Front Cover
 Table of Contents
 Florida's sod industry in 1987
 Changes in the sod industry--1963...
 Concluding comments

Group Title: Economics report - University of Florida Agricultural Experiment Station ; 92-1
Title: An economic and agronomic profile of Florida's turfgrass sod industry
Full Citation
Permanent Link: http://ufdc.ufl.edu/UF00027549/00001
 Material Information
Title: An economic and agronomic profile of Florida's turfgrass sod industry
Series Title: Economics report
Physical Description: ii, 30 p. : ill. ; 28 cm.
Language: English
Creator: Haydu, John J
Cisar, J. L ( John L. )
University of Florida -- Food and Resource Economics Dept
Publisher: Food and Resource Economics Dept., Florida Agricultural Extension Stations, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville Fla
Publication Date: [1992]
Subject: Turfgrasses industry -- Florida   ( lcsh )
Turfgrasses -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )
Bibliography: Includes bibliographical references (p.29-30).
Statement of Responsibility: John J. Haydu, John L. Cisar.
General Note: Cover title.
General Note: "March 1992."
 Record Information
Bibliographic ID: UF00027549
Volume ID: VID00001
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: aleph - 001803063
oclc - 26492752
notis - AJM6864

Table of Contents
    Front Cover
        Front Cover
    Table of Contents
        Page i
        Page ii
        Page 1
        Page 2
    Florida's sod industry in 1987
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
    Changes in the sod industry--1963 to 1987
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
    Concluding comments
        Page 27
        Page 28
        Page 29
        Page 30
Full Text

Economics Report ER92-1

An Economic and Agronomic Profile of
Florida's Turfgrass Sod Industry

Food and Resource Economics Department
Florida Agricultural Extension Stations
Institute of Food and Agricultural Sciences
University of Florida, Gainesville, 32611


John J. Haydu
John L. Cisar


: March 1992

An Economic and Agronomic Profile of
Florida's Turfgrass Sod Industry


Three studies (1963, 1974, and 1987) were examined to profile Florida's sod
production industry. In the past 25 years, sod acreage has increased dramatically, from
6,281 acres in 1963 to 35,569 acres in 1987. Similarly the value of the sod industry has
grown from $7.8 million to 103.2 million, in inflation adjusted dollars. Other than size
and scope, two other features about this industry are noteworthy. First, contrary to trends
in the farm sector in general, the use of labor on a farm-unit basis has actually increased
in the past two decades. This development is attributed to the unique labor market found
in Florida. Second, the distributional mechanisms appear to be evolving differently from
systems elsewhere in agriculture. Rather than by-passing market intermediaries to realize
cost-savings, many producers are relying on market intermediaries to sell and distribute
their product.

Key Words: sod production, harvested sod, farm size, labor use, market channels


Introduction ................................................ 1

Methodology .................................... ............ 2

Part I. Florida's Sod Industry in 1987 .................................. 3

Production and Harvested Acreage .............................. 3
Irrigation Practices ..................... .................... 6
Industry Concerns ........................................... 7

Part II. Changes in the Sod Industry-- 1963 to 1987 ....................... 11

Production and Harvested Acres ............................... 11
Prices and Industry Value .................................. 14
Labor Use ................... ......................... 19
M market Channels ..................... ...................... 22

Concluding Comments ..................... ....................... 27

References Cited .............................................. 29


Table 1. Sod Production Acreage ........... .................... 4

Table 2. Acreage of Sod Harvested .............................. 5

Table 3. Irrigation Methods Used by Sod Producers ................... 8

Table 4. Estimated Acres of Harvested Sod ......................... 11

Table 5. Farm Size Characteristics ............................. 12

Table 6. Average Nominal Prices (Farm Gate) for Florida Cut Sod .......... 15

Table 7. Average Real Prices (Farm Gate) for Florida Cut Sod ............ 16

Table 8. Estimated Gross Value of the Sod Industry .................. 16

Table 9. Permanent and Seasonal Labor Use in Sod Production ............. 20

Table 10. Acres in Production as a Function of the Permanent Labor Force ...... 21

Table 11. Changes in Market Channel Use .................. ........ 24

Figure 1. Changes in Average Farm Size .......................... 14

Figure 2. Market Channels and Outlets ....... ........... .......... 23




John J. Haydu and John L. Cisar'


In 1958 Eugene Nutter projected that turfgrass production in Florida had a bright

future. At the time, total industry output was estimated at 4-6 million square feet per week

and there was a weekly net influx of 770 families moving into Florida (Nutter). In contrast

to those early years, the economic climate today is substantially different. Sod producers

complain of low commodity prices yet rising production costs. They also complain of fierce

firm-to-firm competition as the supply of available sod outstrips demand. Today, two of the

largest producers alone sell more sod in a week than did the entire industry in 1958.

Moreover, unlike the general agricultural sector which experienced a decline in the total

number of farms (although total acres has remained relatively constant), in the past 15 years

the number of sod producers has roughly doubled, reaching between 100 and 125 firms

(Rasmussen, 1985; Davis,1991).

