Green-industry profits withering

by | November 28, 2007 12:00 am

By Sharon Omahen University of Georgia

By Sharon Omahen University of Georgia

Severe water restrictions may have you cutting the number of times you wash your car, clothe s and pets. But if you rely

on landscaping for your l ivelihood, the drought is likely cutting the size of y our wallet, too.

University of Georgia experts with the Geor gia Center for Urban Agri culture recently surveyed

more than 1,500 people i n this category.

“We knew the drought

was hitting the industry hard,” said Ellen Baus ke, the program coordinator with the center. “W e had no idea how hard.”

Bauske and her colleagues surveyed members of the professional a ssociations that comprise

the state’s Urban Ag Coa lition. The survey focused on the drought and

how it has directly affected them and their bus inesses.

About 350 people responded from companies

in irrigation; wholesale nursery, greenhouse and sod production; landscape and turf i nstallation and maintenance; wholesale, rewholesale and garden retail sales; and golf course s.

The survey showed th at the drought is clearly c utting these companies’ i ncomes and increasing la yoffs, she said.

It showed the firms’ av erage 2006 earnings at jus t over $6 million. Their es timated income losses to the drought averaged 43 percent, or $2.58 million.

“The urban agriculture

industry has grown stea dily as the population of Georgia has increased,” Bauske said. “T hough it is difficult to assess the strength of this a gricultural sector, best estimates put the number o f firms at approximately 7,000 with $8.16 billion

in revenue in 2005.”

If the survey is representative of the industry, the drought’s bite on urban agriculture incomes is $3.5 billion.

The drought has hit so me businesses harder tha n others. “For example, t he nursery and plant wh olesale businesses have si gnificant financial investments in plant materials, which are no longer s elling,” Bauske said. “Th ey’re incurring catastrophic losses.”

The drought has taken a toll on the urban-ag work force, too. On average, each company reported laying off six wor kers so far. They anticipate laying off 11 by the e nd of 2007.

UGA economists figure landscape workers’ a verage income is $26,757.

If this value is representative of the industry, the lost wages due to more th an 24,000 layoffs could co me to $644 million by the year’s end, Bauske said.

The UAC includes me mbers of the Coastal Lan dscape and Turf Professional Association, Georgia Irrigation Association, Georgia Green Indu stry Association, Georgia

Sod Producers Association, Georgia Turfgrass A ssociation and Metro Atlanta Landscape and Turf

Association.

Participants responded to the survey between Oct. 4 and Oct. 8, l ess than a week after the northern corner of the sta te began operating under

a level-four drought response.

“This area of Georgia hadn’t yet felt the forc e of the full impact of the tougher water restriction,” she said. She figures the adverse effect of the drought and water re strictions may intensify with time.

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