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Grass seed, nursery industries revive

Published on May 11, 2012 3:01AM

Last changed on June 8, 2012 8:10AM

Rik Dalvit/For the Capital Press

Rik Dalvit/For the Capital Press

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Grass seed growers and nurserymen in Oregon's Willamette Valley were hit hard when the housing industry hit the skids, and they have had a tough go the last three years or so.

There are signs that seed inventories that had been piling up in barns around the valley are starting to move, as are nursery stocks. Our sources attribute recent movement to an improving economy and good weather in the East. That's good news.

The bad news is that there are fewer nurseries left to enjoy the tentative uptick, the grass seed industry is much smaller than it was at its peak, and profits are smaller.

The downturn in both industries had its genesis in the collapse of the commercial and residential real estate market. When houses and office parks are built and bought, lawns and landscaping are planted. When they aren't, demand for foliage quickly drops.

According to USDA data, nursery sales dropped from $988 million in 2007 to $676 million in 2010, as the housing bubble burst. The industry bottomed out in 2011 at $662 million in sales, according to Oregon State University data.

Grass seed sales, meanwhile, plummeted from around $468 million in 2008 to around $228 million in 2010, according to the OSU Extension Service. Barns were stuffed with seed when the recession hit in September 2008. They were not cleared out until this spring.

Even with the strong spring movement, nursery and grass seed growers say margins aren't what they once were. Growers, anxious to move nursery product, are willing to take lower prices. Insiders say if the economy doesn't get worse it could be another year or two before either industry really turns around.

The industries that do emerge from the abyss will be smaller, and more diverse.

In 2008, 4,323 licensed nurseries operated in Oregon, according to the Oregon Department of Agriculture. Today there are 3,872 as hundreds of smaller operations, and several large ones, have either gone out of business or moved on to some other crop. Many nurseries have survived by finding niche markets. The industry has shed thousands of employees.

Acreage in grass seed also dropped, from 528,000 acres in 2005 to 373,000 acres last year, as growers have switched to wheat and other crops. Many say they'll keep a diverse variety of crops even if the grass seed market comes back.

That's probably the lesson that can be gleaned from the last few years. Growers who don't get caught with all their eggs in one basket, and who are flexible enough to move where there's opportunity are the ones who survive the downturns.

Everyone knows that. It's just a lot easier to see from the bottom of any given market than from the top.


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