Grass and Legume Seed Market Update - July 16, 2009

Table 1: Price Quotes

Grass and Legume Seed Quotes (Alberta/BC Peace)
	Creeping Red Fescue	Boreal C R Fescue	Smooth Brome grass	Carlton Smooth Brome grass	Meadow Brome grass	Fleet Meadow Brome grass	Timothy	Climax Timothy	Alfalfa	Red Clover	Alsike Clover	Sweet Clover
	Common #1 - Min 97% Pure, 85% Germ	Cert #1	Common #1	Cert #1	Common #1	Cert #1	Common #1	Cert #1	Common #1	Common #1	Common #1	Common #1
Feb 5-08	50	60	130-140	140-150	160-170	190	35+	55-60	120-130	85-100	35	25-30
July 8-08	62-65	65-70	100-120	110-120	150-160	170-190	50	60-65	100-125	85-100	35-45	30
Sept 29-08	65	80	55-60	65-70	165-170	170-190	50	65-70	120-140	100-110	50-60	40-50
Jan 5-09	60-62	65-75	45-60	60-70	160-170	170-190	40-50	50-65	120-150	110-125	40-50	35-50
July 7 -09	40-45	50-55	40-50	50-60	150-160	160-170	40	45-55	100-125	80-100	35-40	35-40
Prices are quotes only, until actual orders come in, that's when firm pricing is established
- prices in ¢/lb

Last updated: July 7,09
Note: due to the lack of buying activity, price quotes above are either last solid quotes reported by buyers or have been adjusted for a lack of movement.

Turf Grass Seeds
The Canadian turf grass production is now centered on the creeping red fescue crop in the Alberta/British Columbia Peace River region and in Manitoba and Saskatchewan, where acres of perennial ryegrass had increased dramatically the past 5 years.

In 2008, the Peace region’s creeping red fescue crop was greatly affected by drought, with the BC Peace hit the hardest. However, thanks to late spring snowfall, the overall creeping red fescue crop managed to average just slightly less than average. However, acres were down, and new seedlings fields did not establish. Prices for “creeper” got as high as 70¢ a lb last summer, but have now been pressured down to the low to mid 40’s. The lack of new buying has resulted in full warehouses and many growers considering storage.

Canadian trade data shows that total Canadian grass and legume seed exports to be down 20.9% for the period July 2008 to March 2009. Broken out, turf grass seed exports are down 24.3% from the same period last year. Of the major turf grass seed crops grown in Canada, creeping red fescue exports are down over 26 % (down over 7.5 million lbs), while perennial ryegrass seed exports are down 23.8% (July to March), or close to 7 million lbs. Although the last quarter crop year trade data won’t be released for another couple months, processors have reported continued slow seed movement this spring and early summer.

Canadian Turf Grass Seed Exports (Kgs) - July to March
Note: 2007 = July 06 to Mar 07	2007	2008	2009	09 vs 08
creeping red fescue, o/t cert	15,320,879	12,721,205	9,319,852	73.3%
creeping red fescue, cert	1,468,689	3,568,059	3,171,616	88.9%
rye grass, perennial	11,540,816	13,158,669	10,020,955	76.2%
rye grass, annual	2,623,574	1,097,557	1,011,727	92.2%
tall fescue	1,361,460	1,543,247	715,631	46.4%
Kentucky blue grass	415,349	499,755	423,358	84.7%
fescue nes	396,698	222,993	372,518	167.1%
bent grass	38,329	1,815	17,554	967.2%
Total Turf Grass Seed Exports	33,165,794	32,813,300	25,053,211	76.4%
World Trade Atlas, nes = not elsewhere specified

Canadian certified grass and legume seed acres fell 5% in 2008, with certified perennial ryegrass acres down 17% (down 5000 acres to 25,000). Good quotes for certified creeping red fescue in 2006/07 resulted in many fields being applied for certification again, with certified “creeper” acres up 14% (to 23,000 acres) in 2008.

