PESTICIDES/FERTILIZERS: Getting Beyond Cost

By Fungicide applications have not seemed to make much business sense for most lawn care operators (LCOs). Fungicides are more expensive than typical fertilizers and pesticides. The service also requires knowledge about turf diseases, possible multiple treatments and proper timing. All this makes the service challenging to sell.

"Lawn care operators still have a difficult time getting customers interested in fungicide applications on lawns," says Kyle Miller, senior technical specialist for BASF's turf & Ornamental Products Group, Raleigh, N.C.

Despite this challenge, disease is a turfgrass reality and customers tend to not be forgiving when their lawns are infected and damaged. LCOs who provide the service separate themselves from the competition - even if their profits are not as high as for other services provided. "Lawn care operators are looking for ways to add value to their business and customers, and fungicides offer that opportunity," says John Price, technical account manager, Dow Agrosciences, Marysville, Ohio.

That's the strategy many LCOs such as William Hildebolt, owner, Nature's Select Premium Turf Services, Winston-Salem, N.C., have taken to maintain customer satisfaction without drastically increasing prices. "Clients with showcase properties want you to cure their disease problems," he says.

WHAT IT COSTS. Fungicide prices vary based on whether the product is a systemic or contact fungicide, and whether it is labeled for a broad or narrow range of diseases. A typical fungicide application will be at least double the cost of other lawn care applications, says Steven Vandervest, president, Turf Management Lawn Care, Lawrenceville, Ga.

Miller says LCOs used to paying 50 cents per 1,000 square feet for a herbicide may be shocked to find that an application with a narrow-spectrum fungicide costs $3 per 1,000 square feet and $6 to $7 per 1,000 square feet for a broad-spectrum fungicide.

Vandervest says a contact fungicide may cost about $45 for a 2.5-gallon container, whereas a systemic product may cost $200 to $300 per gallon. However, such costs can be deceiving if LCOs don't consider the product's residual effect and application rates, adds Harold Enger, assistant director of franchise support, Spring-Green Lawn Care, Plainfield, Ill. For instance, a contact fungicide may cost less upfront but only provide seven to 14 days of control. In contrast, the systemic fungicide may last 14 to 28 days or 21 to 28 days for some newer products.

"Systemics cost more initially, but the length of control is longer," Vandervest explains. "This reduces the cost per day of control by the product. Contact fungicides generally need to be applied two to three times more often depending on disease pressure. We have to justify the additional expense of the product and factor that into our pricing structure. It is not feasible to use the contacts during high disease pressure because the applications on high-end accounts will need to be done every seven to 14 days. The higher the disease pressure, the shorter the frequency between treatments."

LCOs should also take application rates into account, Vandervest says. In general, contact fungicides are applied at a heavier rate because they control the fungus on contact. Systemic products tend to have lighter rates because they get translocated throughout the plant, he explains. Enger suggests LCOs look at their cost per 1,000 square feet to determine their product expenses.

PURCHASING POWER. LCOs can keep some fungicide costs in check with strategic purchasing practices. Historically, fungicide manufacturers have marketed and designed fungicides for the golf course industry, selling them in large quantities. But "current products in the marketplace better suit LCOs so they don't feel like they have to buy products in bulk quantities," says Steve Stansell, market manager for Syngenta Professional Products, Greensboro, N.C.

Several manufacturers are or soon plan to begin offering fungicides in pint, quart or water-soluble packets for LCOs who do fungicide applications on a limited basis. "Newer packaging like 3-ounce packets that each cover up to 5,000 square feet is more lawn care-specific, even geared more toward the use of backpack sprayers," says Eric Kalasz, fungicides business manager, Bayer Environmental Science, Montvale, N.J.

LCOs have different approaches for purchasing fungicides. Hildebolt buys a powder-form product by the pound and says he pays $372 plus 7-percent tax. Citing label instructions, Hildebolt says he uses 0.2 to 0.4 ounces of product per 1,000 square feet for brown patch, but rates vary depending upon the targeted disease.

