March 2018

March 2018

Possession or Price - Can You Have Both?

Here we are, turning the calendars to March. Winter will soon be over. Most companies who have active spring seed business have already purchased or booked a good portion of their needs and are already getting them into retailers. Warm weekends and thawing ground bring out the urge to plant. Meanwhile, wholesale markets remain high priced on many items and are expected to stay high until new crop. Some crops are virtually sold out with remaining balances not always at the preferred quality.

We known your dilemma in these markets. Will new crop be priced lower? Should you put your name on new crop seed? How much carryover should you keep to get started? When will new crop be ready?

While we wouldn’t claim to know the best answers to these questions, we do want to pass on a few observations that might be helpful to you:

  • Last year’s price increases in both annual ryegrass and tall fescue seemed to have little to no bearing on consumption. The only regulator on ryegrass sales seemed to be availability. Commission reports showed less than a 3% drop in July-Dec total annual and perennial movement over the prior year. As to tall fescue, July-Dec movement out of the Oregon was up 15% over last year!
  • Supplies of annual ryegrass are very low. New crop can’t come soon enough. But when it comes, there is already a line of buyers who have stepped up to the table and committed to a price so that they can get their seed “first.” If you haven’t booked yet, you are already second in line.
  • The above statement is true for KY-31 tall fescue.
  • We live in a global world. Other parts of the world are hungry for perennial grasses. Tall fescue continues to be that choice. Extra inventories of forage-type and turf-type are quickly diminishing. This is also not a short-term grab. These are emerging markets with expected growth for many years.
  • While new-crop pricing on ryegrass, fescue, and orchardgrass (which is also tight) will likely be lower than current prices, you can’t sell what you don’t own, nor can you ship what you don’t have.

KY-Early Timothy Is Worth Every Penny

If you understand that when we sell seed to customers, we are selling them the crop it produces, you get it. You know that higher yields outweigh the cost of higher seed. But we know that not everyone gets it. Many customers only view price. That said and understood, if you have a customer base that wants more profit and also “gets it,” you need to give our KY-Early Timothy a serious look. This UKY/USDA-ARS release really cranks out the pounds. Look at these numbers:

  • 34% higher than Climax and 12% higher than Clair over 3-years at Lexington, KY.
  • 15% higher than Climax in year one at Cornell, NY.

At $200/ton timothy hay prices, the MINIMUM net return on ONE bag of seed is almost $84! If you have a customer base that wants higher production, if your farmer wants more bales of high-demand timothy hay off the same acres, then make sure to bring KY-Early into your program. Supplies are limited and distribution agreements may restrict availability in certain regions. Contact us now for both spring and fall bookings. Visit kyearlytimothy.com for more data.

KY-Early profit calculator