Plowing out fields of grass seed last year didn’t sufficiently reduce crop supplies to spare Oregon farmers from a price drop this harvest season.

Not only are leftover stocks of grass seed weighing on the market, but consumer demand for the crop is falling short of expectations, according to experts.

“The plow-outs were difficult and not something we like to do,” said Justin Burns, CEO of Barenbrug USA, a seed company in Tangent, Ore. “That probably wouldn’t have solved the whole problem, anyway. Sales have not been what we expected.”

In 2023, large inventories of the crop prompted seed dealers to order growers to plow out roughly 20-30% of their fields, which was meant to bring supplies in line with demand.

Even so, prices in 2024 have plunged more than 20% for tall fescue, to about 90-92 cents per pound, and roughly 13% for perennial ryegrass, which is fetching about $1.03-1.05 per pound.

Farmers and dealers recently struck a deal on prices for these common varieties as part of a formal bargaining agreement, under which grass seed is worth more if it’s certified as meeting quality standards.

“We hope we’re not seeing the beginning of a long tumble,” said Mark Simmons, executive director of the Oregon Grass Seed Bargaining Association, which negotiates with dealers.

Grass seed consumption surged after the COVID outbreak, when people had few spending options other than home and garden investments, but it’s since fallen below pre-pandemic levels, he said.

Food price inflation has diminished budgets for non-essential items among existing homeowners while high interest rates have limited construction of new housing, industry experts say.

Planting and reseeding residential lawns helps drive grass seed sales, which also depend on golf courses, sports fields and other large-scale uses.

However, the home-building market isn’t the dominant factor that’s weakening grass seed demand in 2024, at least compared to the major housing downturn in 2008, said Burns, CEO of Barenbrug.

“There’s nothing I can put my finger on and say, this is exactly why consumption is down,” he said. “It’s hard to know exactly what normal is.”

Unless grass seed sales strongly rebound, which is largely out of the control of farmers, the industry must simply cut back on production, experts say.

“We have too many acres compared to what the market will absorb,” said Simmons of the bargaining association.

Perennial ryegrass acreage available for harvest has fallen to 50,000 acres in Oregon this year, down from 62,000 acres in 2022, before plow-outs were ordered, according to USDA.

Turf-type tall fescue acreage available for harvest has dropped to 100,000 acres in 2024, compared to 116,000 acres two years ago, the agency said.

The USDA determined about 10% of this year’s perennial ryegrass acreage and 19% of turf-type tall tall fescue is being grown without a contract.

“Not all of the plow-outs were complied with,” said Simmons.

Some farmers keep their fields planted to grass after their contracts end due to a lack of alternatives, hoping to find a buyer for the seed on the open market, he said.

According to rumors, some seed dealers had trouble getting their farmers to comply with plow-out orders and considered legal action, but Barenbrug did not experience such problems firsthand, Burns said.

“As far as I know, our plow-outs were honored,” he said.

Lower prices are expected to further reduce production, particularly since the cost of raising the crop will exceed prices by up to 13 cents per pound for tall fescue and 14 cents per pound for perennial ryegrass, according to industry experts.

“None of us like to grow things under what it costs to produce them,” said Jayson Hoffman, a farmer near Sherwood, Ore.

Farmers probably didn’t scale back their acreage as much as they should have in recent years, hoping that grass seed demand will bounce back sooner, he said.

Meanwhile, the strong U.S. dollar has hindered shipments of Oregon grass seed to China and other overseas destinations, where competition from Europe, Canada and New Zealand has intensified, Hoffman said.

“Those export markets are getting gobbled up by cheaper currencies,” he said.

The grass seed industry’s hardships have spurred state Rep. Anna Scharf, R-Amity, to send fellow lawmakers a letter asking to expand canola acreage in Oregon’s Willamette Valley.

Canola is currently subject to a 500-acre limit in the region, but Scharf and other canola growers hope to increase production and offer farmers an alternative crop.

“To stop farmland loss, keep family farms in business and allow farmers to retire, we, the Legislature, need to do better,” Scharf’s letter said. “We need to value our grass seed farmers, and all farmers, as much as we value (micro)chips manufacturers and data centers.”

Earlier this year, lawmakers extended the decade-old canola restriction until 2028, but Scharf is pushing to form a work group this September to negotiate lifting the 500-acre acre limit during next year’s legislative session.

Whether or not expanded canola planting proves feasible, farmers do need another crop that’s grown on suitably large acreage as a fallback when grass seed is oversupplied, Simmons said.

“Really, the answer for the Willamette Valley is other rotation crops,” he said.