2021 Vegetative, Seed Market Update

2021 Vegetative and
Seed Market Update

Adam Russell, Director of Product Development, Mountain View Seeds

This last year has been one of upheaval for our industry, yet incredibly, most of us were able to overcome while fighting through the pandemic – in many cases profiting from it. That’s a huge credit to your resiliency as sod producers. In 2021, there are important factors affecting both the vegetative and seed markets that will have an impact on our entire industry this year. We hope this will help guide you in making decisions going forward.

  • Cool-season grass seed supply will be very short through Fall 2021 and into Spring 2022. This is due to multiple factors, including the repeat of strong pandemic demand at retail stores, less-than-ideal crop harvests in Oregon for Tall  Fescue & Perennial Ryegrass the last 2 years, and the consolidation of seed companies in Oregon.
  • Within the past 6 months, The Royal Barenbrug Group purchased Jacklin Seed, Scott’s Miracle-Gro entered into agreement to purchase the turf division of Columbia Seeds, and Pratum Co-Op (parent company of Mountain View Seeds & MVP Genetics) entered into agreement to purchase the turf division of Landmark Turf & Native Seed. In particular, the Scott’s purchase of Columbia will negatively impact seed inventories available to sod producers and end users. We anticipate future consolidation in the industry.
  • Details of Scott’s purchase of Columbia shows 100% of Columbia’s seed inventory will be completely carried into retail for Spring 2021 vs. the typical winding down professional & distributor channels over multiple years, again due to retail demand. This results in an immediate loss of 10-15% of PRG for the seed industry, which has a cascading effect of tightening supply of all other cool-season grasses. This has already driven prices of Ryegrass up ~30% since Fall, and even commodity availability & price of products like Gulf Annual Ryegrass.
  • Based on statements from a recent gathering in Bradenton of both cool and warm-season sodproducers, inventories due to retail & professional demand for sod will also be low across the country.
  • Older cultivars of warm-season sod in the Midwest to Southern Texas are beginning to show widespread damage on Bermuda, St. Augustine, and Zoysia due to winter storms, especially on newly planted fields. Many will require re-planting, and end user jobs will try to    cycle between seed and sod, putting pressure on both. Foundational vegetative stock for re-plant of newer, more sustainable cultivars will be strained with more open ground, and with shortage of overall inventory should help drive sod prices up domestically across all species.

With these pressures, it may be difficult to fulfill 100% of  customer and end user expectations if demand increases, so it’s important to get out in front. Positive demand & low supply on seed and sod through 2021 will equate to strong profits; we see this as a positive for our entire industry. In our opinion, raising prices of all sod species is necessary in the short-term, and wise with the lack of fallback into seed. If you have any more questions, please reach out.

 

Adam Russell can be reached by emailing arussell@mtviewseeds.com.