January 24, 2008 | General

Compost Market Outlook

BioCycle January 2008, Vol. 49, No. 1, p. 22
Environmental applications such as slope stabilization and storm water management, as well as use of compost in blended products, are expected to continue pushing market growth this year.
Ron Alexander

As welook back on 2007, it is clear to see that organics recycling in the United States (and North America) had another good year. Some very large composting facilities on the West Coast started up, interest has grown in food scrap composting and digestion, and compost markets continue to expand. With this said, our industry still has many challenges including:
o Some larger composters “dumping” product onto the market, negatively impacting market values;
o Green energy technologies competing for our feedstocks;
o Difficulties in funding end use research; and
o A general lack of industry data.
Much of our marketing success up to this point has been aided by excellent government funded research completed in the 1970s and 1980s, as well as product development creativity and market investment. These efforts have allowed us to establish large, higher-value compost markets, such as landscaping, topsoil manufacturing, turf management and even agriculture in some regions of the U.S.
While finding monies to fund new research has become more difficult over the years, some is being spent in order to establish newer environmentally based applications, such as erosion control, bioretention ponds and green roofs. And although the amount of research completed in these arenas may be considered by some as limited, it is “backed-up” by excellent field performance results. Indeed, the future of compost use many be in bioengineering, using compost and other “soft” design methods to replace walls, storm water vaults, etc.
Unfortunately, most of the compost (and mulch) production and marketing data available is anecdotal, because we as an industry are not collecting the data necessary to track trends, successes or failures. Little, if any, national statistics exist and therefore we have no baseline to measure ourselves against. This lack of data has become more problematic over time, as it limits our ability to “sell” the benefits of our industry to the general public (and the politicians who can make or break us).
So based on these facts (and lack of quantitative national data), what have we seen in terms of compost and mulch markets over the past year? And what can we expect in 2008?
The hard work put forth by composters (and their sales staff), researchers and others has allowed for the development of large, higher-value bulk compost markets across the U.S. The focus on developing markets, such as general landscaping, turf establishment (home lawn, utility, golf courses and sports turf), topsoil manufacturing, etc. has allowed the composting industry to grow into a major supplier of landscape and related products.
Compost’s growth into an industry “staple” has also impacted the sale of compost through green industry resellers, such as garden centers and landscape suppliers. Growth in these markets has been aided by development of end use specifications. Further, use of compost in erosion and sediment control – for slope stabilization, vegetation establishment, storm water management – has expanded rapidly (also in part due to local, state and national specifications), and is expected to continue on this path.
Although the majority of compost is marketed in bulk form and unblended, compost is being found in more and more blended soil products (in both bulk and bagged form). In many markets across the U.S., manufactured topsoil containing compost is commonplace and seen as an important tool by the landscaping industry. Additionally, many large bagging companies use compost as their main ingredient in many of their soil products. These include not only topsoil, but potting mixes, turf topdressings, green roof mixes, etc.
The ability to use compost as a replacement for other organically based products (e.g., peat) has been key to its expanded utilization. It is apparent, based on recent history, that the use of compost in high value turf establishment will continue, as will its use in environmental applications. Compost’s success in these applications has to do with its consistency (for a bulk product) and its cost effectiveness (compared to other products or management methods).
Over the past year or two, some interesting trends also have appeared that can affect the success of compost marketing programs. Some of these same issues also can improve the sale of mulches produced from recycled feedstocks (composts, dyed wood mulches). These include:
Housing Starts, Droughts: Composters in certain parts of the country have been affected by the slow down in home construction, while others have been affected by the droughts. We have seen in the southeastern U.S. that without adequate rain, landscape and turf installations slow down (and the same can be said in periods of excessive rainfall). Establishing strong and diverse markets during the “good times” helps sustain composters through these “bad times.”
Environmental Benefits: Issues pertaining to landscaping, turf management and agriculture have been extensively publicized in newspapers and industry publications – everything from schools wanting to ban the use of pesticides, to reducing the use of specific chemical fertilizers (e.g., in lake states such as Minnesota, and Michigan), to contamination of surface waters (e.g., Soils for Salmon efforts in the Puget Sound region of Washington State), to carbon sequestration. Many of the concerns being brought to light can be aided by compost use. Turf Magazine’s August 2007 issue even discussed the possibility of using golf courses as a means to sequester carbon.
Climate Change: Changing weather patterns appear to have led to more droughts and floods. Using compost as a means to hold more plant available water in landscapes and agriculture seems like a “no brainer,” and using compost in storm water management applications is becoming less of a novelty and more of an established practice. Further, construction trends promoting low impact development and LEED certification, and others requiring sediment control, etc., will likely favor use of compost.
Peat Usage: Although a very useful product in nursery production and golf tee/green construction media, wet Canadian winters (making it difficult to harvest) and higher petroleum costs have made peat more expensive. This provides an opportunity for high quality compost to be used as a peat replacement or diluent.
Being Green: Growth in the certified organic farming industry, desires of home gardeners to purchase greener products and mass merchants wanting to appear greener are all expected to be positive signs for compost usage in 2008. For example, research released in October in Europe showed that organically grown produce contained higher levels of specific vitamins and antioxidants, when compared to conventionally grown crops.
Oil Prices: The continued higher prices on oil and petroleum, and thus nitrogen fertilizer, may also continue to aid the sale of compost to farmers.
As we continue to work collectively to build a strong and growing composting industry, we must constantly monitor new opportunities and competing interests. For example, will the rush to green energy from thermal processes swoop up valuable organics in the municipal waste stream? We also must continue to reinvest into our own compost related businesses, as well as the industry at large. Investment into our industry’s health is necessary if we expect it to pay dividends back. This is the case when creating new and stronger compost markets, or collecting the data we need to prove our industry’s environmental and economic worth.
Ron Alexander is president of R. Alexander Associates, Inc. (Apex, North Carolina, 919-367-8350, www.alexassoc.net), a company specializing in product development and end use for organic recycled products. Alexander is also the author of “The Practical Guide to Compost Marketing and Sales” and has almost 25 years of experience in compost marketing.

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