In the United States, the Oregon 2008 crop was down across the board, as fewer acres took its’ toll. Total Oregon grass seed acres were down by 26,000 acres (to 489,660), with perennial ryegrass acres down over 40,000 acres. However, tall fescue acres in the Valley were up 13,000. Overall Oregon production showed the perennial ryegrass crop at 175 million lbs, down from the previous year’s total of 241 million lbs. Other Oregon grass seed crops of note were: annual ryegrass (2008 = 216 million lbs, down 22 million from 07’), tall fescue (2008 = 262 million lbs, up 17 million from 07’), and red fescue (virtually unchanged, 2008 and 2007 production around 7.5 million lbs).

The 2008 tall fescue crop out of the mid-west (Missouri/Kansas) is estimated to be around 90 million lbs, a vast improvement over the 2007 crop, which came in around 60 to 65 million lbs)

When one looks at the USA grass and legume seed data for the same July 08 to Mar 09 figures, USA exports are only down 1%. Exports of Bermuda grass, bluegrass, some clovers, meadow fescue, perennial ryegrass and wheatgrass seed were up substantially. But when one considers that the USA typically consumes much of her production, and when one looks at seed movement out of Oregon to the various parts of the USA, domestic seed trade was down. For the first two quarters of 2008/09 (July to Dec), data shows grass seed movement out of Oregon down over 20%, with perennial ryegrass movement down 32%, and annual ryegrass movement down 13%. “It if ain’t movin’, it ain’t gonna.

Container truck waiting to be loaded

In Europe, total EU grass and legume seed acres down 13.5% from 2007. The EU reported 492,000 acres, down from the 2007 acreage figure of 568,000 acres. However, since year 2000, EU acres have averaged 463,000 acres (EU 27). Denmark continues to dominate the European production picture with 170,000 acres. Following Denmark in acreages are: Germany (69,000 acres), France (42,000 acres), and Holland (38,000). Sweden, Finland and Poland reported 22,000. 21,000 and 18,000 acres respectively. However, most EU countries showed a drop in acres from 2007 to 2008. Danish and Polish acres fell by 15,000, while German, French and Dutch acres fell by 9 to 10,000 acres

Total EU production was down by 113 million lbs from 2007 (2008 = 447 million lbs), but is equal to the 9 year average of 446 million lbs annually. Only Denmark produced over 100 million lbs of seed. No other EU country grew over 45 million lbs. (Note: EU production data is not broken out by species)

In Denmark, which dominates EU Grass/Legume seed production, total Danish grass seed acres down 15,000 from 2007, down to 169,500 acres, while total acres of legumes seed was down slightly from 2007 to 2008 (down 750 acres to 11,160). Perennial ryegrass acres remains the dominant grass species grown in Denmark (73,000 ac), while creeping red fescue is 2nd with 41,000 acres. These two crops comprise 67% of all Danish grass seed acres.

Danish legume seed production rose substantially in 2008 (total production up 2.1 million lbs, or up 90% from 2007). Both white clover yields and red clover yields well above the 9 year yield average. White clover average yield (2000 – 2008) @ 367 lbs/ac, 2008 = 396 lbs/ac. Red clover average yield @ 227 lbs/ac, while their 2008 average red clover yield was 284 lbs/ac. The overall production for red clover in 2008 was 369,000 lbs, (up almost 200% from 2007), while the overall production for white clover was 3.824 million lbs (up 87 % from 2007)

Although total 2008 Danish grass seed acres were down 8% from 2007, total production was up 6%. (Total grass seed production 2008 = 176 million lbs, 2008 = 166 million lbs, 9 year average grass seed production = 192 million lbs). Perennial ryegrass production was up 4 million lbs from 2007 despite fewer acres (72.9 million lb crop). However, this is over 8 million lbs less then their 9 year average annual production. Creeping red fescue production was up 4 million lbs from 2007 despite 11,000 less acres in 2008. 2008 yields averaged 1330 lbs/acres, up over 250 lbs/ac over the 9 year average. Total 2008 production was 55 million lbs. However, despite this very good production, average annual Danish creeping red fescue production (2000 to 2008) has averaged over 62.5 million lbs.

