As we've all seen at the gas pump over the past month, the war in Iran has lead to a dramatic rise in fuel prices. During our last Green Committee meeting, Dr. Mark Walker (a 27 year Committee member) asked how the conflict would potentially impact our golf course operation. There was good reason to ask this question...
While Urea has traditionally been one of the most cost-effective sources of Nitrogen in granular fertilizers, the battle in the Middle East has changed that. With 30-50% of the world's Urea being transported through the Strait of Hormuz, prices have skyrocketed. There is clearly potential for sticker shock if you are a big user of Urea, however we still anticipate being in good shape with regard to our Fertilizer budget for the year.
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| Urea prices have doubled since this time last year. |
One of the primary reasons we don't foresee fertilizer becoming a budget-buster, is our limited use of products which contain Urea as their source of Nitrogen. A single spring application of a Urea-based fertilizer in the primary rough accounts for about 90% of our annual usage of this material on the golf course. As to the cost of this fertilizer, we had price-shopped the product and ordered it in February, prior to the issues starting in the Strait in March.
What about fertilizer for the tees and fairways? Our lone granular fertilizer application of the year for this fine turf is completed using a product with the Nitrogen component being derived from organic ingredients, not Urea.
So, will there be any financial impact? Yes, there are a couple of parts of our operation that may be affected by higher fuel prices. Obviously one of these is the price of gas and diesel we are paying for our equipment's use. While we do have some electric vehicles and mowers, the majority of our fleet is still powered by gasoline.
The second is the indirect cost that will be passed along by those who provide us with services such as trash removal, or transporting bulk loads of sand to us. Fingers are crossed that prices will not remain high for long, and will drop back down before our seasonal use ramps up over the next couple of months.