In the past 26 years there have been only three studies of the Florida sod industry,

with the first and the last being the most comprehensive (Brewster, 1965; Fl. Dept. Agr.

Consumer Serv., 1976; Cisar, 1988). The first study was completed and published in 1965

'Assistant Professors, Central Florida Research and Education Center and Ft. Lauderdale
Research and Education Center, IFAS, University of Florida.

encompassed the entire turfgrass industry, sod being only one of many subsectors examined.

However, because of its broad scope, the economic assessment was limited largely to size

and value indicators. The most recent study was undertaken in 1987 primarily to establish

recent information regarding sod production. Prior to this study, little was known about the

size, scope, and diversity of this industry.

The primary purpose of this paper is to provide a benchmark describing structural

characteristics of the sod industry as they were in 1987. A related objective is to compare

and contrast the three studies to illustrate the changes that have occurred in this industry over

the past quarter century. The report consists of two parts. In the first part, key findings

from the 1987 study are discussed. Variables are examined within the context of firm size

and soil type and include sod production, sod harvesting, irrigation practices, and industry

problems. The second part moves to a more dynamic analysis and attempts to uncover

important changes in the industry which have transpired over the 25 years from 1963 to 1987

(the years the studies were actually conducted). In this section, major areas covered are

production, harvesting, product prices, industry value, labor, and market channels.


In the first section of this report, only data from the 1987 survey is used. In the

second part, information from the 1963, 1974, and 1987 studies were examined closely to

identify variables for comparisons over time. For each study a decision was made to

interview the entire population of sod producers. Lists of sod producers were obtained from

trade associations that existed at the time the studies were conducted. Because of its broad

scope, the 1974 study also utilized an area frame sampling technique. However, the study's

breadth also limited its use considerably for purposes of this report, with discussion limited

to acres under production and acres harvested (see Table 4). The 1965 study used personal

interviews to obtain the data whereas the latter study mailed questionnaires to the growers.

Response rates were good, exceeding 60 percent for each study. The 1974 turf survey used

a combination of mailed questionnaires, telephone interviews, and enumerator-conducted

personal interviews.

This paper relies on the 1963 and 1987 studies to provide detailed agronomic and

economic information. However, only variables that were well defined and analyzed

similarly were used for comparisons. Both studies examined the data using farm size as a

differentiating factor. The 1987 study also used soil type to examine production



Production and Harvested Acreage

Estimates of the total acreage in sod production and total acreage of sod harvested, by

grass and soil type, are summarized in Tables 1 and 2. The data are presented according to

farm size, grouped as follows: small (0-499 acres), medium (500-999 acres), large (1,000-

1,999 acres), and very large (2,000 acres or greater). While 40 percent of the sod producers

surveyed represented the small farm category, they accounted for only 6 percent of the total

acreage in production. In contrast, the few very large producers dominate total acreage in

production (62 percent) in Florida (Table 1).

Table 1. Sod Production Acreage in Florida, by Farm Size, Soil Type, and Grass Variety
for 1987.

FARM SIZE/ St. Centi-
SOIL TYPE Augustine Bahia Bermuda pede Zoysia Total Percent
organic 429 2 48 66 8 552
mineral 1,722 584 313 406 18 3,044
sub-total 2,151 586 361 472 26 3,596 5.8
organic 1,327 0 0 0 0 1,327
mineral 3,791 696 60 66 0 4,613
sub-total 5,118 696 60 66 0 5,940 9.7
organic 2,075 1,023 80 0 0 3,178
mineral 3,427 5,905 1,037 50 100 10,519
sub-total 5,502 6,928 1,117 50 100 13,697 22.4
organic 20,403 8,440 0 0 0 28,843
mineral 890 8,310 0 0 0 9,200
sub-total 21,293 16,750 0 0 0 38,043 62.1
organic 24,235 9,465 128 66 8 33,901 55.3
mineral 9,829 15,495 1,410 522 118 27,375 44.7
(Percent) 56% 41% 2% 1% (-) 100% 100.0
G TOTAL 34,064 24,960 1,538 588 126 61,276

Only 61 percent of the farmers in the small farm category reported harvesting sod in

1987. While large and very large farms had the lowest percent of sod acreage harvested (57

percent), producers in the medium category harvested the largest percentage of sod acreage

(88 percent). Low values for the larger sized farms reflect the contribution of bahiagrass

producers and bahiagrass pasture farmers who harvest sod less frequently (Table 2). There

Table 2. Acreage of Sod Harvested in Florida, by Farm Size, Soil Type, and Grass Variety
for 1987.

