Compost/Organics Market Trends and Update

STAR Summit September 1st 2009Mark Rose, Living Earth

Compost & Mulch are Not Commodities There is not an everyday market for compost

and mulch products. Like a paper millCompost and Mulch products are purchased

on an as needed basisCompost and Mulch producers must market

their products

Living Earth TNLA Show

What Drives the Sales Trends and the Price of Compost and Mulch Products?The EconomyPrivate CompaniesMunicipal and Other Governmental

OperationsIllegal/Noncompliant Operations

The EconomyThe “Staycation” has kept homeowner and

the existing home landscaping demand strongNew landscaping both commercial and

residential are off by approximately 50%TXDOT projects are not effected

Private CompaniesPrivate companies that:1. Operate within compliance regulations2. Pay their taxes3. Have insurance including workers

compensation Are good competition for each other and good

for the industry

Municipal and Other Governmental OperationsHave been known to produce more material

than they can sellAt times sell their materials way below

private competitors (AKA Dumping)

City’s mulch disposed of in Landfill

Illegal/Noncompliant Operations Known to be poorly financedKnown to Dump material on the market to

get quickly needed cashKnown to cheat on the USCC Seal of Testing

Assurance Program to get sales

Industry IssuesNoncompliant/Illegal OperationsFiresOdorsNew Regulations

Illegal/Noncompliant Operations Continue to cause problems for good

operators. Example: Undue facility inspections

Politicians and Governmental agencies are under pressure to do something and illegal compost and mulch operations. What will they do? Impose more regulation on good operations

Illegal Site-Harris County

Illegal Site-East Houston

Illegal Site-Galveston County

Fires Damages the Industry!Most fires at Compost/Mulch facilities are at

illegal non compliant sitesFires Damage the image/ perception of the

entire industryPeople only remember the FIRE at the illegal

site and remember nothing about all the good things the properly operated site has done over the years.

Mulchie

Mulchie

Odors Make the Industry StinkSites that have odor problems are either

managed improperly or are composting a feed stock that should not be processed on their site or not used at all.

Most facilities that that have odor problems are poorly located.

All people remember is if that compost place stinks they all stink! NOT IN MY BACK YARD!

New RegulationAfter the huge fire in Helotes Texas (San Antonio Area)

area legislators proposed HB 2541 in the 2007 legislative session.

This legislation was proposed to regulate pile sizes, storage capacity, turn over, etc at compost/mulch facilities statewide

A group of private operators met several times with legislators about the concerns of the proposed bill being to restrictive

After the legislators realized that none of the operators from the San Antonio area were involved the bill was “bracketed” to only to apply to Bexar County

HB 2541 Passed requiring the TCEQ to adopt rules to put restriction on compost/mulch operations in Bexar County.

The same group of private operators (once again none from San Antonio) met with the TCEQ Waste Permits Division and the TCEQ Executive Director several times to get the rules written that would not destroy the industry in Bexar County.

The TCEQ welcomed to group’s input and the rules that were adopted are very reasonable compared to the TCEQ’s first version.

These rules go in effect TODAY September 1st

Lesson to be learned: Be involved in the legislative and rule making process!

CONCLUSIONSTHERE IS PLENTY OF COMPOST/MULCH

ON THE MARKETPRICING IS EXTREMELY COMPETETIVETHE INDUSTRY REMAINS CHALLENGED BY FIRE ODOR AND OTHER NON COMPLIANCE ISSUES

THANK YOU

PLEASE FEEL FREE TO ASK ANY QUESTIONS THAT YOU MAY HAVE