High-priced discussions

Considering both inflation and ongoing worldwide supply-chain issues caused primarily by COVID-19 disruptions, it’s safe to say we’ve all been directly impacted by soaring prices for almost everything. Housing, food, clothes, fuel, heating costs, eating out, automobiles, computers, phones. The list is endless.

We’ve seen this not only in our personal lives, but also as superintendents and managers of golf courses trying to purchase products to manage the properties we maintain. In 2021, prices for most goods jumped on average anywhere from 3 to 5 percent, and it wasn’t unheard of for some goods to have jumped to even 10 percent.

One of the problems with soaring prices for goods and products across the board is when you have certain products (due to preexisting shortages and conditions) whose prices had already been soaring before the pandemic.

Pre-pandemic, perhaps the one main product that had been affecting golf course superintendents and managers with skyrocketing prices was fertilizer. This trend toward soaring prices predated COVID-19, and thus has been adversely affected by the pandemic even more than many other products that weren’t experiencing shortages beforehand.

So many factors have an influence on fertilizer prices. One main factor to consider is that fertilizer is affected by worldwide trends because it is a global commodity. It is influenced by market conditions beyond the control of United States. Fertilizer prices are heavily influenced by other countries’ demands for it. The price is also influenced by the transportation rates to get the fertilizer to all destinations, nationally and internationally.

Fertilizer production is also heavily influenced by energy costs, as fertilizer production requires a large amount of energy to convert the raw chemical materials into a usable fertilizer. For example, prices for natural gas (the primary building block for most nitrogen fertilizers) have risen dramatically in the last year, especially in Europe, where they have increased by as much as 300 percent. Throw in a global pandemic, and essentially the production and distribution of fertilizer has slowed or even stalled as a response to pandemic safety precautions.

Jacob Close is a local sales representative for Simplot where I work in western Washington, and an invaluable source for me. Jacob has noticed the trends in the industry, both in pricing as well as how superintendents are choosing to deal with it. He’s seeing different strategies from superintendents.

“Some supers are simply buying less,” Close tells me. “Usually something like cutting a granular fairway application rate in half. I would say most of the cost cutting has occurred outside of greens programs.”

One thing Jacob points out is that most golf courses have had profitable years coinciding with the increased prices, thus some superintendents have simply bitten the bullet and increased their budgets accordingly. He estimates about 75 percent of his clients are sticking with their normal programs and have simply increased the fertility line item in their budgets.

One of the challenges of increased rounds on golf courses in the last couple years is the challenge of keeping sufficient turf on tees. Because of skyrocketing seed costs, Close has actually noticed some superintendents have chosen to buy more expensive fertilizers to meet this challenge instead of giving in to the crazy seed prices.

I decided to check in with a few superintendents to get their insights on the fertility cost and supply problems facing us all.

Dave Swift is the superintendent at Minnehaha Country Club in Sioux Falls, South Dakota. Although he is aware of the problem, he had a fairly optimistic view of superintendents’ ability to handle the situation.

“Golf course superintendents have always maintained a great attitude and figured out how to get by when faced with tough times,” he says. “This is just another situation, and most will figure out how to reduce their nitrogen applications if they haven’t already.”

Swift adds there had been recent trends in how golf courses were applying less nitrogen before the soaring prices and supply chain issues hit us. “I can remember over a decade ago when I was still applying several granular applications of nitrogen wall-to-wall annually,” he says. “I now apply much less than two pounds of N annually, compared to double that 10 years ago.”

One strategy I’ve used at my course in western Washington is to utilize Early Order Programs more than I used to, locking in not only lower prices but also knowing you will have the product when you need it (something that never used to be an issue but we all know certainly is now). Because of the increased play we’ve seen the last two years, cutting back on fertility has simply not been an option for me. EOPs have never been a more valuable tool.

Tim Busek, superintendent at St Ives Country Club in Johns Creek, Georgia, has also seen that strategy used by his colleagues around the Atlanta area. “Some clubs I know have already ordered two years’ worth of supplies back in September to lock in the lower cost and gamble that prices would keep elevating,” he says. “However, only a few clubs have that luxury.”

Another strategy Busek mentions is one used currently at St Ives, and that involves making sure all the powers-that-be are aware of the situation and keeping it in the forefront. “Having an open line of communication with our general manager, club president and greens chairman has been invaluable,” he adds. “We started adding costs of materials to our monthly green committee meeting, so everyone is aware of how volatile pricing has become across our industry.”

Busek agrees with Swift that superintendents are uniquely capable of figuring this out.

“Everyone, regardless of club level, is going to have to make adjustments at some level,” Busek says. “But I’m sure, like every crisis before us, we will come out of this as better superintendents with just as good, if not superior playing conditions.”

Joe Kunze, manager of golf operations for Arvada, Colorado, had an interesting take on high fertility prices.

“I think using your own fertilizer programs instead of being sold a program by a rep or company is the way to go,” Kunze says. “Superintendents are extremely smart people who have a ton of training and education on how fertilizers work. I think we are capable of developing our own programs that fit our own budgets, rather than trying to fit a certain generic program into an existing budget.”

Kunze adds, “I think every single item that goes into the spray tank needs to be evaluated by itself. Is it really making a difference? Everything should be evaluated against the amount of return we are seeing from the products.”

His view on not only creating your own program, but essentially running your own trials, was one I hadn’t really given much thought to before. Like Swift and Busek said, superintendents will figure out the problem that’s facing them. It’s what we do.

Ron Furlong is the superintendent at Avalon Golf Links in Burlington, Washington, and a frequent Golf Course Industry contributor.