FARM SIZE/ St. Centi-
SOIL TYPE Augustine Bahia Bermuda pede Zoysia Total Percent

organic 56 0 46 36 7 145
mineral 567 325 216 174 16 1,298
sub-total 623 325 262 210 23 1,443 4.1
organic 1,227 0 0 0 0 1,227
mineral 2,703 660 60 0 0 3,423
sub-total 3,930 660 60 0 0 4,650 .13.1
organic 1,879 560 40 0 0 2,480
mineral 2,195 2,551 524 25 50 5,345
sub-total 4,075 3,111 564 25 50 7,825 22.0
LARGE 18,595 585 0 0 0 19,180
organic 250 2,220 0 0 0 2,470
mineral 18,845 2,805 0 0 0 21,650 60.8
organic 21,758 1,145 86 36 7 23,032 64.7
mineral 5,715 5,755 800 199 66 12,535 35.3
(Percent) (77) (20) (2) (1) (-) (100) 100.0
G TOTAL 27,473 6,901 886 235 73 35,567

is more sod grown on organic soils (55 percent) than mineral soils (45 percent). In terms of

grass production in relation to soil type, only in the case of St. Augustine was more grass

produced on organic soils. Seventy-four percent of the St. Augustinegrass produced and

seventy-nine percent of St. Augustine grass harvested was on organic soils. Ninety-nine

percent of St. Augustine harvested on very large farms was harvested grown on organic soils

(Tables 1 and 2). Bahia was produced in greater quantities on mineral soils with nearly 50

percent grown on mineral soils in the largest farm size category.

Altogether, there were 61,000 acres in production and over 35,000 acres harvested

annually. From the figures in Tables 1 and 2, three distinct patterns emerge: 1) most

production comes from the largest producers; 2) the smaller farms are characterized by

substantially more diversity in grass-types, and; 3) production is still dominated by two

grasses, St. Augustine (56%) and Bahia (41%), with more grass produced on organic soils

than mineral soils. Bermuda, Zoysia, and Centipede make up only a minor portion of the

entire sod industry.

Irrigation Practices

Irrigation was used by over 84 percent of sod producers at some point during

production (unpublished data from survey). A number of irrigation methods were commonly

used by sod producers including fixed units such as pivot irrigation, portable units such as

tractor mounted or self-propelled travelling guns, and seepage irrigation from ditches or high

maintained water tables. Initial high costs of purchasing or developing center pivot or

gravity fed systems may be partially offset by reduced labor involved in irrigation

management. Travelling gun systems are less expensive to purchase and more flexible, but

require more labor for operation.

The irrigation system used depended upon a variety of agronomic and geographic

factors including growth phase, size of area to be irrigated, and farm location. For example,

in 1987 very large growers provided water mainly through seepage irrigation and

substantially more of this group used this method if they were located on organic soils (Table

3). Very large farmers also used tractor mounted travelling gun irrigation more than any

other farm size group. This portable type of overhead irrigation can be moved easily to

locations on demand. There was greater use of fixed center pivot irrigation and self-

propelled irrigation on mineral than organic soils (Table 3). Fixed units may be more

practical on soils that need more frequent irrigation, such as mineral soils which have little

ability to retain water. Sod producers situated on mineral soils also tended to irrigate more

during knitting or sod grow-in periods than did growers on organic soils (Table 3). The

latter group can take advantage of the greater water holding capacity of organic soils.

Grass variety was only a consideration for irrigation during the establishment phase.

Fewer farmers irrigated either bahiagrass or centipedegrass than other varieties, especially

during establishment. Both of these grasses are established mainly by seed and both grasses

are recognized by turf professionals as having good drought tolerant properties. It is more

critical to irrigate both St. Augustinegrass and bermudagrass during establishment especially

when they are propagated vegetatively from freshly harvested sprigs consisting of stolons and

rhizomes. Additionally, centipedegrass production on clay textured soils may be able to take

advantage of the greater water-holding capacity of clay soils.

Industry Concerns

Respondents were asked to rate the importance of seven problem areas (very

important, somewhat important, and not important) affecting turfgrass production. These

issues were: 1) water management-- supply and demand, 2) government regulation,

Table 3. Irrigation Methods Used by Sod Producers in 1987. Figures represent percent of
group responding 'yes" to an individual irrigation method.

Farm Travelling Gun
Size Center Pivot Self Propelled Tractor Mount Water Table
Small 11 44 11 44
Medium 44 67 0 11
Large 18 36 18 27
Very Large 12 12 50 75
Mineral 24 49 12 30
Organic 8 25 33 67

3) production efficiency, 4) release of improved grass cultivars, 5) soil subsidence and

removal, 6) nutrient and pesticide runoff, and 7) marketing.

Sod producers in 1987 were concerned with most of the issues cited. Production

efficiency and marketing received the highest rankings, while soil subsidence, nutrient and

pesticide runoff, and government regulation were viewed as the least important.

Assuming sod producers are accurate in their assertions of increasing competition, inadequate

prices, and declining profit margins, the greater concern for production efficiency and

marketing are not surprising. This would also explain their desire to obtain improved

grasses that can be used as marketing tools by promoting them as new and better products.

Grower perceptions were analyzed by their relative economic standing in the industry.

Depending on the nature of the problem, one might expect small sod operations to be

affected differently than very large ones. For instance, this disparity could stem from an

"economies of size" advantage that large-scale growers may have over their smaller

counterparts. However, when applied to production efficiency, no substantial difference was

discerned across farm size, ranging from small (<500 acres) to very large (>2,000 acres).

