Posted: Thursday, December 13, 2012 12:00 PM
Mitch Lies/Capital Press
Sam Cable of Barenbrug, speaking at the Oregon Seed Growers LeagueÕs annual convention, said European sales Òhave savedÓ the grass seed industry in recent years. ÒWe would still have an oversupply of grass seedÓ without European sales, he said.
Shift to selling coated seed, mulches decreases demand for grass seed
By MITCH LIES
SALEM -- A marketing specialist said here Dec. 10 that a decline in grass seed movement in recent years can be attributed to economic factors and an increasingly common practice of adding coating and mulch to seed.
"If you go to the consumer aisle today, you will see that it is dominated by products that are 100 percent coated," said Sam Cable of Barenbrug USA. "So you started with 1 pound of seed and you ended with 2. Unless it's a mulch. Then you started with a handful of seed and ended up with a 5-pound product."
Speaking at the Oregon Seed Growers League's annual convention, Cable said total grass seed movement has declined from about 1 billion pounds in 2007 to 540 million pounds last year.
"This is why it becomes important that we keep these export markets going," Cable said. "They generally still want straight seed, although you can see that the major grocery store from France now wants all their stuff in the coconut mulch."
European sales and production contracts, particularly, "have saved the industry" in recent years, he said.
"We have had too much seed, not known what to do, the dollar drops, we become a very attractive place to do production," Cable said.
"If it wasn't for the fact that their subsidy is gone and they need us very badly right now, we would still have an oversupply of grass seed," Cable said.
Also, Cable said, who is buying the seed has shifted.
Prior to 2007, when the Great Recession hit, professional landscapers purchased 54 percent of the seed grown in the U.S., with consumers purchasing the remaining 46 percent. Today, he said, consumers purchase 54 percent of the seed direct from retailers, and professional landscapers account for 46 percent of seed purchases.
Looking forward, Cable said he expects to see a bump in the domestic market as people replant lawns damaged by "superstorm" Sandy.
"The Sandy storm is going to end up being a bump for the industry," he said. "We know that when those insurance checks start coming in two or three months, it will be lawn season."
Also, Cable said, the industry expects housing starts to increase, which could lead to a recovery in the professional landscaper market.
Also, he said, consumer sales should continue to increase in coming years.
"Home Depot stock is up. That is an indicator that Wall Street is betting on the consumer big box store to have a good season," he said.
"We still have a golf problem," he said, noting that the number of golf rounds are down.
As for the export market, Cable said it may be difficult for the Oregon industry to service major and smaller export markets with a dwindling stockpile of seed.
"As we look forward ... our biggest issue in terms of exporting seed is how do we give everybody with their hand out something to keep them happy," he said.
"Or are we as an industry going to say certain customers aren't worth it?" Cable said.