Mulch Business

I

IPMArborist

Anyone familiar with the mulch business? I've heard some say that it's a waste of time with too much overhead and others seem to make money - maybe it depends on the local market. I'm curious if it's a generally profitable business and if so how much? What are the opinions of selling wholesale vs. retail, etc.? Currently I'm spending tons of money to have our chips hauled off just be incinerated...seems like a waste. Anyone familiar with the Rotochopper grinders?
 
I seem to have this debate annually. We get rid of our debris at $0 cost and that is what stops me. Mulch seems to be a business that requires a lot of overhead in equipment. I have always boiled it down to increasing revenues at what I'm already good at vs. learning something new.

I think this debate changes based on disposal costs. If you are generating enough debris and the overhead makes sense, the pay back could be in the form of reduced cost. I have a good friend who faces this issue. He has a mulch business that breaks even, but no disposal cost gives him a real edge in the market for tree work.

There is no pat answer to this question. Many years ago I wanted to branch out into all kinds of things... My dad told me to concentrate on what I'm good at... This advice has worked for me. I think there is a learning curve with any new venture...

I would be interested to know what you decide?
 
I'm looking into this too. What is the going rate for mulch? Do clients demand the chips be reground for uniformity or are people selling raw chips from operations?

There isn't much of a market in my area for mulch to compare to other than one retail nursery who sells reground cedar woodchips (coloured) for $90 per yard. I think that i could develop a market here and supply it with mulch.

v
 
Here in Stanwood we have a local business, Lenz Earthworks. They have a quarry, sell rock products, and are the closest green waste dump. They make composts, died mulches, and have a product called "hog fuel". I guess that is like the first grind, and it's a 2-6" long mulch. For a 8 yard load delivered it's around $25/yard. I've been trying to get $20/yard for my 8ish yard load. I haven't quite got that yet, as I'm willing to be haggled down since otherwise it's no money, I can dump for free where I live. I'm working on educating the market as to the benefits, and "need" for mulch. PS. the mulch I'm selling is straight out of my bandit 90, so, mostly it's nice, but it's not bark or died mulch.

I'd check into the local prices, and go from there. My price for a load, even when haggled still covers my time and fuel at least, and it's cash flow... It has resulted in employees not being fully busy while I'm gone, which is a detail that needs to be worked out. Currently I climb, and unless it's organized right I need to be there for most work to commence.
 
i stockpile all my wood waste.logs,brush and chips.once a year i pay a company to come in and grind all the material into mulch.due to cost i don't use any colorants,just sell it natural.get $20 a yard picked up.cost about $15k to do it.sell between 4k and 5k yards a year.for me it makes sense,there is a good mulch market where i am in MA and i have to deal with the material anyways.the cost stings a bit in the off season but in my opinion it is worth it.oh and you'll need quite a bit of space and if you have neighbors close by they usually don't appreciate a 1000 horsepower grinder rattling the pictures off the walls in there house.
 
Free resources means more profit.
If you have a loader and dump truck you should
be able to make good money.

I had neither for the last 1o plus years and still made
good coin mulching. Actually having to pay for the it
frown.gif
.

Finally have a dump box. Bye Bye loadhandler
smile.gif


Mulching is a science like everything else we do, the more you understand soil science, c:n ratio, importance of organic matter, tree specific mulches like hardwood or evergreen, toxicities etc it becomes an easy sell.

Mulching is an art as well. Fine tuning a bed edge, spreading consistently, the final rake and tamp and top dress. In the end it is no different than gift wrapping a present. Know what I mean?

If you got a client that is skeptical just mention the worlds leading Botanical gdns mulch their trees.

Organic matter/mulch with all the levels of decay, H2O, CO2 are the single most important things for tree vitality.

Another good analogy that translates well to HOs and property owners is you grow bigger and sweeter carrots with lots of Om. So true with trees!
smile.gif
 
I recently purchased a Rayco 240hp grinder. We have to pay to dump in this area and I don't use chippers so it made sense for me to buy a grinder that matched my operation. It was a more affordable unit and makes some good looking mulch. It is also pretty maneuverable which opens up opportunities to contract with larger clients that have to get rid of waste. Golf courses, H.O.A's, etc. This was my big decision last year. It was either the grinder or a crane. I figured the crane was going to create even more of a brush pile since we would be blowing through our backlog, so I decided to get the grinder first. I have only had it for four months so this Spring will be my first year to sell. I am just going to drop the bottom out of it and get it moving for now. If I break even, I will be happy. I'm with TCI, I want to keep doing what I know but I have seen some big operations who do a little of everything and succeed. Sky's the limit in this industry. One of my favorite things about it.
 
I think that we should watch the biofuel industry. At this point, there is not much money in it, but I am hoping eventually the prices will rise. I have done some research, and there is not a hand-fed chipper available in the US that makes consistent chips with no longer sticks in the mix. And those longer sticks is what jams up the feed systems for the boilers. Around here there is poultry barns and greenhouses that have been putting in chip burners, and they are paying $45 per ton for chips. But those chip need to be screened to a 3" maximum. My disc chipper with sharp knives and a new bed knife will still send 12" long sticks through. I talked with both Bandit and Vermeer about it, both said that they were watching the biofuel industry as well.
 
