JIM BARRETT, ANALYST, CL KING & ASSOCIATES: (Audio in progress) -- I do have a strong buy on the stock. I would like to introduce Dave Evans who is the Chief Financial Officer; Jim King, who is Senior Vice President whose duties encompass Investor Relations as well. Dave, take it away.
DAVE EVANS, EVP & CFO, THE SCOTTS MIRACLE-GRO COMPANY: Thank you, Jim. Good morning, everyone. So we have got about 20, 25 minutes. I'm going to take you through a brief overview of the company and I know we have some Q&A to follow this. But for those of you that aren't familiar with our company, we participate in the lawn and garden category, primarily US-based. I will give you a little bit of context for that later in the presentation, but we feel like there is tremendous positives about this company.
We participate in a healthy category with strong demographics. We are the number one player in every major segment in North America. We have got trusted brands in the category, unrivaled consumer relationships. I will share with you some of our innovation. We are very proud of that. We think we have excellent retailer relationships and a world-class supply chain. If you kind of summed it all up, that is what I'm going to tell you about through the course of this presentation.
I think the point at the bottom is an important one as well in that our CEO, through his family, also has about a 30% stake in the equity of the company. So I think there is high alignment between the management team and the shareholder as an outcome.
So as we go through this presentation, I am first going to focus on the near term. I'm going to share with you some of the challenges we face and how we are addressing those challenges. And then I will focus the balance of the presentation, giving you some more context for why we think the long-term model is a strong and healthy one and how we plan to grow that model.
So first of all, where are we today? Well, this is, as everyone experiences, interesting times. If you look at our business, we are about a $3 billion business. Of that business, about $500 million is focused in consumer fertilizers. The consumer fertilizer category has seen some tremendous inflation in input costs. The balance of the business inflation has been more typical of the consumer price index. So I am going to tell you a little bit more about our fertilizer business, but just ask that you keep in mind that what I am talking about is a $500 million segment within our business.
Nevertheless, within that segment, we are seeing spikes in our inputs, which were in nitrogen, phosphorus, potash. Our single largest input is urea. It is the one we talk about a lot, but we also have other inputs -- MAP, DAP, ammonium sulfate, potash and they all are fairly represented by looking at this graph of urea.
What you see in the urea graph is we had a fairly stable input and in the springtime, we saw that input spike dramatically. In one month, we saw this input nearly double in cost. For perspective, our commodities in general as a company were about a 35 gross margin, $3 billion in sales. So cost of goods are about $2 billion and of that, 35% to 40% are really subject to volatilities such as urea, fuel, resins, inputs such as those. So we have seen some recent moderation in these inputs. I think the price of a barrel of oil is fairly well-publicized, but we also have seen some modest pullback as well in our MPK inputs.
What are we doing to address this for next year? It is a dramatic cost. Actually what we expect our costs to go up next year is somewhere in the neighborhood of $250 million …