Weak demand continues to hold a lid on grass-seed prices in many parts of the country. “In general, orchardgrass seed prices have slipped considerably from where they were a year ago,” says Steve Wallace, Midwest territory manager for Barenbrug USA. “Prices for other grasses are off marginally.”
Sluggishness in the general economy is a major factor holding some seed prices in check. Wallace notes that grasses like tall fescue and perennial ryegrass are used for turf and forage production. “There’s been less demand for turf,” he says. “People haven’t been building homes. And when they’re not building homes, they’re not putting in sod. As a result, right now there’s a pretty good supply of seed out there, and that’s driven down prices.”
Oversupply also underpins low orchardgrass prices, says John McCulley, administrator for the Oregon Orchardgrass Seed Producers Commission. Noting that Oregon producers grow 98% of the country’s orchardgrass seed, McCulley reports that production in the state dropped to around 10 million pounds last year. That’s down from 15-16 million pounds in previous years. Even so, a flood of cheap imports, mostly from Denmark, has more than made up for the domestic production shortfall. “A lot of the seed that’s coming in is selling at prices below the cost of production for our growers here.” Net result: Oregon growers saw prices drop from a record high of $2/lb in 2008 to the 50¢/lb range last year.
While U.S. production is expected to increase to 13 million pounds in 2010, McCulley says improvement in the dairy and beef industries could lead to strengthening seed prices later this year. “Many livestock producers struggled to survive last year. A lot of them put off seeding new pastures or renovating existing pastures. We think there’s a lot of pent-up demand. As things continue to get better in those industries, demand for seed and prices will likely pick up.”