Large carryover of grass seed in storage for most varieties

By MITCH LIES

Capital Press

ALBANY, Ore. -- If Oregon growers don't plant another acre of grass seed, dealers will have enough seed to meet demand for the next 14 to 20 months.

That was the sobering outlook for grass seed unveiled recently by seed industry executive Matt Herb.

Herb is director of research at Oregro Seeds in Albany and president of three Oregon seed trade associations. According to figures he compiled with help from Oregon State University and commodity commission reports, the industry is as extended as any time in recent memory.

Given existing crop carryover and low usage, Herb calculates the industry already has on hand a 14-month supply of annual ryegrass seed, an 18-month supply of perennial ryegrass seed and a 20-month supply of tall fescue.

In the case of perennial ryegrass, half the 2009-10 needs -- 88 million pounds -- will still be in the barn come July 1 of next year -- before a single acre is harvested. In the case of tall fescue, nearly 70 percent of the 2009-10 usage of 198 million pounds -- 138 million pounds -- will be in storage July 1, 2010. In the case of annual ryegrass, Herb's figures show a July 1 carryover of 38 million pounds. He estimated annual ryegrass usage at 228 million pounds in 2009-10.

"It's no secret we're in dire straits," Herb said at a seminar called by industry leaders to address the situation.

Herb said the current rough patch for grass seed growers is unique in that it includes a nearly unprecedented drop in demand.

In 2000, Agribiotech defaulted on more than 600 grass seed contracts when it declared bankruptcy, according to Chapter 11 filings. But seed eventually moved out of the chain.

"(The) ABT (bankruptcy) took a while to work through," Herb said. "But we did not have a drop in demand."

Today, with housing starts down, livestock production down and usage on golf courses down, movement of seed is in question.

Herb's figures show annual ryegrass seed movement in 2008-09 down from a five-year average of 253 million pounds to 228 million. Perennial ryegrass movement dropped from a five-year average of 213 million pounds to 146 million in 2008-09.

Given the reality of today's market, Herb said, growers should consider pulling out marginal stands and base crop decisions on a "least-loss scenario."

"I would pull out the stands that are least economically viable to keep," he said. "So if a field has a purity issue, that's the first place I would go. If a field has yields that have gone down, I would go there.

"Losing $50 an acre with wheat is better than losing $300 an acre with tall fescue," he said.

Staff writer Mitch Lies is based in Salem. E-mail: mlies@capitalpress.com.