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Seed Webinar: The 2021 Seed Harvest, Prices, and What To Expect This Year

In this special webinar edition of Around the Turf Scene, Rusty explains the market dynamics that affect grass prices, including demand, acreage, pest pressure, and seed yield, and provides a clear picture of what your expectations should be for pricing and availability as it pertains to this year’s crop.

About Our Host:
Rusty Stachlewitz is a Seed Product Manager at Advanced Turf Solutions. Rusty received his Bachelor of Science in Crop and Soil Science from Michigan State University with an emphasis in Turfgrass Management. He has been a Golf Course Superintendent and General Manager in the industry. He’s also been the turfgrass department head of two colleges and the Program Director of The Lawn Institute.

All right. Well, you’ve probably read who I am. I’m not going to do a long introduction. The important part is that I’m the seed product manager for Advanced Turf Solutions. I’m going to talk to you today about our seed harvest. A little reminder, if you haven’t been in this platform before, off to your right-hand side is a little control panel. You can open and close it with that orange arrow, and you allow yourself to mute, change your audio selections, all that kind of stuff. You’re going to be in listen-only mode. If you’ve got questions, there’s a question bar there. If you’ve got a technical question then Jessica’s on here. She will answer those as they pop up. And if you’ve got a question about grass seed for me, I will get to those at the end, because I’m going to go through my slides here and don’t want to lose track. I’m sure I’ll lose track anyways.

So, without further ado, let’s talk about 2021 harvest, prices, and what to expect. So I’m going to go through a little background stuff to start with. If you ever see me give a presentation, I like you to have a little background so you know what’s going on. I’m not going to jump right into where the prices are going to be. I need you to understand why the prices are where they’re at and what we can learn from that.

So things you need to know: I think most of you know this, but you got to think about this in realistic terms. Seed is only harvested once a year in each hemisphere. So in the Northern Hemisphere, where we live, seed is only harvested basically right now for the next few weeks. And then that’s all we have for the whole year. There’s not a second crop. There’s not more. There’s a potential you could get some from the Southern Hemisphere, but other than that, once we have used the seed, it’s gone. Most of the world’s grass seed is grown in a very small area, and I’ll show you a map in a second. But it’s astounding that that area can contain all or most of the grass seed for the world.

The demand for grass seed has been insane. COVID was really, really good for grass seed sales. We were all really frightened with people losing their jobs and things like that, but it didn’t seem to be an issue. This picture is actually from Wine Folly. This is showing you where all the vineyards are in Oregon, but that orange area — that’s where most of the grass seed fields are, also. And evidently, wine people are way better than grass seed people at making maps. The grass seed maps were not nearly this good. Also, if you look at this Columbia Valley (and it goes north up into Washington as well) there’s grass seed grown in that area. There is some grass seed grown over by the Idaho border as well. And I don’t have the exact figures, but the state of Oregon grows over 95% of the world’s grass seed, or at least North America’s. And this little orange area is a huge, huge chunk of that. Remember that as we’re making our way through these slides, that all this seed — or 90% of this seed — is coming from that area. There’s some seed grown in Minnesota now. There’s some seed grown in Canada. But the area we’re going to talk about the most is where most of it comes from.

The other important thing to understand is how grass seed is grown. It’s a perennial crop. They’ll grow it from three to five years. And it gets put in the ground just like you see on the left-hand side of that slide there and grows up in rows. But by the time it’s mature, especially in the second, third, fourth year, it’s just a solid field pretty much from the outset. So look at that field. On the left, you can see where there’s potential for weed encroachment, things like that. They’ll spray for weeds. They’ll spray pre-emergent. They will go out and hand rogue fields to try and keep them clean, do all kinds of things. But as you can see on the opposite slide with the dried-off seedheads, it’s very dense. So getting through that, if there’s something growing below that that’s able to survive, it’s going to be there. You’ve got to remember that as well. Another thing is how seed is harvested. So this time of year, the seed starts to dry down. The seed is formed in the heads. And that picture on the left is a swathing machine. So basically they go through, they knock down the plants. They do this before they get too dry. If they’re too dry, the seed will all fall off. So they knock down the plants in this swathing technique. And then they let them lay there for seven to ten days, usually. Then they come through with a combine, like you see on the right, and they pick up all those stalks with the seed included, and the stalks gets separated out from the seed heads and the seed, and the seed gets taken off for further cleaning. But take an image of that right picture. You can see that combine head coming down close to the ground. You can see there’s green grass around it. So you know, it’s just like when a lawn goes to seed. You’ll get a seed stalk, but that plant’s still alive underneath there. And there’s most likely other plants there as well.

