FEATURE
What in the
WORLD
IS GOING ON? The Business Side of End User Pricing in 2021/2022 BY PAUL GIORDANO, PH.D.
O
ur industry has a lot to be thankful for. The past 24 months have proven to be a net benefit in terms of rounds played, participation, and overall revenues for most golf facilities. Last week, I read an article in Golf Digest discussing the recent boom in capital investments among private clubs across the country. Signs of a healthy, more sustainable golf market compared to the not so distant past. But we are certainly not exempt from the economic challenges of inflation and the global supply chain crunch. The turf world has been especially impacted by fuel prices which ultimately drive one of the most critical components of a turf maintenance operation - fertilizers. Coming from the basic manufacturing side, I would often get asked about the “macro” aspects of product development and costs associated with bringing new active ingredients into the agricultural market and subsequently the turf industry. The numbers behind the scenes are staggering and often surprising to those unfamiliar with all that is involved. On average, to bring a new plant protection product (fungicide, herbicide, insecticide) to
market from discovery to commercialization costs roughly $300 million and takes around 11 years. Production agriculture drives this process because the only way a company can feasibly make a return on that investment is with a blockbuster product that is used on thousands of acres across many different crops. Understanding the costs associated with research and development and some of the upstream processes helps to shed some light on the overall price of innovation in our industry.
Credit: CropLife America
Course Conditions
| Spring 2022 Issue
9
