacturers Wholesale/Retail Service Vendors Golf Courses Total
Sales 161.3 83.8 1647.1 1855.6 3006.5 6753
Cash Costs 93.6 7.3 1124.2 854.5 469.7 2549
Assets purchased 5.2 5.9 1243.1 92.1 110.0 1456
Depreciation 12.1 11.0 819.1 86.0 126.6 1055
Margin 50.4 59.6 -1539.3 823.0 2300.2 1693

Note: For manufacturing and wholesale/retail sectors it was assumed most of the assets purchased were fertilizer and chemicals for sale and that asset turnover was 12 times per year for fertilizer and 6 times for chemicals.

Value-Added by the Florida Turfgrass Industry

A value-added methodology was used as a summary measure of the economic impact of Florida's diverse turfgrass industry. The value-added in each successive stage of marketing turfgrass products and services is broadly calculated as the difference between the value of sales and the cost of inputs from suppliers. The total value-added for the industry is simply the sum of value-added for all sectors.

Value-added was calculated differently for the commercial business and final consumer sectors of the turfgrass industry. For commercial businesses (sod farms, manufacturers, wholesale/retail establishments, turfgrass service vendors and golf courses), value-added was calculated as total sales plus depreciation minus cash expenses for material goods and outside services. Expenses for employees were not deducted because labor is an essential part of value-added. For the consumer sectors (institutions and households), value-added was calculated as labor expense plus depreciation. In the case of the residential sector, unpaid household labor was valued at two-thirds the average expense for professional services. Annual depreciation was calculated as a percentage of current asset values. See the "Methods" section of this report for further details on the value-added methodology used.

Value-added to Florida's economy by the turfgrass industry during the 1991-92 is summarized in Figure 10.

The total value-added by the turfgrass industry was estimated at $7.4 billion (Table 11). Golf courses accounted for $2.6 billion (36%) of total value-added. Service vendors and single family residences each accounted for $1.5 billion (20%) in value-added. The wholesale/retail sector also contributed significantly, with $819 million in value-added (11%). Commercial and non-profit institutions contributed 5 percent and 4 percent, respectively. Sod farms and manufacturer sectors contributed about 3 percent to total value-added by the industry.

On a per acre basis, golf courses contributed an average of over $20,000 in value-added. Sod farms, service vendors, and commercial institutions also had a high value-added per acre (over $1000) while residential households, non-profit institutions and highways had relatively low values (Table 11). Landscape service vendors, a sub-sector of service vendors averaged nearly $5000 per acre in value-added.

Table 11. Value-added by Florida's turfgrass industry, 1991-92
Sector Value-Added
(Millions Dollars)		 Percent of Total
(%)		 Value-Added Per Acre
($)
1 Sod Farms 118.0 1.6 2,561
2 Manufacturers 86.6 1.2 NA
3 Wholesale/Retail 819.1 11.1 NA
4 Service Vendors 1,521.9 20.6 1,429
5 Commercial Institutions 382.6 5.2 1,890
6 Non-Profit Institutions 297.0 4.0 883
6a Highways 4.5 0.1 14
7 Golf Courses 2,915.2 35.8 20,126
8 Residential

(single family households)

 1,502.8 20.4 454
Total (avg) 7,375.1 100% 1,676

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Survey Methods

Turfgrass Industry Population and Survey Sampling

The populations of the eight sectors in the turf industry were obtained from a variety of sources. A listing of approximately 26,000 companies in specified Standard Industrial Categories was purchased from Dun and Bradstreet Information Services, Inc. (Parsippany, NJ) for the following survey sectors: manufacturers, wholesalers/retailers, service vendors, commercial institutions, non-profit institutions, and public golf courses. These 1992 listings included information on employment and company sales as well as addresses and phone numbers which were used to contact targeted survey respondents. The comprehensiveness of these listings was verified by comparison with numbers of firms reported by independent sources.