Marketing as an industry concern did vary across farm size categories. A strong

negative correlation was found between a sod operations's size and the degree of concern for

marketing; producers from large sod farms were more ambivalent about marketing issues

than were small farm operators. This result may lend credence to one or more of the

following hypotheses: 1) over time, large-farm operators have developed reliable and

efficient exchange arrangements with first-handlers, thereby eliminating the need for on-

going market-related programs; 2) through economies of size, large farm operators are able

to produce and sell sod cheaper than their smaller competitors, in effect eliminating much of

the competition; 3) large-farm operators have sufficient capital resources to implement

marketing programs on their own.

The potential impact of soil subsidence was ranked last as an issue of concern for sod

producers. Among others, two important factors that deplete soil reserves are biological and

mechanically caused subsidence. Biological subsidence of organic soils is exacerbated in

Florida by drainage for crop production, thereby initiating aerobic activity. A "mechanical"

subsidence also takes place, primarily in the harvesting process when a layer of soil is

removed with the root system of the grass. Over the years, the combined effects of

biological and mechanically induced subsidence have depleted soil reserves in many parts of

Florida. For instance, between 1924 and 1980, the reserves (relative depth of soils over

limestone rock) at the Everglades Research Station were reduced by 66% (Lucas 1982,

Snyder et al., 1978). However, for most producers, subsidence is not an immediate threat.

Assuming current practices continue, it will become important in 20-30 years. Some

growers also rent land as a supplement to their owned acres. One would anticipate concern

over subsidence to be inversely related to the amount of land rented. A higher ratio of

rented-to-owned land implies a greater indifference for soil subsidence. However, certain

cultural practices, such as improved harvesting methods, laser-planing to smooth fields,

better establishment procedures, and the use of machines that minimize unnecessary soil

removal may indicate grower concern for soil subsidence. Substantial grower interest in

improved production efficiencies may support this assertion.


Production and Harvested Acres

Since 1963 there has been a six-fold increase in the total amount of harvested sod

(square feet of sod sold), from 6,281 acres in 1963 to 35,569 acres in 1987 (Table 4). This

increase is largely attributed to Florida's tremendous population growth (a net inflow of

1,000 people per day for the past 10 years) and the subsequent expansion of housing

developments. A more detailed inspection uncovers some interesting features about

this industry. First, in each period, St. Augustinegrass and Bahiagrass dominated total

Table 4. Estimated Acres of Harvested Sod and Changes in Relative Importance for 1963,
1974, and 1987, by Grass Variety.

Grass ---------- Year----------------
Variety 1963a 1974b 1987c
-------- Harvested Acres --------

St. Augustine 4,272 14,285 27,473
Bahia 1,487 7,855 6,901
Bermuda 133 402 886
Centipede 340 723 235
Zoysia 49 66 74
TOTAL ACRES 6,281 23,331 35,569

Source: Smith, C.N. and R.H. Brewster, 1968.
Source: Florida Crop and Livestock Reporting Service, 1976.
Source: Cisar, et al., 1988.
Total does not include 1,053 acres in "unknown" category.

----Percent Change----
1963-74 1974-87
--- Percent ---
234 92
428 (12)
202 120
112 (67)
34 12
271 52


Table 5. Farm Size Characteristics of Acres in Production vs. Acres Harvested for 1963 and

Farm Acres in 1963 Acres in 1987
Size Planted Harvested Ratio Planted Harvested Ratio

Small 112 60 .53 200 131 .65
Medium 310 150 .48 660 581 .88
Large 866 302 .35 1,245 711 .57
Very Large 1.169 697 .0 4.755 2.706 .57
AVERAGE 341 146 .43 1,132 936 .70

harvested acres 92% in 1963, 95% in 1974, and 97% in 1987. Bermuda, Centipede and

Zoysia remained minor grasses in overall importance. Second, there were marked

differences in the growth rates of harvested sod between the 1963-1974 and the 1974-1987

periods. For all grasses, this rate of growth declined substantially in the latter period,

dropping from an average of 260 percent in 1963-74 to little more than 50 percent in 1974-

87. However, the most important reductions were with bahiagrass (-12%) and

centipedegrass (-72%). The decline in bahiagrass sales was offset by growth in the sales of

St. Augustinegrass, as evidenced by its sizable acreage increase, relative to all other grass


In personal conversations with the authors, sod producers indicated that harvested

acres generally accounted for roughly half of total acreage in production. This assertion

appears to be more valid for producers in 1963 than it was in 1987. On the average, sod

producers in 1963 harvested 43 percent of total area under production, compared to 70

percent in 1987. The most likely reason for this higher harvesting ratio was the increased

emphasis placed on St. Augustinegrass and the dramatic decline in bahiagrass production.