Thanks for all the input. Bonner 1040 - that company scares the hell outta me! Looks like a good clean operation but with insane amounts of overhead. I'm looking at the Rotochopper CP-118 which sells for around $100,000. I'm looking to keep costs down and prices high. No one sells mulch in our area except for boutique nurseries which get around $45-$50/ yard. I'd like to sell straight to nurseries and landscapers and not mess around with small orders. Does anyone have experience with this machine? Tree Care - I agree that focusing on what I already do is probably the best bet. Maybe I could sub it out? My only concern is staging large volumes of chips - fire hazard, zoning, etc. I certainly won't look to get into this if I can't make money.
 
SonshineTreeCare - Just to clarify...you're selling raw chips to customers? If so, I'd like to hear how this is going. I've always given them away and it seems like I should charge at least a simple delivery fee. Does anyone else have experience selling raw chips as mulch?
 
For a long time I had free dumping near my shop. When that location got developed I had to find another disposal scheme. I ran an ad and sold the chips for some nominal cost.

Even though I explained that these were straight out of the chipper and might not all be nice matchbook/poker chips a couple of people complained. They thought that they were 'buying' chips.

That lead me to change things about. From then on the chips were free but there was a delivery charge. End of complaints!
 
Hi IPM, my name is Evan btw.

I've only been in business here for a year. I've given away many loads of chips, and sold two. I have only very recently been letting people know that I charge for them when they ask. People are often asking for chips, I let them know that they are for sale. Like I said before I got haggled down, that was on both the two loads I've sold. 1st load sold for $50 and "$200 worth of heirloom organic vegitable seeds" 2nd load sold to same person for $125. Both times I asked for $165 w tax. It's going to take time, and an educated market, but I think they'll buy. Back on many loads of chips were sold by companies I worked with, for up to $500/16 yard load. At minimum I would look to cover your time/fuel/vehicle expenses.
 
I bought a CP 118 and a Beast 3680 540hp machine in March of 2008. It has been quite a journey learning the mulch business. I have produced and sold over 95,000 yards of mulch. Most of it colored. There is a world of information most mulch producers either won't tell you or just plain don't know. Some say screen some say don't screen some say dry colorant some say liquid. I wanted to produce a specific product and traveled to Pennsylvania, Florida, Tennesee and Alabama to talk to guys who were in the business as I would be no competition to them. It took me a year or more of research to pull the trigger on it but found out quickly I missed some key information. The mulch piles I stocked to color were gone in a few weeks. The red mulch can't be colored from chips out of the chip truck. (not to my satisfatction anyway) I needed thirty gallons of water per minute to keep up with production. I needed a bigger grinder to pregrind and grind logs. My skid steer will not work to feed the grinder or load semi trucks. I needed more delivery trucks. $450,000.00 and two months later I was rolling. I predicted spending $650,000 so that wasn't bad but I was not prepared for it to ramp up so quickly. There is a video on my web site that shows basically our mulch operation in action. www.northamericantree.com If you really want to get into it call me. I may be able to save you some trouble getting started. My new Rotochopper CP 118 will be delivered in two weeks. My 2008 has 1700 hrs on it and is out there grinding as I write this. Hope it helps you with your decision. Its certainly a big one. Good luck.
 
Thanks for the good info. All good things to know. At this time I'm not sure I could get a worthwhile return on a $400,000 investment in my local market. Good luck with your operation!
 
The $400,000 is not an estimate of what you would spend to start up. It is just to show you what it can cost if the market opens up like mine did. I could do five times the volume we do now but I don't want to. You can put a color regrind system together with used equipment (950 Morbark tub and color unit) for less than $85,000. A removable top Chip truck to deliver 15 to 20 yards at a time would work and a skid steer or farm tractor to load out. Just over $100,000 and your rolling. Dye is about $3.50 per yard to do it this way and you can also grind small logs (16" minus) into mulch. This will eliminate a three or four crew tree company's mulch problem and turn some good profit as well.

Thank you Oroboros. We work hard on our vids.
 
When I saw this I just had to mess with my buddy in the mulch business... my e-mail to him and then his reply:

Subject: Ha, trying to decide how I'm going to respond...

... these guys are asking about the mulch business... should I say, "I know this guy that had to shut down a plant due to Obama; or "I know this guy that all he does is buy sh** from cabelas, guns off craigslist, shoot dove at his plant, leave early to fish, hunt, yada yada". Got to think about it some more...

His response: "I know that guy too..... And he just bought a bunch of night vision as well. Mulch be good to me."

The average response time of a 911 call is 23 minutes, the response time of my .45 ACP is over 950 feet per second and has 13 more following behind.

... kiddin' aside if you can get in it and you've done your homework I say go for it. These guys run 3 morbarks (not sure of the HP).... they did shut a plant down in Florence SC. The plant in Rocky Mount, NC runs hard. The owner I messed with is very hands on; whenever possible they maintain their own gear. They have a fulltime sales rep on salary (probably plus bonus or commission; I don't know and I don't ask) and I got to give him props; he won't hesitate to load a truck with a fork lift; or scoop mulch all day.. it's the owner's brother and he isn't your typical sales rep. We give the owner a hard time at our friendly poker game (we hardly play anymore) if he has a good hand his goiter grows.... if you want to see it grow about 3x in less than 30 seconds just bring up D.C. and their stupid crap ... sometimes I feel I need to go over my cpr steps when he gets fired up... they've been around awhile, work hard and it's been good to them.. link below .. good luck.

http://www.kamlar.com/
 
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