A list of private golf courses was obtained from the Florida Golf Guide. Populations of single and multi-family households in Florida were obtained from the University of Florida's Bureau of Economic and Business Research, the official state government agency responsible for monitoring population trends. Populations of business firms or households in each industry sector surveyed were previously shown in Table 2. The sub-sectors listed in Table 2 correspond to a 2-digit or 4-digit Standard Industrial Category (SIC).

Sample rates are an indicator of a survey's representativeness. Sample rates were calculated for each survey sector as the fraction of the population from which usable responses were obtained, as previously shown in Table 2.

The numbers of firms or households contacted in each survey sector, shown in Table 12, were designed to achieve a precision of plus or minus ten percent in estimating the average value of continuous variables, such as turf area maintained (acres or square feet). The formula used for calculating these numbers was:

where ni is the number to sample in the ith sector, Ni is the population of the ith sector, CVi is the coefficient of variation of a representative continuous variable for the ith sector, p equals 0.1 to give plus or minus 10 percent desired precision of the estimates, Z equals 1.96 for the Z distribution value representing for 90 percent level of confidence in the estimate, and ri is the expected response rate adjustment factor for the ith sector, based upon the response rate obtained in the presurvey.

The firms or households to be contacted were randomly selected from the population. A total of over 11,000 firms were contacted for the survey (Table 12).

Response Rates

Response rates for the survey were calculated as the ratio of usable questionnaires received to the number of firms or households contacted. The response rates ranged from 6 percent to 35 percent, and are shown in Table 12.

Table 12. Mail survey populations and response rates for Florida turfgrass industry.
Survey Sector Firms Contacted Questions Sent Complete Responses Response

Rate (%)
Sod Producers 72 241 16 33
Manufacturers
Sporting Equip. Manufacturers (golf, polo, croquet) 33 126 2 16
Lawn & Garden Equipment Manufacturing 53 67 2 19
Fertilizer Manufacturers 147 266 12 21
Service Vendors
Lawn and Garden Services 816 2,029 53 10
Building Maintenance Services 934 1,915 7 7
Athletic & Recreational Facilities Construction 63 221 3 23
Athletic & Recreational Facilities Construction--Special Trades 564 2,013 1 14
Wholesalers & Retailers
Retail Sporting Goods Shops 889 1,789 12 6
Lawn & Garden Supplies Retail 708 1,129 40 11
Fertilizers & Agricultural Chemicals Wholesale Trade 216 504 17 14
Lawn & Garden, Sporting Equipment Wholesale Trade 427 639 17 10
Commercial Institutions
Apartment and Nonresidential Building Operators, Cemeteries 1542 4,496 111 12
Airports & Services 346 669 15 11
Hotels & Motels, Inns, Vacation Lodges, Trailer Parks & Campsites 939 2,910 98 14
Botanical & Zoological Gardens 204 215 8 13
Race Tracks, Golf services 202 515 25 18
Hospitals 809 2,457 160 24
Non-Profit Institutions
Correctional Institutions 146 264 26 24
Executive Offices 134 138 20 18
Churches, Temples, & Shrines 924 1,688 70 11
Elementary/Secondary Schools, Colleges & Universities 730 1,064 62 13
Golf Courses 435 1,176 139 35
Total 11,333 26,531 916

Survey Instruments and Implementation

Questionnaires were developed for each major industry sector, in order to collect the information pertinent to its particular economic role. Information was collected from producer and market intermediaries and golf courses (sectors 1-4, and 7) on sales, market channels, employment, and cash expenses, for turf products and services . Information was collected from consumer sectors and sod farms (sectors 1 and 5-8) on turfgrass area maintained, turfgrass maintenance practices, water resources used for turf irrigation, labor used for non-turf maintenance, and annual expenses for turf maintenance activities. Specific information collected from each sector is summarized in Table 13. The actual questionnaires are shown in Appendix A.

The survey was implemented using both mailed questionnaires and telephone interviews. Mail surveys were primarily used for all sectors except households, which were surveyed by telephone. A follow-up telephone survey of a sample of businesses which did not respond to the mail survey was conducted to verify the representativeness of mail survey respondents.