The other thing to realize is that you’ve got tens of acres, hundreds of acres, potentially, in a field. And not all the grass is going to mature at the same rate. And so these are actually samples taken out of the same field at the same time. And you can see how some things are dried down. Others don’t appear to be even fully developed yet. In the far right, some of that seed — you can actually see on the very far right there, there’s one that’s fallen off and it’s getting too brittle — that would be hard to harvest in most cases. So knowing how seed’s grown — not knowing, but seeing how seed’s grown — how it’s harvested, gives you a little background.

So what I want to talk about real quick is what impacts our seed supply and how that is going to affect our pricing for this fall. So grass seed production acres are a big thing. You can see those numbers up there. In 2005, there were just over a half million acres. In 2019, there were just over 400,000 acres. Pounds of harvested seed weren’t that far off. But ’05 wasn’t a great year and ’19 was a great year. So on those roughly 400,000 acres, a bad year might look like 600 million pounds or less of seed. And I think that’s what we’re going to run into this year. So the reason why the acreage is decreasing is there are other higher-priced products that grow really well in this area. And that’s one of the reasons why I put that wine map up as well. There’s vineyards all through that area. There are hazelnut farms. There are hemp farms. Hazelnuts and grapes for wine in the vineyards are really long crops. You know, I said three to five years for grass seed. You’re looking at tree production and vine production for those other two crops. They might be there for twenty years or more. And so it locks up that acreage. And it makes it harder to get.

Weather, obviously, has a big impact on everything we do. Moisture and temperature play a big role in how much a field is going to yield, how much seed we can get off of it. Out in Oregon in that Willamette Valley, where the grass seed is grown, there was an extended drought for much of the year. Then they had really hot temperatures, right when those seeds were supposed to be fertilized. You know, if you have a drought and you can’t irrigate, plants just don’t develop properly. And so they don’t develop to their full potential. They’re just trying to stay alive. Those high temps also can negatively affect the viability of the seed. So we’re expecting not as much seed to be of good quality and germinate. So our germination percentages may be down. Just to give you a concept, this is Portland. This was the last week of June, I believe, and 108 degrees, 112 degrees, 116 degrees. 118, I believe, was the high temp slightly south of Portland in the Salem area. And so you can imagine how much cool-season grasses are shutting down at 116 degrees. Going to the drought, here’s the drought map. That area where we’re growing that grass is right down that river valley. And so you can see, first of June they were in severe drought in that area.

To make matters worse, this winter there was an ice storm. The ice storm in February actually cut out power for some people for up to eleven or twelve days. And there were states of emergency for up to a month in some of the counties in Oregon because of the ice storm. It didn’t impact the crop hugely, but it did impact production. It did impact putting seed into bags during that time frame. It did impact these people’s lives. One more thing that kind of goes in with weather is that last September there were all kinds of wildfires. And the wildfires did affect some of the crop, did affect some of the fields, burnt down several structures. Some of those contained grass seed that was already harvested. But this picture was taken at the Pratum Co-op at 11:30am. And so that haze is from all the smoke. You can see on that palette, all the soot sitting on there. It really affected things. Some of the seed companies were shut down for extended periods of time, right in one of their busiest times of the year in September when they’re trying to clean and bag and get things out. And they were more worried about their employees’ homes that were in danger from the wildfires. And also, just air quality was a problem. There was so much smoke in the air that they couldn’t have people working. It was just too dangerous.

