Panic in Seed Prices

Published on: 14:59PM Jul 01, 2008
Wheat harvest isn’t even finished yet, but panic is already creeping into the minds of farmers for next year’s crop.

What could possibly be causing farmers to lose sleep over next year’s crop when it’s far from even being planted? Another input problem - the price of seed.

First fuel, fertilizer and chemical, now seed. Farmers already felt the pinch of seed shortages last year with wheat, and then again this year with soybeans. But it won’t be shortages this year necessarily that could send seed prices soaring. It’s the price of corn.

When I was in Kansas helping my family out with harvest last week, we got a phone call from a friend of ours whose head was nearly spinning off his shoulders in panic. He wanted to know what we were going to be selling wheat seed for this year. The cause of the alarm? Someone just told him seed was going for…$25 per bushel.

Sound insane? Of course it does. The air gets pretty thin at prices that high, but that doesn’t mean it can’t happen. I remember only a few years ago people were complaining of seed being too high at $7.00/bushel. Then just last year, the local grain elevator in Dighton, Kan., at one time was buying wheat at over $13/bushel. What was seed going for at that time? As high as $20/bushel.

Prices like that left farmers shell shocked…and with good reason to fear that the same thing could happen again this year.

What if the corn crop turns out to be a serious disaster with a heat wave later this summer and the price of corn blows through $8 and heads to $9 or higher? You can be sure wheat will be right on its tail and dragging seed prices with it.

However, it’s still too early yet to bet seed prices could go that high. While there will be supply shortages in parts of the Southern Plains that were wrecked with drought, it would be within reason to assume that seed dealers banked on increased demand and expanded their inventories, which would hopefully take some of the edge off of price.

But will we ever see $7 seed wheat prices again? Something tells me I’d be wasting my time holding my breath. Seed prices in the double digits are going to be around for a while.