The questionnaires were pretested with target respondent groups and revised before the general survey was conducted. Mailed survey questionnaires were pretested with industry professionals on the FTGA Board of Directors, and 200 business firms. The telephone survey questionnaire was pretested with approximately 30 randomly selected households.

Survey mailings were conducted four times at approximately four month intervals: March, July, and November, 1993, and March, 1994. For each mailing, the list of targeted firms was drawn from the pool of sample contacts, with previously responding firms removed from the pool. Questionnaire packages were sent by first class mail and addressed to the company's chief executive, by name where available. Mailed packages included a cover letter from the investigators, a survey form and a return-addressed, postage-paid reply envelope. Over 26 thousand questionnaires were mailed for the survey (Table 12).

Telephone interviews of households were conducted in two blocks, in February 1993, and October 1993, under sub-contract with the University of Florida's Bureau of Economic and Business Research, Telephone Market Survey Program. The households contacted for telephone interviews were randomly selected from a directory of all residential telephone numbers in Florida, with the sampling in each of the state's 67 counties approximately proportional to its population. Persons contacted by telephone were qualified as respondents for the survey based upon affirmative answers to the following two questions:

  1. "Does this household have a lawn which is maintained?"
  2. "Are you the person responsible for maintenance of the lawn or are you knowledgeable about the maintenance of the lawn?"

At least four attempts were made to contact selected households before replacement with an alternate target household. Spanish-speaking telephone interviewers were provided for survey respondents who identified a preference for Spanish. Telephone interviews were managed by an automated computer-based system which dialed randomly selected phone numbers, generated questions to be asked by the operator, and logged respondents' answers entered by the operator.

The follow-up telephone survey of non-respondents to the mail survey was conducted in June 1994.

Table 13. Florida turfgrass survey information collected, by survey sector. Asterisks indicate that the information was obtained from the survey.
Question Category

Question

 Response
or Units		 Sod Growers Manufac-
turers & Wholesale/
Retail		 Service Vendors

 Golf Courses Commercial and Non-Profit Institutions House-
holds
Turf-Related Assets
Book value of turf maintenance or production assets at year-end 1991-92: equipment, irrigation installations, buildings $ itemized * * * * *
Turf Products or Services purchased in 1991-92
Supplies purchased: sod, herbicides, insecticides, fungicides, growth retardants, fertilizer, soil amendments, grass seed, mulch, other (specify), total COGS $ itemized * * * * * *
Equipment purchased: mowers, irrigation equipment, vehicles, tractors, other equipment $ itemized * * * * * *
Services purchased: mowing, sod installation, land prep., chemical/fertilizer application, turf renovation/aeration, turf repair, irrigation installation, irrigation mgmt, contract labor, complete lawn care service, other (specify) $ itemized * * * * * *
Regional Inputs/Outputs
Purchases from vendors in-state, product/Service sales out-of-state percent of total purchases, sales * * * * *
Turf Product or Service Sales in 1991-92
Total turf market sales actual amount ($) or specified range * D&B1 D&B * D&B
Supplies sold: sod, herbicides, insecticides, fungicides, growth retardants, fertilizer, soil amendments, grass seed, mulch, other (specify) percent of total turf market sales * * *
Equipment sold: mowers, irrigation equipment, vehicles, tractors, other equipment (specify) percent of total turf market sales *
Services sold: mowing, sod installation, land prep., chemical/fertilizer application, turf renovation/repair, irrigation installation, irrigation mgmt, contract labor, complete lawn care service, golf play, concessions, other (specify) percent of total turf market sales * * *

1Information was provided by Dun and Bradstreet Information Services.


Table 13 (continued). Florida turfgrass survey information collected, by survey sector.
Question Category

Question

 Response or Units Sod Growers Manufac-
turers & Wholesale/
Retail		 Service Vendors Golf Courses Commercial and Non-Profit Institutions House-
holds
Turf Area