I’ll go over this really quick, so you have an understanding. Obviously, you’re growing plants, there’s going to be pests. Weeds are very adaptable. So the droughts, ice — they make it through all that. Some of them actually perform better in those scenarios. That ties in with you’ve got these high-temperature conditions, these drought conditions. Farmers are expecting low yields in their fields, which makes them move their combine head closer to the ground so they can get as much seed as possible without dropping it. What that also does is if you got any Poa annua growing down in there, you have a higher likelihood of picking that up as well. Because that’s going to sit there right in the area where that combine’s picking up. So we may see some slightly more dirty grass seed with some weed problems and things like that, because we’re just combining at a higher speed, lower head on that combine.

With a ton of diseases, I didn’t get any reports this year that any of the diseases were a huge issue. I’m sure everybody fights something at some point, but not much of note. But of note, things you don’t think about is rodents. Voles, in particular, and mice wreak havoc, and some of you’ve probably seen vole damage after the winter on grass. That’s what those pictures are of off to the side there. But the voles will actually climb up the existing plant in the summertime and clip off the seed head, get it to the ground, and eat the seed. I couldn’t find any pictures of it, but I was told by two farmers out there that they actually stack up the seed heads like cordwood. They’re very neat and tidy about it while they’re devastating the field. And here’s an overhead view of that damage if you’ve got a lot of voles. Oregon’s a very socially and environmentally liberal state, and so their chemical regulations are very stringent. This same area is used for migratory Canada geese. And the Canada geese eat the bait for the voles that we use to kill them. So there’s a window where those voles can’t be poisoned, to protect the Canada geese. And so that’s what happens is the populations get out of control while you can’t bait for them and you see this devastation right here.

Insects also, way more insects than I’ve got listed on here, and they can all be problems year to year with growing grass seed. Didn’t have any huge problems this year that I was made aware of, but can be and some of those you’ll recognize that cause problems for us throughout the Midwest as well. Not quite insects: slugs. Slugs cause a ton of problems. And you will get slugs out in these fields and they will completely devastate a crop. And it’s just amazing. It’s something that, you know, most of us here don’t have to worry about. But in that valley where this grass is being grown, it’s very temperate. That’s why it’s been selected. Typically not real high temperatures, typically not real low temperatures, typically very moist. And these slugs like that, especially in the dense canopy of these seed fields. So you can get these slugs just going in and eating lots of different species of grass. They don’t seem to care.

The other thing we’ve got going on that is affecting your grass seed supply is consolidation. So we’ve got smaller companies getting bought by bigger companies. We got big companies buying each other or combining. Both of these removed partners for trade. So there’s a lot of trade back and forth between companies out in that valley with different types of grass seed. As those trading partners go away, then you’ve got to be more self-sufficient as a grass seed marketing company and have your own. The other thing that happened is some seed gets pulled from one sector to another. And what happened was Scotts has bought up a couple of smaller guys. And they’ve moved that seed from the professional market, which would be lawn care, golf course, sports turf, sod. They’ve taken that seed and moved it into the consumer market. And that’s repackaging for, you know, big-box stores and garden centers and things like that. So a lot of seeds that would have been traded within different companies out there got pulled when those moves were made. And so that’s another thing that has affected our total pile, I would call it, of grass seed that we can buy from and sell out of. The other big thing is demand. And I mentioned in the beginning, but COVID was really good for grass seed sales. So big-box stores had record grass seed sales. If you run a lawn maintenance company, then you know what happened for your sales in most areas. I don’t know what it was, but I think people sitting at home through the lockdowns, having coffee with their significant other, and seeing the dandelions in the spring of 2020 really affected them. They wanted to get them taken care of and didn’t want to do it themselves, in most cases calling somebody else. But if they didn’t, they went to a big-box store, bought some herbicide, and then bought some grass seed. And so a lot of our grass seed ended up getting diverted into that market. Because obviously they can make a bigger profit. And that’s what they did.

Golf: COVID was great for golf. So we’ve got golf courses with more money that are looking at doing renovations. We actually have golf course construction going on now. That hasn’t happened for years, and that’s pulling away from our pile of seed we can sell. Sports turf: initially, COVID was bad for sports turf. Now that we’re back out again, everybody is out playing soccer, playing baseball, playing softball, and our seed sales are back up on the sports turf end as well. So that demand is huge.

