Wednesday, July 23, 2014

 

sw-head-gv-oct2011

Expect Bullish Turf and Forage Markets

oct12_gv_kurt_austermannOpen any newspaper over the past few months and you will have read about the disastrous heat and drought that has stricken most of the country and their effects on agriculture. Most of the reporting has been, and rightfully so, on commodities such as corn, wheat and beans—items that immediately affect the world community.

But let’s take a quick look at how this weather is affecting turf grasses and forages currently, and in the upcoming year.

Turf Grasses
While the drought took its toll in the midsection of the country, the exact opposite happened in the Pacific Northwest. June was actually the second wettest month on record, reducing some yields by 10 percent. While the carryover on many seeds was low, the overall production was adequate. However, with the destroyed turf areas in the rest of the country, the demand this fall and spring should be outstanding if Mother Nature cooperates. Certain varieties will no doubt sell out.

Competition for planting acres will be even more intense this coming year. With commodity pricing being what it is (think wheat), it will be much more difficult to place acres than it has been in the past.

Also, for the most part, farmers are in good shape right now and can hold out for higher prices.

Everything is set up (high demand, minimal supply and strong competition for planting acres) for turf grass markets to continue to firm up for the rest of 2012 and well into 2013.

Forages
Again, with the exception of some of the forage grasses grown in the Northwest, the rest of the forage production areas were hit hard. With pastures being the worst they have ever been, hay in extremely short supply and the price of corn, many cattle producers have been forced to sell off a significant amount of their herds.

Forage markets are the strongest they have been in years, with big demand coming from the European Union and China. Alfalfa and Bermudagrass are at near-record levels as the reduction of acres over the past several years has reduced supplies.

There are severe shortages in sorghums. There are adequate acres as of early August but they need rain. Even if it rains by mid-month, there will still be somewhat lower yields. If no rain, we could be in for a very short supply. We could see imports from other origins, such as South America and South Africa, like last winter.

Canadian forages will be short and, in some cases, may not be enough to meet demand. And, again, there will be tremendous pressure to compete with commodities for acres.

It also all adds up. High demand, low supply and high competition for acres will make for a very bullish forage market well into 2013.

As president of the Western Seed Association, I would like to invite one and all to attend the 113th Annual Meeting to be held in Kansas City, Mo., November 3 to 6. With the situation the way it is, look forward to a busy and well-attended conference.

Kurt R. Austermann, vice president of seed, Siemer Enterprises/Mangelsdorf Seed and president of the Western Seed Association

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