MISSISSIPPI STATE – When Mississippi sod farmer David Rainey says, “Business is better than last year,” he is not suggesting it is good.

The Alcorn County farmer said he sees greater challenges in turning a profit in 2012 than when he started Rainey Sod Farm about 36 years ago. Rainey said he started downsizing his sod business when the housing market bubble burst in 2007.

“The cost of production is still making it tough. It may be easy to make a dollar, but it’s getting hard to hold anything out of it for the profit margin,” he said. “I’ve cut my sod acreage in half and my labor costs by more than half.”

Rainey converted some of his older, nonirrigated sod fields to soybeans when turf sales declined.

Wayne Wells, Mississippi State University Extension turf specialist, said the sod market is tied closely to home sales and new construction. The economic downturn in recent years prompted many of the state’s sod growers to reduce their sod acreage, diversify with other crops or leave the business completely.

“Building construction depends mostly on two things: economic conditions and the weather,” Wells said. “When people are able to landscape and build, more sod is sold. Even though sod seems like a nonperishable product, growers need to move it. Otherwise, their input costs will continue to grow from mowing, pesticides, fertilizer and irrigation to keep it healthy.”

James Henderson, Extension forestry specialist, said reports on national and regional construction show the industry is strengthening.

“Over the past year, housing starts are up almost 24 percent nationally and 27 percent in the South,” Henderson said. “This is the third year of improvement for new home construction since 2009. Given the current level of both new and existing homes on the market, we should see continued increases in new home construction.”

Rainey said producers who want to get into the sod business need to choose their locations carefully.

“It is better to locate near good markets to reduce freight costs,” he said. “Buying out an existing farm can be more profitable in the long run than starting a new one, because you won’t be competing with another business for sales.”

Rainey is also finding success with some of the less common sods.

“Bermuda is what most farms grow because builders like the less expensive grasses,” he said. “But we are seeing an increased interest in zoysia grass. The people who chose zoysia love it.”

Wells said after Hurricane Isaac exits the state, growers will be keeping an eye out for increased disease pressure.

“Wet leaves, cloudy skies and high humidity increase fungal organism activity. Most sod producers hope for good weather to prevent the need for any treatment,” he said. “Regardless, they want the sod to be clean when it transports, because when it gets to its destination, water will be added. If any disease is present, it will explode.”

Wells said fall armyworms can cause a similar challenge.

“Producers do their best not to ship sod that could cause an insect outbreak,” Wells said. “However, under hot summer conditions, it takes only three to five days from the time an adult fall armyworm moth lays her eggs till hatch, so oftentimes it unjustly reflects poorly on the producer when the sod becomes infested with armyworms shortly after installation.”