Because of that high demand, a lot of companies had minimal carryover. So typically, from one year’s crop to the next, they’ve got a target for carryover. I don’t know what it is for everybody. Let’s just say 20%. 20% seems to be a normal number. So they will take 20% of the crop from a given year and hold that for the next year. That way, they know they’ve got some to start out with if there’s problems with harvest or cleaning. And it gives them a little cushion. Because sales were so good, companies have minimal carryover for the most part. And so they’re dependent upon this year’s crop. And that puts everybody in a stressful situation because this year’s crop, as you’ll see, has not been great.

So we’ll move on to the meat, what you came here for. It only took me twenty-some minutes. This year’s harvest on tall fescue is likely down 20 to 30%. High-end bluegrasses are probably around 10%, maybe a little higher. Common bluegrasses could be off as much as 50% of the expected yield. These are all yield numbers. Perennial ryegrass is going to be down 20 to 30%. We don’t know exact numbers yet. Seed is just coming in from the fields, will start being cleaned, and it’s being sent off for testing. So we’ll know germination percentages and cleanliness and things like that really soon. But this is what our initial numbers look like. The reason why the high-end bluegrass is down 10% and common bluegrass is down as much as 50% is the high-end bluegrass almost exclusively is grown under irrigation. So it’s been getting watered through that whole drought period. The common bluegrasses, they don’t command a high enough price to put them on land that’s irrigated, so they’re on dry land. And when it’s droughty and hot, dryland crops aren’t going to do as well. So we are looking at a big nick out of the expected yield for those three grasses that are the crux of what we do in cool-season areas.

So as we look at pricing, we’re expecting tall fescue pricing to be up 30 to 45%. I know that’s a big range, but we really don’t know until tests come back. The prices for tall fescue and perennial ryegrass that are paid to the farmers are negotiated by a group called OGSBA in the state of Oregon. And both those prices for tall fescue and perennial ryegrass have been adjusted since the initial establishment because the farmers are getting lower yields than expected. And the concept is that there’s a fixed cost for them to grow that grass seed. They need to recoup that cost plus a profit to keep growing grass seed. So we’re looking at 30 to 45% off for tall fescue. Kentucky bluegrass is 15 to 20%, maybe more. It just depends. And some of those common types are going to be a little higher or a lot higher than that, depending upon their yields.

Perennial ryegrass is the one to pay attention to, likely going to be up around 50%. So you’ve got to make some choices on your end. Lots of times we’ve put perennial ryegrass into different mixtures because it was cheap. And it germinates quick and it gave homeowners and sports fields something to see that they could play on right away or walk on soon. But I think with these prices, people are going to have to start making some different choices. Fine fescue I haven’t talked about a lot because it’s a very small volume crop. However, price for that’s going to be up 20 to 30%. Yields for those are going to be down. I don’t have any initial numbers on those, but everybody’s just telling me they’re going to be down. I didn’t put it on here, but if you’re a golf person watching this, bentgrass prices are going to go up. Bentgrass yields are also down. So we’re looking at higher prices on bentgrasses as well. So you’ve got to take all that into consideration. So if I’m looking into a crystal ball, what am I going to tell you? Seed’s going to be expensive. I don’t want to be just, you know, bearer of bad news, but it’s reality. The costs are going to be up. Seed volume is going to be limited. So, you know, if we’re looking at 20 and 30% lower yields, there’s just going to be less seed available.

You can expect (I think — this is all me, so I can point that out. All this data, all the percentages, this is just me guessing, at this point. Very educated guesses, I think. I talk to a lot of people, but still a guess.) I’m expecting seed to contain higher amounts of weed seed and other crop seed, for a couple reasons. One of them was the combine issue I told you about with picking up more Poa. The other issue is that especially bluegrass is small-seeded. When it’s hot and dry, those seeds tend to be even smaller. Those seeds tend to be closer to the size of a Poa annua seed. And it makes it difficult to separate those in the cleaning process. So I would expect, especially in bluegrass, to see potentially more Poa annua seeds in those lots. Typically, a lot of the high-end companies like ourselves don’t take lots with Poa annua. We’re going to have to make decisions this year based upon how the tests come back and see what we can do. But we’ll notify any of our customers if that’s the case.