The fact that St. Augustinegrass has a shorter production period (by 3-6 months), is

considered an aesthetically higher quality grass with greater market potential, and commands

a significantly higher price than bahiagrass, helps explain this phenomenon. In terms of farm

size, producer categories with the most dramatic shifts in varietal emphasis were the medium

and large growers, who nearly doubled their ratio of harvested to produced acres.

Specifically, this ratio increased from .48 to .88 for medium growers, and from .35 to .57

for producers in the large category (Table 5). Again, this is due largely to the financial

benefits derived from St. Augustinegrass production. For instance, in 1987 eight out of the

nine medium-sized growers specialized in this grass.

Another way to examine the data in Table 6 is by changes in the output of sod

growers. The average farm increased its output of harvested sod more than six-fold between

1963 and 1987. Medium and very large growers showed the most dramatic increases for

both planted and harvested acres: for example, the largest sod farm in Florida today grows as

much turfgrass as did the whole industry in 1963 (Figure 1). At the same time, the number

of new firms that entered the cut sod industry roughly doubled. Therefore, total industry

output expanded both because of the influx of new producers as well as the tremendous surge

in individual farm output of harvested sod.

Farm Size 1963 Medium eo
Large 124866
Lrg 4 Small 200

Large 86 Medium 810
Smell 112

Very Large 1169

Very Large 4766
Farm Size 1987

Figure 1. Changes in Average Farm Size (in Acres) for Florida Sod Farms Between 1963
and 1987.

Prices and Industry Value

Growers assert they are experiencing the consequences of over-supply as firms

compete aggressively for market share. In spite of increasing production costs, prices have

continued to fall or remain stagnant. Although the nominal prices indicate substantial gains

over this 25 year period for most grass varieties (Table 6), adjusting these figures for

inflation reveals a picture consistent with producer observations (Table 7). Except for St.

Augustinegrass, all sod prices dropped significantly since 1963. The 73 percent decline in

the price of bahiagrass helps explain why sod growers have cut back production of this

variety (Table 3, column 5). Even the price gain realized by St. Augustinegrass (one-half

cent per square foot for the 25 year period) was negligible.

An estimate of the value of the Florida cut sod industry is shown in Table 8. These

figures represent constant 1983 dollars and were calculated by multiplying the total square

feet of grass sold by the weighted farm gate price. Although the value of the industry has

increased four-fold since 1963 (from $23 million to $103 million), this should not be

interpreted as an improvement in the economic welfare of sod producers. Falling real prices

may indicate to some that, in general, sod producers today are worse off than they were 15-

20 years ago. However, Tweeten (1989) argues that using deflated prices as measures of

real terms of trade, buying power, parity, or fairness, may be misleading. Rather, a more

accurate measure should adjust for changes in productivity of that commodity. For instance,

a farmer who doubles his output for a given bundle of resources only needs one-half the real

commodity price to maintain purchasing power. He underscores this argument further by

noting that, on average, a given real value of farm production resources produced 3.15

Table 6. Average Nominal Prices (Farm Gate) for Florida Cut Sod in Cents per Square Foot
for 1963 and 1987.


St. Augustine
Weighted Avg.

1963 1987
-------- Cents/Sq.Ft. --------
2.25 8.14
3.99 3.68
4.22 11.26
4.28 13.92
7.40 22.45
2.85 7.42

Total Avg. Annual
----------- Percent ------------
261 11.3
(8) (0.3)
166 7.2
225 9.8
2Q4 8
192 8.2




Table 7. Average Real Prices (Farm Gate) for Florida Cut Sod in Cents per Square Foot
for 1963 and 1987".

Grass Year Change
Variety 1963 1987 Total Avg. Annual
-------- Cents/Sq.Ft. -------- ---------- Percent ------------

St. Augustine 6.73 7.16 6.4 0.28
Bahia 11.94 3.24 (72.8) .(3.20)
Bermuda 12.26 9.91 (21.5) (0.93)
Centipede 12.81 12.25 (4.3) (0.18)
Zoysia 22.15 19.76 (10.8) (. 47)
Weighted Avg. 7.84 6.53 (13.65) (0.60)
SBase year for Consumer Price Index (CPI) was average for period 1982-1984. CPI for
1963 = 33.4 and 1987 = 113.6. Data taken from 1989 Statistical Abstract, U.S.
Department of Commerce, Bureau of Census.

Table 8. Estimated Gross Value of the Sod Industry in 1963 and 1987, in Nominal and Real

Grass 1963 1987

Variety Nominal Real

Nominal I Real
*Millionsof Dollars----------------------

St. Augustine 4.18 12.51 97.43 87.49
Bahia 2.58 7.72 11.05 9.92
Bermuda 0.24 0.72 4.34 3.89
Centipede 0.63 1.18 1.42 1.27
Zoysia 0.16 0.47 0.72 0.64
Total $7.79 $23.30 $114.96 $103.21
a Calculation for dollar value was: Value = {Harvested Acres (*) Average Weighted Price
per square foot (*) 43,560 square feet.
b Base year for Consumer Price Index (CPI) was average for period 1982-1984. CPI for
1963 = 33.4 and 1987 = 113.6. Data taken from 1989 Statistical Abstract, U.S.
Department of Commerce, Bureau of Census.


times as much in 1987 as in 1910-1914 as measured by the USDA's multifactor productivity

index (Tweeten, 1989 p.37). Tweeten's argument, however, may not be appropriate within

the context of turfgrass production. Productivity enhancement comes from one or both of

the following sources: a) increased output per unit area, or b) increased output per unit time.

