Shrinking market and fewer seed companies challenge forage producers

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By ANDY ANDREWS
Contributing writer

GRANTVILLE, Pa. — Though preliminary tests were completed on Roundup Ready alfalfa and the seed was ready to hit the market in spring 2006, in 2007 a northern California federal district court judge ruled the seed could not be offered for sale until the federal government prepared an Environmental Impact Statement.

The judge, Charles E. Breyer, believed insufficient testing was conducted to ensure environmental safety and therefore Monsanto, the seed manufacturer, couldn’t sell the seed, stopping all sales.

Overturned

However, a recent Supreme Court ruling overturned the judge’s decision and allowed the seed to be allowed in the market. Some industry experts are predicting the genetically transformed seed could be ready by spring of next year.

“I think they are very optimistic,” said Marvin Hall, Penn State forage specialist who spoke to more than two dozen certified crop advisers and agri-industry representatives Oct. 26 during the first of a two-day 2010 Keystone Crops and Soils Conference at the Grantville Holiday Inn in Grantville, Pa.

Hall said the fate of the Roundup Read alfalfa will alter the industry and pointed out the challenges seed companies will continue to endure in the face of a severe economic recession that has impacted traditional growers, such as dairy farms.

Outlook

The “big picture,” according to Hall, appears pretty grim. USDA data points to a shrinking rather than expanding market for forage seed, especially in dairy. During the 10-year span from 1999-2009, Hall said U.S. dairies with less than 500 head of cattle shrank from a high of 110,000 farms to 60,000 farms.

In the same period, dairies with more than 500 head of cattle nationwide went from 2,500 in 1999 to 3,500 in 2009. Those smaller farms combined produce more milk than “all of the 60,000 small farms,” said Hall. Few of the farms will get bigger, which means less individual total sales of seed.

In an eight-year period within that same decade, according to Hall, Pennsylvania shrank by 54,000 cows, from a high of 545,000. According to USDA statistics, nationwide, California produces 21 percent of the milk in the U.S., followed by Wisconsin at 13 percent, New York at 7 percent, Idaho at 6.5 percent and Pennsylvania (ranked number 5) at 5.6 percent.

Statistics

In 1996, Pennsylvania was home to 12,000 dairy farms. In 2008, that number had decreased to 8,000, and the numbers have fallen dramatically since the Great Recession began in late 2007.

“We lost 4,000 dairy farms in Pennsylvania in the last 10 years,” Hall said, further impeding seed sales. Half of the 8,000 dairy farms remaining have fewer than 50 cows or less (about 3,000 farms). Most of the farms have less than 100 cows, which include the Amish and Mennonite.

“It will be tougher and tougher for them to make a living,” said Hall. In the meantime, horse farms continue to expand, boosting the need for certain types of forage seed. In the latest USDA data, there are 300,000 horses in Pennsylvania.

“There are more thoroughbreds in Pennsylvania than Kentucky,” he said. Thirty-eight thousand households contain horses in Pennsylvania. About 31,000 operations house horses.

“If you compare 8,000 dairies to 31,000 horse farms, you find there is a market out there,” Hall said. But 75 percent of the horse farms measure 10 acres or less. One of the concerns the U.S. Department of Environmental Protection may have is the large amount of horses on small acreage, bringing to the forefront many nutrient management issues.

“It’s a problem brewing,” said Hall. Statistics are hard to locate for organic hay production, and Hall cited 2005 numbers. That included 400,000 acres of organic hay nationwide. But organic hay, while a growing market, makes up less than 1 percent of total alfalfa production, he said.

“The state of the forage industry is in some pretty rough seas,” said Hall. At one time there were eight alfalfa seed development companies. Now there are only four in the U.S., including Forage Genetics (Monsanto), Pioneer (DuPont), Dairyland Seed and Cal/West Seed.

With the impending open sales of the Roundup Ready alfalfa seed, there are four years of inventory built up, said Hall. However, on the other side are the turf seed markets, which continue to shrink. Even the amount of seed is becoming less per bag because of the seed coatings that customers want.

Factors

Homeowners aren’t buying new homes and, if they are, there is a movement toward more natural landscapes, said Hall, with less all-grass applications. Even the golf clubs are “belt tightening,” said Hall, which has created a “tremendous increase in seed inventory.” What will determine the direction of seed selection?

More emphasis on digestibility. The old standards of crude protein, acid detergent fiber, neutral detergent fiber and relative feed values are being replaced by a priority emphasis on digestibility rate and nutrient detergent fiber digestibility.

Vital

Hall noted that faster digestion and more complete digestion in less time in the rumen will be key to new varieties. The more energy the varieties provide to the cow, with high digestibility numbers, according to Hall, the “more milk farmers can get out of them.”

That means lower lignin levels (the material around more mature cell walls that allows plants to stay upright) will be available. Lignin, while critical to cell maturity, ties up and prevents digestion of the plant material in ruminating animals.

Hall also reviewed the work of the seed companies to provide better management of traditional pests such as alfalfa weevil and potato leafhopper, billbugs in orchard grass and diseases such as anthracnose, brown stripe, powdery mildew, summer blight and others.

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