Drought in Central Oregon could impact global seed supply

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Drought in Jefferson County, Ore., is putting a heavy burden on the area’s farming community, affecting everything from crop production to equipment sales. But the drought is now having wider implications, causing price hikes for some varieties of seed. And the situation could worsen next year.

Troy Kuenzie, president of Pratum Co-op, which markets Jefferson County grass seed in the U.S. and overseas markets, said the price for some grass seed grown in Jefferson County has surged more than 50% over the past year.

Jefferson County farmers specialize in vegetable and grass-seed production and are globally dominant for some varieties. But most of the county is now in exceptional or extreme drought, forcing farmers to cut back their crop production. For some farmers, the water that was planned for the autumn watering of next year’s crop has already been exhausted.

The price hikes in the grass-seed market are felt mainly by buyers who sell seed to golf courses.

Marketplace prices have increased 50 cents to $1 per pound for perennial grasses, said Kuenzie, who is based in Salem and has worked with Pratum since 1998.

“Last year bluegrass was $1.20 in the market. Now it’s $2, … because of demand and also drought in the whole Pacific Northwest.”

Global player

Around 12,600 acres of Kentucky Bluegrass and poa trivialis grass are in production in Jefferson County, which produces 16 million pounds of seed, raising $40 million for growers, seed producers and seed companies in Madras, said Kuenzie.

That amount of crop makes Jefferson County a global player in the seed market. Roughly 20% of the U.S. supply of Kentucky bluegrass and 80% of the supply of poa trivialis seed comes from Jefferson County.

Poa trivialis is primarily used by golf course maintenance crews to keep fairways green in winter. Golf courses in Las Vegas, Palm Springs and Arizona rely on this type of grass to keep their fairways playable throughout the year. Kentucky bluegrass is also used on golf courses, as well as lawns and athletic fields.

U.S. buyers are not alone in paying higher prices. The market is also affecting seed buyers in China, Japan, Europe, Saudi Arabia, Turkey and other countries.

“It is a devastating situation for Jefferson County farmers and businesses and for our customers nationally and internationally,” said Dean Boyle, the Madras Pratum Co-op site manager.

Pratum Co-Op has buyers spanning the globe. Its grass seeds, sold under the names Mountain View Seeds and Landmark Seeds, are sold in Turkey, Saudi Arabia, China, Japan, Israel and parts of Europe. Not only are costs going up for the seeds, but it’s also getting harder to source them as availability dwindles.

Abandoning fields

Jefferson County also produces huge volumes of vegetable seed for farmers in the U.S. and overseas markets including Europe, Asia, South America and the Middle East. The Netherlands, Japan, and Russia are a few of the biggest buyers.

Roughly 40% of the world’s carrot seeds are also produced in Jefferson County, according to Ken Stout, chief executive officer for Central Oregon Seeds Inc., a seed processor in Madras. That amounts to $20 million to $30 million in annual sales.

Stout said the water allotment cuts have forced some farmers to abandon fields. Wickiup Reservoir, which supplies most of the water to Jefferson County farmers, is just 8% full and is expected to run dry in less than four weeks, leaving little prospect for fall planting.

Despite the disruption, Stout said it’s too soon to know if lower seed production will translate into higher prices for next year’s contracts.

“We have been able to meet our customer’s demand to this point, but this year we will not place some acreage that we have been requested to place because of water restrictions,” said Stout. “I would go as far as to say this is the first time in a long time we have had to do that.”

It’s possible, he said, that buyers could simply turn to other markets.

“Companies will see that production elsewhere,” said Stout. “That erodes our market and our ability to bounce back from this.”

Future benefits dwindling

For Central Oregon farmers, the price increases, at least for grass seed, do not compensate for the lack of volume, said North Unit farmer Marty Richards.

Price increases “will help in a small way for this year, but we are unable to plant more this year due to a lack of water, so are unable to benefit in the future,” said Richards, who grows carrot seed, Kentucky bluegrass seed, peppermint and wheat.

Mylen Bohle, an agronomist for Oregon State University Extension, described the current situation as an “economic disaster” for Central Oregon. Some growers have dried up three-fourths of their farmland, he said. It’s not just the seed farmers that are affected. Hay growers are being hit, too.

“There will be much less hay available this year,” said Bohle. “Hay prices have gone up a bunch already, which will make it tougher for those buying hay to feed hungry animals until next late spring and early summer.”

Until now, the impacts have been less harsh for growers who focus on seeds, said Boyle, as these higher profit crops have helped them weather the storm. These farmers are cutting back on less-profitable crops such as wheat and alfalfa.

Water is being used instead for the seed crops. But with less water available this year, many farmers won’t have enough to prepare their fields for winter.

“Without water, the fields will be very stressed, and won’t set them up well to survive the winter,” said Boyle. “Some of the fields will be abandoned.”

Heat waves, water cuts

The problem for farmers in Jefferson County became sharper earlier this month when the North Unit board cut the annual water allotment to farmers from 1 acre-foot to 0.8 acre-foot. The sudden loss of 20% of their water meant that some seed farmers have already exhausted their supply, ending for them any chance of watering in the fall for the 2022 crop.

The allotment cuts weren’t the only bad news for farmers. The heat wave that started in late June also had a devastating impact.

John Spring, an assistant professor with OSU’s College of Agricultural Sciences, said when the temperatures soared past 100 degrees, farmers had to apply more water than normal to keep their crops from failing.

“For the bluegrass crop, seed quality and seed yield were both likely reduced, but by a currently unknown amount,” said Spring. “Losses in the carrot crop from the heat are probably mostly reduced from reduced pollination efficiency.”

Boyle from Pratum Co-op is already anticipating lower production for his grass-seed business in 2022. But this era of lower production comes at a time of increased demand.

“Our contractors call us up and want us to grow more, but we are unable to,” said Boyle. “We just can’t do it because we don’t have the water.”

Originally published in the Capital Press, 7/27/2021