Each year, Hildebolt sends bid lists to several vendors and selects the lowest price. The bid lists include materials he's requesting and the volume of product he typically uses. Hildebolt says he tries to buy the product as needed to avoid excessive inventory.

Other contractors like John Chiarella, president, Ultimate Services Professional Grounds Maintenance, Wolcott, Conn., purchase products in bulk quantities because, in Chiarella's case, 75 percent of his clients receive fungicide treatments. "We do so much of it, so we buy it in either gallons or bags," he says, adding that he pays $150 to $200 per bag or $500 per gallon for the products. Miller estimates that LCOs can save up to 25 percent in fungicide costs by purchasing this way.

Vandervest estimates that 25 to 30 percent of his clients purchase fungicide treatments. He purchases a variety of systemic and curative products in different package sizes. He sometimes uses water-soluble packets because they're easy to handle. He also purchases fungicides in liquid form that come in 1- or 1.5-gallon containters. "We use different products at different rates and rotate them," he says. "There's a contact and a systemic fungicide and if you use the systemic over and over again, diseases start to get resistant to that product."

Vandervest buys the water-soluble packets at a wholesale price of approximately $50 per packet. He pays $200 to $300 for a 1-gallon systemic fungicide and $45 for a 2.5-gallon contact fungicide. He purchases is fungicides on an as-needed basis because the company is located 10 minutes from a service center that keeps most of the products in stock.

Like Vandervest, Enger says LCOs with Spring-Green's Midwest franchises often purchase fungicides as needed because disease pressure there is typically lower than in more humid regions. "We purchase them when we see a problem and we buy them in a 2-ounce bottle or a 2.5-gallon jug, depending on the materials we're using," he says. "We generally don't' go out and buy a case. Treating a lawn is not like treating a golf course."

CHARGED UP. Once LCOs determine their product costs, they have a starting point for pricing applications. Turf Management Lawn Care charges $9 to $10 per 1,000 square feet for most fungicide applications, according to Vandervest. Included in that price is a 25-percent markup for materials.

Preventive programs are the most profitable fungicide applications because the company can include them in routine lawn care routes, says Vandervest, who estimates that 25 to 30 percent of the company's clients are on a preventive program. Turf Management's preventive programs are usually targeted toward cool-season grasses and begin at the end of March when temperatures near 80 degrees and humidity reaches 70 percent, says Vandervest.

Curative applications are typically less profitable because they require that technicians make multiple stops, which means Vandervest must pay for additional labor and fuel costs. In general, he says fungicide applications result in 15-percent profit margins for the company compared to 25-percent profit margins for other lawn care applications.

Spring-Green typically charges one to two times the price of its regular lawn care rates for fungicide services, Enger says. The company charges and average $80 per application, but that rate varies depending on lawn size and the amount of material used, Enger says. Most of these applications are not include in a regular lawn care program, except in warmer, more humid regions where the fungi problems are more prevalent.

Likewise, Hildebolt says that because of weather variables his company's fungicide services are not built into a program unless requested by a client. "We do have some lawns in which we can predict brown patch will occur and they would be signed up for routine applications," he says. "For those clients, we would perform applications every 28 days after the environmental conditions become ideal for spore activity."

In the Winston-Salem area where Hildebolt is located, the company begins its preventive programs in May when the first disease pressure usually occurs. Nature's Select charges about 25 percent more for its fungicide applications, according to Hildebolt. But that doesn't mean the service is more profitable than typical lawn care applications. "We're trying to get the same margins as other services, but I don't think fungicides are any more profitable and, in some cases, can be less profitable because the materials are so expensive," he explains. "For instance, if you formulate a 10-percent overage, you have just shot your margin."

But not all LCOs are experiencing lower profit margins with fungicide applications. Chiarella estimates that fungicide treatments are 25 percent more profitable than traditional lawn care applications because he factors in profit for the company's horticultural specialists whom he dispatches to properties to diagnose disease problems.

Chiarella typically marks up fungicide applications 100 percent, but markups can vary depending on the type of fungus, how difficult it is to eradicate and how many applications it requires. The company might charge $600 if the product costs $100 per ounce for 1,000 to 3,000 square feet, he says.