© 1997, 1998 Streamline Publications

How high can prices go for seed? No one can say with any authority since the seed market, like other commodities is "futures" driven.

"My brother-in-law, Louie, invited me to participate in a killing in the commodities market. He failed to mention that it was me getting killed.

Commodity prices are affected by speculation of what the demand will be, the actual demand, and unforeseen pressures such as drought or a poor crop. Since seed production is tied to weather, level of demand for a particular species or cultivar, acreage available for harvest and the clairvoyance of the growers, it is a risky business.
Success in the seed market depends on how well growers and production seed companies anticipate and respond to cyclical market fluctuations. In the case of Tall Fescue seed the cycles for any given production field fluctuate during the 10-year field certification period.

Lousy Economy
When the economy dropped off, so did construction and the demand for turf seed. Growers found that they had overproduced, ending up with a huge stockpile of seed that they couldn't sell at a profit. The seed was offered on the open market at depressed prices and still there were no buyers. Even with seed available at a low price there was no significant increase in sales because the areas to be planted weren't increasing in number or size.
Producers cut back production.
New construction landscape contractors, anxious to win contracts just to survive, bid low counting on having seed available at depressed prices.
Prime building contractors who see an opportunity to perhaps secure landscaping at an even lower price hold off contract awards. When the prime finally comes through after a months-long delay, the bid price may not be met.
Now that the market demand is returning, prices rise. Seed price quotes can rarely be locked in for more than a month and often for only a few weeks.
Now that the economy is showing signs of growth and construction increases, there is little Turf Type Tall Fescue or Perennial Ryegrass seed available. High demand and low supply puts upward pressure on prices for the seed stock that is available. Good news when supplies are marginally down but bad news when there is nothing to sell. And when the landscape contractor is caught in the squeeze profit margins are eroded or eliminated.

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