Sarah Weigum started to suspect this wouldn’t be a typical year for seed sales back in July, when one of her customers called to book seed for next spring.
“My customers aren’t normally the type who call in July for seed for the next spring, and that was just the beginning,” said the Three Hills-area seed grower. “I’ve fielded a lot of calls for seed since then from farmers who have realized they don’t have a lot of grain for next year. It just really tells you how bad the situation is.”
Heat and drought battered yields across the Prairies and seed growers, of course, weren’t spared, said Kelly Chambers, executive director of Alberta Seed Growers.
“Seed growers are just specialized farmers, so there are pockets of the province where seed growers have been impacted quite hard,” she said.
Some areas of the north “looked like they had been torched from the heat,” even on forage seed operations, she said.
“I’m not sure what recovery is going to look like — grass is very resilient, but as a seed crop, I don’t know,” said Chambers.
Other parts of the province, though, are compensating for the reduced production. Some areas, such as central Alberta, got just enough rain that yields are only slightly below average. And in southern Alberta — which was hardest hit by the drought — seed production is generally done under irrigation because it’s a high-value crop.
“If you’re able to irrigate, this was an ideal summer — lots of heat and the ability to put on water on demand, for the most part,” said Chambers. “It’s expensive production and it takes a lot of time and a lot of money to run the pump. But in a year like this, it’s what helps us maintain a relatively normal level of seed for the province.”
Even so, Weigum thinks it will be difficult to source large volumes of seed on the Prairies this year. She’s already sold out of several varieties — also unusual for this time of year — and all of the registered seed will be saved for next year, rather than some of it going into the certified seed market as it has in better years.
That will make supplies even tighter into the fall and winter, she said.
“Our seed crops yielded about a third to a half of our long-term average, so we’ll have quite a bit less seed to sell,” said Weigum. “I do think seed will be in short supply in general because of the drought. It’s a widespread problem.”
‘Sticker shock’ coming
Those shortages, combined with high commodity prices, might lead to some “sticker shock” for those shopping for seed next year, said Todd Hyra, SeCan’s business manager for Western Canada. Whatever commodity prices are, seed prices are higher.
“Commodity prices have taken an incredible run in the last week,” Hyra said in late August. “When talking to our (SeCan) members, I am encouraging them to have a very open discussion with their customers about the commodity price versus the seed component of that price.
“In the case of CWRS (Canada Western Red Spring wheat), it’s over $10 (a bushel), some places $11 and occasionally $12. That is the certified (seed) selling price just six months ago.
“So customers need to calibrate themselves and know if the seed grower is asking for $17 or $18, that’s really driven by the commodity price. The seed piece of that is more likely $4 or $5 and the commodity is the bulk of it.”
In addition to producing seed, seed growers must pay royalties, inspection fees, and cleaning and storage costs.
“When setting seed prices, seed growers usually start with the commodity price and then they add their expenses and a margin to that,” said Weigum. “Some expenses, like seed cleaning or royalties, are per bushel, so they’re variable. But some expenses, like a stock seed purchase or a field crop inspection, are per acre, so growers will be trying to recoup those fixed expenses over fewer bushels.”
Some grain growers may choose to save more of their own seed for next year, but many may have to use every bushel to fulfil delivery contracts, she said, while others won’t want to miss out on current high prices.
“Grain farmers might not want to pass up an opportunity to sell into that market,” she said. “They’re going to be weighing that in their minds.”
Some seed growers may even sell their grain as a commodity rather than as seed.
“They know they need to supply their customers, but there are near-record prices for them just to take the commodity and go to the (elevator) pit,” said Hyra.
That discussion is already happening among some seed growers, Weigum added.
“I don’t think in our seed business we plan to sell anything into the commodity market that is of seed quality, but you can see the calculations for seed growers,” she said.
“You can sell it today for seed prices and you don’t have to do the cleaning or deal with any storage risks. Everybody’s situation will be unique, but it’s a discussion that’s happening.”
Chambers has heard talk about that as well, and while it may be tempting, she doesn’t think most seed growers will decide to go that route.
“That would take seed out of the system, and in a year like this, that would be critical. But I don’t think we’re going to see too much of that,” said Chambers. “Seed growers are generally selling to their neighbours, so they know what production has been like for their neighbours. Chances are they’re going to take care of their customers first.
“There’s rumblings about it, but I don’t know how much action there will be.”
Call early and often
Producers will also need to be careful that what they’re purchasing is actually pedigreed seed — a particular concern in a year of lower production and high prices.
“There’s always that sort of underground market, ‘I’ve got this variety and it’s a lot less expensive than that pedigreed seed,’” said Chambers.
“But where is that seed coming from? There is concern that there will be attempts to pass off seed as pedigreed.”
The official proof of pedigreed seed certification is the ‘blue tag,’ which verifies that the seed is genetically pure, free from weeds, chaff and other seeds, and at 85 per cent germination or higher for Canada No. 1 graded grains.
“All seed growers make a point of keeping their certificates and the amount of seed they have readily available. That’s part of their business, and any good seed grower can get that information for you,” said Chambers.
“Even a bulk load of seed would have a certificate, and proof of the blue tag can be provided.”
Seed companies, growers, and distributors have ways of helping farmers source pedigreed seed that don’t involve brown-bagged sales, said Brent Derkatch, director of Canterra Seeds’ pedigreed seed business unit.
“In years when there are real or perceived seed shortages, it doesn’t automatically mean that brown-bagged sales are OK,” he said. “I think it’s important for farmers to know where their seed is coming from, that they know if they are buying seed by variety name that it’s pedigreed seed — that it’s certified seed with the blue tag. It’s critical that we continue to make sure that those rules and regulations are followed.”
So producers looking for specific varieties of pedigreed seed will want to shop around even earlier than usual this year.
“If farmers want pedigreed seed for next season, they should be talking to their local seed grower now,” said Chambers. “The newer varieties that perform well are likely to be the first varieties to sell out.”
Farmers will also want to do their research and shop for seed with other varieties in mind if their first choice is unavailable.
“Growing something is better than nothing, so know your second and third choice so you can make your decisions quickly,” said Weigum. “Just being in a good relationship with your local seed grower will help, so keep those communication lines open.”
But more than anything, be patient when calling around for seed this fall and winter.
“It has been a tough year. People are at their wits’ end. Anxiety has been driven up even higher,” said Chambers.
“Be ready to make a lot of phone calls if you’re looking for seed, and be ready to hear that some seed growers are just as short of supply as many farmers are. So be kind.”
– With files from Allan Dawson/Glacier FarmMedia
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