EU grass seed harvest

Forage Grass Seeds
Like their turf grass seed counterparts, Canadian forage grass seed movement has also hit the dumps, but to a lesser extent. Led primarily by timothy seed, which moved 3.35 million less lbs of seed (July 08 to Mar 09), total Canadian forage grass seed exports fell by over 38% compared to the same period last year. Except for wild rye and orchard grass seed, all other forage grass seed exports fell. Price quotes for most all these grass seed crops, with the exception of meadow brome grass, also fell, as lack of demand/movement entered the marketplace. However, processors have reported fair to good retail movement of seed this past spring, which may help ease the burden of a lack of exports.

Canadian Forage Grass Seed Exports (Kgs) - July to March
Note: 2007 = July 06 to Mar 07	2007	2008	2009	09 vs 08
Timothy grass, cert	2,954,379	2,738,738	1,369,777	50.0%
Timothy grass, o/t cert	1,457,635	229,550	78,933	34.4%
Wheatgrass, crested	475,004	700,662	402,934	57.5%
Wheatgrass, nes	914,494	586,642	197,702	33.7%
Brome grass, meadow	280,026	253,915	152,036	59.9%
Brome grass, smooth	166,913	207,766	197,236	94.9%
Meadow fescue	193,429	291,853	217,151	74.4%
Wild rye	109,921	189,027	610,752	323.1%
Brome grass, nes	29,359	40,439	29,414	72.7%
Orchard grass	22,989	4,135	6,798	164.4%
Total Forage Grass Seed Exports	6,604,149	5,242,727	3,262,733	62.2%
World Trade Atlas, nes = not elsewhere specified

Forage Legume Seeds
Legumes, which act as a valuable forage protein source, while adding nitrogen to the soil, did not feel the downfall in movement as much as the turf grass seed and forage grass seed sectors. With astronomical prices for both nitrogen and phosphorus fertilizers worldwide, the demand for legume seed did not wane as much as the grass seed complex. Overall Canadian legume seed exports are only down marginally (3.8%).

Alberta’s alfalfa seed crop recorded above average yields in 2009, while the crops in Manitoba and Saskatchewan went through various weather conditions, with some area’s seed crops going unharvested. Alfalfa prices remained in the $1.00 to $1.50 range, with some variety not stated (VNS) species commanding good premiums. (Depending upon the original variety grown). A lack of production is holding red clover seed exports down, as insect problems persist. Price quotes for the legumes remained good for most of the year, with red clover quotes exceeding $1.00/lb for much of 2009.

Canadian Legume Seed Exports (Kgs) - July to March
Note: 2007 = July 06 to Mar 07	2007	2008	2009	09 vs 08
Lucerne (alfalfa), o/t cert	7,402,872	4,990,261	5,336,057	106.9%
Lucerne (alfalfa), cert	5,528,866	4,183,007	4,061,624	97.1%
Red clover, double cut	609,031	568,909	517,382	90.9%
Red clover, nes	1,605,146	1,501,178	1,120,289	74.6%
Bird's-foot trefoil	495,637	521,111	567,940	109.0%
Sweet clover	433,334	354,145	429,431	121.3%
Alsike clover	947,501	1,061,198	647,454	61.0%
white clover	55,847	66,835	82,970	124.1%
clover nes	61,519	76,514	56,793	74.2%
Total Legume Seed Exports	17,139,753	13,323,158	12,819,940	96.2%
World Trade Atlas, nes = not elsewhere specified

Summary
The world economy has given the grass and legume seed industry a major market signal, and that is, “wait”. Until this recession turns around, expect slow seed movement, especially on the turf grass seed end of things. Market signals have told growers, and processors, to store their seed for now. How long, is anyone’s guess at this point. With cereal and oilseed commodity prices already taking acres from grass/legume seed, it will be interesting to see which growers come back into seed production when this sector turns around.

Prepared by David Wong, Alberta Agriculture and Rural Development, Ag-Info Centre