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A waiting game

AS ALFALFA producers gear up for 2010, industry sources indicate that seed supplies could be tight — especially for the elite alfalfa products.

“We've seen some very good demand for alfalfa products in 2009, and we anticipate reasonably good demand into 2010,” says Tom Strachota, general manager of Dairyland Seed. “But the alfalfa seed market will see some tight supplies.”

It's a long way from a few years ago, when the alfalfa market was literally overrun with supplies of alfalfa seed. The market has worked through that supply and is seeing steady demand for the high-value alfalfa offerings.

Because of the nature of alfalfa seed production, the supply of seed can vary significantly from year to year. A harsh winter can increase incidences of winterkill, thus increasing seed demand the following spring.

Although the dairy industry's troubles have not yet significantly affected alfalfa seed sales, a protracted slump could have a more profound impact. “If dairy prices remain depressed, it's quite likely that producers will stretch their rotations a year or two more than they would normally,” Strachota says. “And that would translate into less alfalfa sales.”

According to USDA data, new seedings for alfalfa and alfalfa mixes have dropped from approximately 3.4 million acres in 2006 to 2.6 million in 2008, a 20% reduction in seeded acres.

Alfalfa hay prices also can have an impact on seedings, as can prices received in the grain market.

What could have a major impact on the alfalfa seed market is Roundup Ready alfalfa, which was put into a holding pattern in the spring of 2007 when an injunction prohibiting its sale went into effect. A judge ruled that the USDA should have completed an environmental impact statement (EIS) before deregulating the crop. The issue has been mired in court proceedings and delays since that time.

The draft EIS is expected this fall, which means Roundup Ready alfalfa could be in the sales pipeline for 2010 planting. Seed companies that have licensed the Roundup Ready alfalfa seed indicate that there will be supplies of the seed should the okay be given.

However, it is also possible that the court battle could become even more protracted, with a possible review by the U.S. Supreme Court. Garrett Kasper, spokesman for Monsanto, says, “Monsanto continues to weigh our legal options.”

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