Unlike food commodities with high per acre yield potential, such as wheat or corn where

seeds are the final product, because sod is "sprigged" vegetatively as opposed to "sown",

yield enhancing programs that improve seed-head productivity are not applicable for


Options for unit increases in output are limited to different harvesting regimes, but

these alternatives have important economic trade-offs2. The most commonly employed

harvesting method involves leaving strips or "ribbons" of sod to regenerate later crops.

Although these strips are only 2-3 inches wide, over a one acre area harvestable grass and

consequent gross revenues are reduced by up to 30 percent. Ribbons also compromise the

uniformity and texture of turfgrass. In addition to making harvesting more difficult, ribbons

reduce the turfs quality because of the unevenness that develops between the old and new


An alternative practice is to clear-cut sod. This is initially more appealing because

grass normally left in the field for propagation is now harvested. Other benefits include: 1)

improved quality resulting from a more uniform thatch of turf; 2) easier harvesting that is

2Whereas fertilizers, pesticides, and irrigation programs can improve sod quality in terms
of color, thatch density, and tensile strength, it has little affect on sod productivity (e.g., more
turf per square foot).

less damaging to expensive equipment (from the absence of ribbons), and 3) more flexibility

in scheduling production and harvesting activities. Since the planting date is determined by

the grower, alternative rotation strategies can also be employed. For instance, in periods

where the sod market is depressed, growers located on histosols (organic or muck soils)

might reduce financial risk by diversifying into other commodities. Rice production, which

requires flooding the land for a good portion of the growing season, would provide an

additional benefit for firms with severe soil subsidence problems. Biological oxidation

occurs when organic soils are exposed to air. This aerobic activity could be minimized if

organic soils were water-covered for most of the growing season. Although clear-cutting

may bring higher prices from quality conscious buyers and improve a grower's current cash-

flow situation, this practice has shortcomings as well. Re-sodding a clear-cut area involves

costs that are unnecessary when using the strip method. Examples of these costs include

land preparation (disking and rolling), sprigging at a minimum per acre rate of 1,500 square

feet (3 pallets), use of overhead irrigation until the root systems become established, and

multiple pesticide applications, particularly to minimize unwanted weeds and grasses.

Moreover, sprigging extends the interval between harvesting periods by roughly two to three

months. Over a four to five year time-span, this time differential constitutes the loss of one

additional crop.

Increasing the frequency that sod can be harvested from a given area is a second way

to enhance efficiency. This can be accomplished by either utilizing grasses with shorter

production cycles or by adopting improved cultural practices. To date, there are no faster

growing varieties available to Florida growers. However, implementing better cultural

practices has been widely regarded as crucial to enhancing production efficiency. Examples

of these practices include a close monitoring of water needs, pest management, mowing, and

optimal timing of fertilizer applications (McCarty and Cisar, 1989).

Labor Use

A phenomenon common to U.S. agriculture has been a decline in the number of farm

operators, from 3.9 million in 1960 to 2.1 million in 1987 (U.S. Department of Commerce).

This is attributed to "pull-and-release" factors that affect the flow and distribution of farm

labor. The nonfarm sector exerts the "pull" through increased demand for labor and the

"release" mechanism is the labor-saving technology in the farm sector. The tremendous

labor-saving and output-increasing farm technology made larger-scale farms more feasible

and profitable. Results of release-and-pull factors are observed more specifically in changes

over time in the index of farm inputs and its components. Although the total index of inputs

used in farm production has not changed much over the past 50 years, major shifts occurred

in the composition of inputs. During this period farm labor declined over three-fold while

the use of mechanical power and machinery more than quadrupled (Johnson and Quance,

1972; Mamer, 1984). It is within the context of this out-migration of labor in the farm

sector that we now discuss labor in the cut sod industry.

Between 1963 and 1987, permanent workers per farm increased in all size categories

except for very large farmers (Table 9). The number of seasonal workers also increased

except for small farms. A reduction in the permanent labor force was limited largely to

growers of bahiagrass and very large St. Augustinegrass producers. The cut sod subsector

experienced a labor trend contrary to the general agricultural sector, and even from more

comparably aligned sectors. For instance, five years ago 70 percent of Florida sugarcane

was harvested by hand, the last production activity not mechanized. Today only 30 percent

is harvested manually and there is a clear movement to eliminate hand labor entirely within

the next few years (Alvarez, 1991; Polopolous, 1991).

The sod industry's continued reliance on labor is probably explained best by the

nature of the tasks involved in grass production and with the rather unique labor market

found in Florida. Some of the largest sod producers have claimed that current farm

equipment is not cost effective, nor does it have the capacity to handle large volume jobs.

