Greening causes bottlenecks in the seed business
There was plenty of talk about the subject of Greening in this year's spring business. This term covers various agri-environmental measures, flower strips, nautre preservation, water conservation and other conservation measures. Marc Möller, Seeds expert at AGRAVIS Raiffeisen AG, takes a look at the current situation.
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Mr Möller, to what extent did the subject of Greening affect seed sales this spring?
Möller: The subject of Greening had a considerable impact on the seed business this spring. It led to uncertainties at various trading levels and retailers faced the challewnge of offering the appropriate assortment in the spring. Along the entire chain, larger quantities of "special cultures" had to be purchased and provided in seed mixtures for various requirements. Because of this situation, not all the items could be provided at the desired time and in the respective quantity.
How does this affect prices?
Möller: At the start of the year, varieties such as clover, red clover and phacelia were considerably more fixed compared to the previous year. Because of the increased demand, items such as buckwheat and sweet peas increased. Import of the items from non-EU countries became more expensive because the exchange rate. We have to wait and see from when the seed mixes are sold out. If necessary, the recipes could also be adjusted to the new situation.
Which components are particularly affected?
Möller: The main components in the catch crop cultivation remain mustard and fodder radish. Last month there were offers at less than the production cost. This indicates a need for liquidity among individual producers. Meanwhile, this situation is leading to a slightly inflationary development of the wholesale prices. Fodder radish is used more in mixes where this leads to shortages of individual resistance groups. In the medium-term, the situation is expected to change, as the growing fields have reduced in the production countries – according to the initial information – by 15 to 30 percent, depending on the type. The low sales indicate risk minimisation. When using catch crop mixes compared to single cultivation, approx. 50 percent of other species are used. Reinforcement of these two species can are expected for the coming season.