Published on 11/01/07

Green-industry profits withering

By Sharon Omahen
University of Georgia

Severe water restrictions may have you cutting the number of times you wash your car, clothes and pets. But if you rely on landscaping for your livelihood, the drought is likely cutting the size of your wallet, too.

University of Georgia experts with the Georgia Center for Urban Agriculture recently surveyed more than 1,500 people in this category.

"We knew the drought was hitting the industry hard," said Ellen Bauske, the program coordinator with the center. "We had no idea how hard.”

Bauske and her colleagues surveyed members of the professional associations that comprise the state's Urban Ag Coalition. The survey focused on the drought and how it has directly affected them and their businesses.

About 350 people responded from companies in irrigation; wholesale nursery, greenhouse and sod production; landscape and turf installation and maintenance; wholesale, rewholesale and garden retail sales; and golf courses.

The survey showed that the drought is clearly cutting these companies' incomes and increasing layoffs, she said.

It showed the firms' average 2006 earnings at just over $6 million. Their estimated income losses to the drought averaged 43 percent, or $2.58 million.

"The urban agriculture industry has grown steadily as the population of Georgia has increased," Bauske said. "Though it is difficult to assess the strength of this agricultural sector, best estimates put the number of 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 some businesses harder than others. "For example, the nursery and plant wholesale businesses have significant financial investments in plant materials, which are no longer selling," Bauske said. "They'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 workers so far. They anticipate laying off 11 by the end of 2007.

UGA economists figure landscape workers' average income is $26,757. If this value is representative of the industry, the lost wages due to more than 24,000 layoffs could come to $644 million by the year's end, Bauske said.

The UAC includes members of the Coastal Landscape and Turf Professional Association, Georgia Irrigation Association, Georgia Green Industry Association, Georgia Sod Producers Association, Georgia Turfgrass Association and Metro Atlanta Landscape and Turf Association.

Participants responded to the survey between Oct. 4 and Oct. 8, less than a week after the northern corner of the state began operating under a level-four drought response.

"This area of Georgia hadn't yet felt the force of the full impact of the tougher water restriction," she said. She figures the adverse effect of the drought and water restrictions may intensify with time.

Sharon Omahen is a news editor with the University of Georgia College of Agricultural and Environmental Sciences.