Large labor teams can cut, stack, and move sod more quickly than automatic harvesters. In

addition, continued heavy use of farm labor may also be due to the unique labor market to

Table 9. Permanent and Seasonal Labor Use in Sod Production for 1963 and 1987.

Farm Year/Labor Type
Size -------- 1963 --------- --------- 1987 ---------
Perm Seas Total Perm Seas Total
--------------------- Average Number Per Farm -------------------------
Small 4 6 10 7 5 12
Medium 6 2 8 174 4 21
Large 13 4 17 27 16 43
Very Large 46 8 54 38 13 51

Farm Size, in acres (1963): Small (0-114); Medium (115-206); Large (207-274); Very
Large (275 +) Farm Size (1987): Small (0-499); Medium (500-999); Large (1,000-1,999);
Very Large (2,000 +)

Table 10. Acres in Production as a Function of the Permanent Labor Force, 1987.

Farm Grass Type
Size St. Augustine Bahia Total
----------------- Average Acres Per Person ------------------

Small 48 31 35
Medium 41 250 64
Large 51 282 141
Very Large 116 1.174 645
Average 64 434 221

which these operators have access. Political instability in many Caribbean and Latin

American countries, in conjunction with Florida's strategic geographic location and

diversified agriculture, have insured a steady supply of capable, low-cost labor. This is

particularly true for the larger farms located in the southern portion of the state. A second

related point is that labor offers more operational flexibility. Because many workers are

seasonal, the farm does not incur the high fixed costs for machinery. Seasonal labor, as a

variable cost of production, is employed only when needed. Under current labor market

conditions and within certain farm sizes, the marginal value product of labor (the net benefit

obtained from one additional unit of an input) could well exceed that of machinery, which

would explain the sod industry's incentive for increased use of hand labor.

Although hired labor remains a vital factor of production in the sod industry,

discussing the number of total workers per farm sheds little light on labor efficiency or the

substitution of labor for capital. One gross efficiency measure is to compare changes in the

average number of acres under production with changes in the average number of employees.

Results are best shown through the use of ratios of labor-to-land (N/L). Lower ratios

indicate greater overall efficiency in the management of a farm. These ratios were calculated

from the data in Tables 7 and 9 for the two periods 1963 and 1987. Two observations are

noteworthy. First, in both periods the smallest farm size category was less efficient than the

three larger ones (1963-- Small N/L = 0.17, Medium 0.05, Large 0.06, Very Large 0.08;

1987-- Small N/L = 0.09, Medium 0.04, Large 0.06, Very Large 0.02). Secondly, labor

efficiency improved considerably during this period, particularly for the smallest and largest

farm sizes. When examining the average acreage under production on a per labor basis, the

most efficient farm size category in 1987 was the very large farm (Table 10). This finding

differs from the 1965 study in which the large farm size category was considered most labor

efficient (Brewster). However, this result is heavily influenced by differences in grass

varieties grown. Ninety percent of grass produced by the largest farms was bahiagrass, a

low labor intensity, low-valued crop in comparison to St. Augustinegrass.

Market Channels

A channel of distribution may be defined as an organized network of agencies and

institutions which, in combination, perform all the activities required to link producers and

users in order to accomplish the marketing task (Boone and Johnson, 1977). From a seller's

point of view, the channel permits him to find and supply users of his good. From a buyer's

viewpoint, the channel finds and delivers the goods or services desired. Marketing channels

perform a crucial role as a basic component in a firm's marketing strategy. Delivering a

product to consumers at the right place, at the right time, and in the right amounts is

essential to successful selling. This implies that marketing channels must not be a static

network but rather must change in response to changing economic conditions.

Empirically, these marketing concepts have shaped and changed the distribution

channels for Florida's sod industry. A conceptual illustration is shown in Figure 2. Since

1963, perhaps the most notable change in the industry's channel structure has been

a decline in percentage sales to retail and landscape outlets (Table 11). Brokers or

Figure 2. Market Channels and Outlets in Florida's Sod Production Industry.






,Retail /--

:( scape (~

- "Home

S rUtility i

" Recreation


wholesalers who function as middlemen between producers and the final consumer had, by

1987, become an important intermediate outlet for the flow of cut sod. In 1963, retail

outlets accounted for 97 percent of total sales, whereas by 1987, this outlet had been reduced

to 70 percent (Table 11). This finding is particularly salient in that it is contrary to recent

market developments in more traditional areas of agriculture. For instance, Haydu (1988)

found that many large farm operators were increasingly circumventing market intermediaries

and selling directly to buyers. Rather than sell grain to marketing firms, the largest

farmerswere themselves negotiating the exchange arrangements and shipping direct to grain

elevators. The underlying incentive for this behavior was the cost savings to the buyer in

avoiding a value-added step in the distribution process. Sod producers, however, face a

different set of circumstances and conditions. These special conditions are illuminated when

using a farm size comparison.

Table 11. Changes in Market Channel Use and Average Sales by Different Farm Size
Categories, 1963 and 1987.