Seed is going to contain higher amounts of inert matter. You’re going to have a lot of empty seeds, in my estimation. And so your inert matter percentage is going to be up there. So if you’ve ever had to do the pure live seed calculations, then you know, potentially, our pure live seed percentage is going to go down. However, remember, drought, heat makes the seed smaller. So smaller seeds, more seeds per pound. So another thing to talk about, we’ll probably get into that this fall, actually doing some seed counts to give a better idea to the customers as to what they’re getting. You know, we might have way more seeds per pound. So some of this cost inflation can be offset by being able to put down less seed, if that is actually the case.

The other thing you’re going to see is you’re going to see more companies selling coated seed. With the limited supply, they’re just going to be forced to. We’ve been doing it for twelve years and we have our own coating now, as well as selling stuff with Yellow Jacket on it. And so, you know, we’re well-positioned for that. A lot of our customers are well-positioned for that, but that’s something you should consider. The one caveat to that is, if you’re going to be slit seeding, not every slit seeder plays nice with coated seeds. So don’t go whole-hog and buy a truckload or several pallets of coated seed until you make sure that your equipment’s compatible with coated seed. And your sales guys can help with that. We’ve identified a few that don’t work as well. The other thing, if you’re going to use coated seed, make sure you clean your hoppers out daily. The coated seed can actually suck in moisture from the atmosphere overnight when the temperatures change, and it can gum up the works in the seeder. So just make sure you do that. You really have to do that if you have raw seed as well, for the same reason. Raw seed’s very dry and it can suck in atmospheric moisture as well.

So why I’m telling you all this, what you need to do is you need to plan ahead. Harvest is happening right now. There is some seed available from last year. Prices on that are climbing quickly. But make sure you’re talking with your sales reps to make sure that they have seed available, find out when new seed will be available, and start to plan for that. If you’re on the lawn care side and you’ve got, you know, aerification and seeding built into programs, your expense is just going to be higher. Coated seed is cheaper. So coated seed would allow you an opportunity to get closer to the price points that you projected when you sent out those programs and you charge customers or had them sign up for a contract. So, you know, that’s very important to look at, you know, other options, and that’s just considering different grass types as well. Like I said, historically, we used a lot of perennial ryegrass because it was cheap. It came up fast. Everybody was super stoked. You put it out in September, lawn looks green and lush. It’s great. But if our cost is going to be 50% higher or more, then there may be better options. You may be better off waiting for bluegrass to germinate. It might be cheaper per thousand square foot. You might be better off looking at some of these new turf type tall fescue varieties that come up quickly, that could blend into most home lawns. You just need to consider all those things once you know where pricing’s at and get some different options. You need to, like I said, consider coated grasses and look at those if you haven’t already.

I’m at the end. The concept of this is a quick little deal over lunch, so we’ll see. Hopefully, that was good. I’m looking through the questions here. I don’t have any, but if you’ve got any questions, type them in. I’ll get them.

We should have pricing within the next couple of weeks. And we can get that out to everybody. You’ll know what’s going on. Some competition has already brought out pricing. But everything keeps changing. So I think they’re going to adjust that, most people, and then they’ll probably adjust throughout the year. There’s other things in play I didn’t put into the presentation. There’s a lot of grass seed grown in Europe. That grass seed typically doesn’t hit our market until spring. And so there is a potential that we could see some, if they have a good crop in Europe. We could see a price change on, predominantly, ryegrass in the spring. But it won’t happen this fall. Once we get pricing and set pricing for the fall, that’s what it’s going to be. Once we get closer to spring, like I said, there may be a downward shift in pricing. And it also depends on demand. If the consumer demand drops off, people are able to travel again like they are and they’re not doing as much work with their home lawns and things like that, then we may see more seed available to us.

So I’m looking through. I think I got everything here. It’s my first time using this platform. So I think we got everything. I want to thank you for joining us today. I’m going to do one of these again next Thursday, same time. We’re going to talk about some of those things I mentioned today, looking at different grass types and how that would affect expectations for you, expectations for your customers, and pricing in general. And we can go through that. I’ll also talk about coating, how those pricing changes can affect you as well. And I’ll talk about some of the seeders that work well or don’t work well with the coated seed. But that’s all I have for today. Thank you very much. Enjoy the rest of your day.