SUPPLY AND DEMAND DICTATE NATIVE
GRASS SEED PRICES FOR 1998
The simple economic rule of supply and demand is evident as ever in this years native grass seed market. There is no doubt that prices will be up this year, and in some cases rather drastically. There were over 2 million acres of native grasses, nationwide, signed up under the 15th CRP sign up. Not all acres will be planted to warm season grasses though. Some of the western and inter mountain states will use native cool season grasses, however, demand is still high for native warm season grasses. I talked with several native grass seed companies to see what their predictions were for 1998 and how they were handling seed orders.
In general, industry wide, it looks as though it will be an average production year, however there are still several variables yet to determine the final outcome. Until it's in the bin you can't count on anything. An early frost could wreck havoc. Through a majority of the seed producing area a cool spring delayed native grass development. Native warm season grasses are at least two weeks behind normal, if not more. If we were to get an early frost it could seriously affect the production of indiangrass and little bluestem in particular. In the farther northern areas, big bluestem could be affected as well. Throughout the Midwest there were anywhere from 4 to 7 weeks of drought during July and August. Consequently big bluestem did not produce many seed stalks. When the drought broke in mid- August, big blue sent up more seed stalks which improved the outlook for big blue seed. However, the seed ripening will be so indeterminate, optimum harvest time will be difficult to maximize production. There is some seed ripe, while there are some seed stalks just now blooming. By now most of the switchgrass appears to be made, with an average crop. Initial reports out of Kansas and Oklahoma are that there is lots of native little bluestem and sideoats.
The seed companies I talked with, Sharp Brothers Seed Company, Stock Seed Farms and Osenbaugh Grass Seeds, all are handling seed requests the same way. They are booking your orders now, which basically amounts to taking your request and developing a waiting list. When seed prices are established they will send you a confirmation, you will then either accept or reject the confirmation. Either a down payment or entire payment will be required at that time. The order will then be filled when the seed is available.
Many landowners, district conservationists and seed dealers, remembering the crunch of the last CRP flurry 10 and 12 years ago, are already trying to buy their seed for next spring, or at least get it reserved. Since spring this year I have been promoting early ordering as well. The majority of the seed companies are sold out of last year's production and are not quoting any prices for new crop seed. Initially I thought, right, all the seed producers are wanting to do is wait until the prices get sky high to sell their seed, but it is actually just the opposite. The legitimate seed vendors are trying to hold the costs down. At this point in time they don't have any seed in the bin and don't know how much seed they are going to produce. Once they know how much seed they have and compare it against how much they have booked they will know how short or long they are. The seed companies are hoping that they will have enough production to meet their bookings. If so, they can hold the price on the seed to a reasonable level. If not, they have to go out on the market and buy seed from other people, then prices are at the mercy of the seller. There are seed scalpers out there now, equivalent to ticket scalpers at a ball game, that have already set prices high and are trying to sell their seed or their production, hoping to capitalize on the buyers fear that there won't be any seed available.
There is one major difference with this CRP sign up though, the Farm Bill allows a landowner to plant a cover crop and delay planting, if necessary, due to high prices or limited supply. The legitimate seed companies are hoping buyers will shy away from those high prices; thinking that perhaps high prices will cause the landowner to plant a cover crop and delay their CRP planting until the next year, spreading out the demand. The scalpers, being caught with inventories of seed will then have to lower their prices to be competitive with the legitimate producers.
All in all here's the way I see it: I predict seed prices will be between $10 and $15 per PLS pound. Go ahead and book your seed as soon as you know what you will need. If the price is too high when you get a confirmation, reject the confirmation and plant a cover crop. Stay away from buying high priced seed now. Deal only with reputable dealers. Buy only tested seed, with a test date of September this year or later. If a deal sounds too good to be true, it probably is. As always, buyer beware.
EDITORS NOTE: Since the writing of this article seed companies are starting to price seed, with no promises. Harvest is now underway and seed won't be availble for some time now. Watch for current quotes to change in the near future.
|