Farm Sample Size -------- Market Outlets ------- Average Sales
(N) Broker/Wholesale Retail/Landscape Per Farm
Size 1963 193 197 1963 87 1963 1987 1 1987
--Number- -------------Percent------------ ---Acres---

Small 29 18 3 9 97 90 60 131
Medium 4 11 21 50 79 50 150 581
Large 5 9 0 21 100 79 302 711
V-Large 5 Q 0 28 100 72 697 2.706
Total 43 46 3 30 97 70 146 936

For the three largest categories, market channel use shifted appreciably towards more

indirect sales (Table 11). In Figure 2, rather than sell directly to retail outlets or landscape

firms, sales to brokers and wholesalers have risen markedly. However, percentage changes

within a category provide little insight into the overall shifts in channel use. For instance,

although medium size growers nearly doubled their use of indirect outlets, their impact was

relatively minor since they represented only 10 percent of total sales in 1987. By contrast,

large and very large farms constituted 85 percent of sales, with the latter group representing

roughly two-thirds of the total. In other words, with average per farm sales exceeding 2,700

acres for the largest producer, a 30 percent increase in sales to an alternative outlet had far

greater significance than did a similar increase in a medium-sized operation with sales of

only 580 acres (Table 5, col.2).

This utilization of more indirect sales, particularly by the larger producers, signified

an important industry trend toward specialization of tasks. Three factors, one demographic,

one economic, and one biological, contributed to this shift in the use of market outlets.

First, Florida began to experience a tremendous surge in its population as retirees from the

Northeast and Midwest began immigrating in large numbers. Numerous service industries

soon flourished, which provided additional incentive for people to immigrate. From 1970 to

1989, Florida's population grew from 5.1 million to 12.8 million, a net growth of roughly

1,000 people per day (Florida Statistical Abstract). Population growth, therefore, served as a

"demand-pull" mechanism for future economic growth.

New housing starts, and with it the landscape contracting sector, expanded to meet

this impressive growth. This became the second factor that reshaped the market outlets for

sod. The landscape sector grew both in terms of numbers and size of operations. From only

several hundred landscape firms in the early 1960's, the industry grew to nearly 4,000 by

1988 (Florida Statistical Abstract). An economy of size in housing developments resulted in

extremely large tracts. In turn, these large tracts required large quantities of sod for

landscaping purposes. The sod production industry adapted to this new environment by

altering its own structure dramatically. Since 1963, the largest farm size has increased from

a little over 1,100 acres to nearly 5,000 acres (Cisar, et al.).

Finally, the highly perishable nature of harvested sod also contributed to this shift

away from sales to the retail sector by the largest growers. Once cut, sod must be laid and

irrigated within 24 to 48 hours, the time factor being largely a function of the sod's original

quality, handling conditions, and the local air temperature. Therefore, since the upper limit

of only two days, an efficient distribution system was imperative. Hence, it is likely that the

very large farmers found it more economical and less risky to permit independent shippers to

handle their distributional transactions. Another aspect is that large producers simply

outgrew their capacity to effectively meet demand at the smaller retail level. As firm size

grew, their comparative advantage shifted increasingly to sod production and away from


On the other hand, smaller producers have clearly established their own market niche

serving the many smaller landscape contractors and retail firms that predominate within the

industry. Farmers in the smallest size category still have the greatest proportion of their sod

shipped directly to retail outlets and they also rely heavily on company owned trucks to

deliver their sod. Moreover, rather than specialize, some small farmers vertically integrated

their firms to supplement farm income. A movement towards operational diversity serves to

offset this group's inability to gain from the economies of size realized by larger producers.

Concluding Comments

There have been important changes in Florida's cut sod industry in the past 25 years.

First, the sod industry has shown a remarkable ability to adapt to a rapidly changing

environment, providing adequate supplies of sod despite unprecedented increases in demand.

One consequence of this demand is that the size of individual firms has grown substantially.

Ninety percent of all sod was harvested by the two largest size categories in 1987.

Trends in labor use have changed differently from most agriculture commodity areas.

In the past 50 years there has been a pronounced substitution of capital for labor throughout

the farm sector in general, resulting in significant declines in the number of farm operators.

Yet despite increased labor-saving technology in the cut sod subsector, the use of both

permanent and hired labor on a farm unit basis has actually increased in the past two

decades. This development is attributed to the unique labor market found in Florida where,

because of abundant supplies of cost-effective labor, many farm operators find this a

preferred management choice.

Finally, the distributional mechanisms of this industry appear to be evolving

differently from systems elsewhere in agriculture. For instance, many of the largest

producers of food and fiber commodities have begun by-passing market intermediaries and

selling directly to the buyers. The incentive for this behavior is the cost savings realized by

circumventing market intermediaries. The sod industry, on the other hand, appears to have

moved in the opposite direction. Large producers in particular are relying on market

intermediaries to sell and distribute their product. Specialization of tasks, both in the

production and distribution of sod, may be a growing trend in this industry.


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