Materials Update: October, 2021
Our industry is facing significant materials and supply shortages that have created challenges for all companies involved. Manufacturing disruption, raw material shortages, damaging weather events and global transportation costs have led to product shortages and increased costs. The following is a summary of the current issues and our expectations for the months ahead. We hope that this information will help you to navigate through these challenges and achieve success in your business. We will continue to monitor these conditions and update you as the situation changes.
Raw Materials Shortages
Demand for many common green industry raw materials (plastic resin, wire, printed circuit boards, urea) remains at record highs, thereby driving up product costs. These costs were expected to normalize towards the end of Summer, however most indications are that they will remain inflated into the Spring of 2022.
- Plastic resin prices have increased from 50-200+ percent, impacting irrigation rotors and sprays; PVC/poly pipe and fittings; and stormwater drainage pipe and fittings.
- Copper costs have increased 42 percent, impacting irrigation and lighting wire.
- COVID-related manufacturing shutdowns and increased consumer demand within the semiconductor industry have created an ongoing worldwide shortage, impacting irrigation controllers and lighting transformers.
- Urea costs have increased 65 percent, and fertilizer has increased 115 percent overall. This has been exacerbated by Hurricane Ida, which caused multiple plant closures, driving another $100 per ton spike in urea cost.
- Resin manufacturing capacity was diminished following Winter Storm Uri, impacting rotors and sprays; PVC/poly pipe and fittings; and drainage pipe and fittings. The storm also negatively affected nursery plant material supply.
- Seed crop losses of up to 50% due to summer heat and weather conditions are anticipated to continue to drive up costs through the end of the year.
Many manufacturers have faced both labor shortages and wage increases:
- More than thirty percent of manufacturers report that it's more difficult to find talent now than before the COVID-19 pandemic, and nearly eighty percent expect to have trouble attracting talent going forward.
- Significant increases in service industry wages (including restaurants) are drawing hourly associates away from manufacturing jobs.
Freight shortages and pricing, which became challenging in 2020, have increased lead times and cost for many products - especially freight intensive products such as hardscapes, fertilizer and plant material:
- U.S. freight shipments are up more than 10 percent and U.S. freight expenditures are up more than 40 percent.
- U.S. diesel retail fuel prices are up nearly 40 percent.
- U.S. freight expenditures are up 42% since August 2020.
- Driver shortages have pushed the number of loads for every available truck to above 150.
- Container shipping costs from Asia are up as much as 10x since the beginning of 2021.
- Record levels of congestion in major U.S. ports are contributing to shipping and freight delays.
Landscape Materials Outlook
Based on our assessment of the current situation and industry conditions, we expect continued shortages and/or price inflation on many of the most frequently purchased products within our industry:
- Global resin shortages expected to limit PVC pipe production and keep costs unusually high.
- Irrigation and lighting electronics will be in short supply for the foreseeable future due to ongoing semiconductor chip shortages.
- Fescue seed supply is expected to remain constrained through the Fall of 2022.
- Plant material in larger than 7-gallon sizes is expected to remain in tight supply going into 2022 and beyond. Items such as large upright evergreen screening material, commodity items (hawthorns, loropetalums, hollies, ligustrums, etc), skip laurels, Japanese maples, and other specialty intrinsic items likely will remain in short supply for several years.
We also believe that manufacturers may implement further price increases during the remainder of this year and through March 2022 for core irrigation products, PVC pipe, plant material, and hardscape products. We are working diligently with our manufacturing partners to mitigate the impact of these factors and provide you with as much advance notice as possible.
Things you can do to protect your business:
Plan supply needs as far in advance as possible.
Coordinate with your SiteOne branch for all upcoming projects. We will do everything possible to secure your materials ahead of manufacturer price increases.
Limit Quote Window
Limit project quote windows for your customers to 15-30 days while we remain in this unprecedented and dynamic period.
Let Customers Know
Share this information with your customers.
Prices may vary from branch to branch and online. Branch is not responsible for the errors or omissions in pricing and quantity. Suppliers of the products listed on this Web site are subject to change at any time. While the individuals and entities responsible for this catalog attempt to provide accurate supplier information, for these reasons and others, the suppliers noted may not be the supplier of the product ultimately sold by SiteOne or distributors of products.