Chasing forage seed markets is like scampering after a butterfly.
You never know where it will go next.
Markets are variable and this year’s boom crop could be next year’s bust, says Gord Pearse, production and research co-ordinator of Newfield Seeds at Nipawin, Sask.
Intermediate wheat grass is the current market darling.
“This is worth a small fortune today, but by the time it is seeded next spring it will be below where it should be,” he said.
“Today it is worth more than $3 a pound and a typical yield is 300-400 pounds an acre. So do your math.”
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Next year, the price could be one one-fifth of that. Such unpredictable swings require commitment from producers.
“The critical thing about forage seed production is, once you are in it, stay in it,” Pearse said.
Because it is so hard to predict when the boom years will come, producers have to already be in the business to take advantage of them.
Over time the industry is profitable and it will grow as it becomes too expensive to produce forage seed in other parts of the world, Pearse said.
He spoke to about 200 producers at a range and forage seminar sponsored by the Saskatchewan Stock Growers Association last week.
He said a large portion of the grass and legume forage seed produced in western Canada is exported. The United States is the largest market, especially for forage legumes and dryland grasses.
Europe follows. It buys only pedigreed seed and wants fescue grasses, legumes and timothy.
The market is variable because production is fairly small and expansion of production by a fairly small acreage can create an oversupply. Weather also plays a big role.
When the Mississippi River flooded in the early 1990s, the U.S. acreage of smooth brome grass was wiped out and prices soared.
The U.S. Conservation Reserve Program has created an ongoing market for grass seed and prolonged economic growth in North America spurred demand for grass seed on new golf courses and housing divisions.
Although a longer view is needed to be a forage seed producer, Pearse predicted meadow brome grass, timothy and native grasses will be strong performers in the coming year.
Production of meadow brome was poor in northeastern Saskatchewan because of frost last June, and yields in the Peace River area were down because of drought.
As with all dryland grasses, it is important to seed meadow brome in quackgrass-free fields and to control annual weeds such as wild oats.
“Quality is everything when it comes to seed production,” Pearse said.
Native grasses are often produced under contract. They fetch a good price because they are difficult to grow, he said.
In the long term, western Canada will become a more important seed supplier as production in other places gets too expensive.
“Land values in Europe are outrageous so they have to grow high value crops such as potatoes,” Pearse said.
Farmers in Europe who do grow forage seed get half their income from subsidies, he added.
Gradually, production will have to shift to areas where is it cheaper to produce.
