The rush of farmers into the new federal crop-swap program, in which they are paid in surplus grain for not planting crops, may solve some problems, but it has also created one.
There is a shortage of the alfalfa, clover and grass seeds now needed to cover the nonproducing land, and prices for seeds that are available are soaring.
The farmers who've told the Department of Agriculture that they intend to retire 82 million acres from production need these cover-crop seeds to comply with payment-in-kind (PIK) requirements that idled land must be protected in soil-conserving ways.
For most farmers, that means planting alfalfa, various clovers and ryes, orchard grasses and fescues that will hold the soil in place and prevent its erosion by wind and water. Alfalfa and the clovers also add enriching nitrogen to the soil.
The problem is that no one calculated that farmers would sign up in the PIK program in the numbers they have. The seeds are grown a year before they are needed, but in early 1982 PIK was not even a gleam in Agriculture Secretary John R. Block's eye.
The result is a shortage of cover-crop seeds in 1983, frenetic scrambling by suppliers to help customers, prices reportedly doubling, tripling and quadrupling. Dealers are in clover, that is.
Neil Sampson, executive vice president of the National Association of Conservation Districts, said that "farmers say they are scrounging for these seeds. I expect strong price implications in all this."
Chase Cornelius, of Northrup King Co. in Minneapolis, the country's largest alfalfa and forage-crop seller, verified this.
"We're absolutely scraping together every last pound of seed we can find," he said. "Many dealers are sold out; prices are skyrocketing."
Prices vary according to supply, but Idaho alfalfa seed that went for 80 cents a pound last fall sells for $1.50 today. In Minnesota, last year's $1 seed sells for $1.80. Some improved varieties cost more than $2.50.
"We've literally seen markets and demands for these seeds that nobody in the field would have predicted," Cornelius said. "We are raising prices; yes, we've gone up some, but we have exhausted all our surplus safety stocks."
To make matters worse, said David Lambert of the American Seed Trade Association in Washington, seed producers don't know if Block intends to continue the PIK program next year. If so, they will find ways to have more cover-crop seeds available, but Block has made no decision.
"Our people are calling and asking about 1984, but we just can't tell them. The uncertainty bothers us, but there's nothing you can do about it," Lambert said.
In Savage, Minn., Jerry Peterson, president of the turf and forage seed division of Pioneer Hi-Bred International, reported that his firm is sold out of some varieties and mixtures of cover-crop seeds and said he expects strong demand to continue through the summer.
"But one of the largest beneficiaries of the PIK program has been the Canadian seed industry," Peterson said. "Last November they began accumulating Canadian low-cost clovers that were to be used by U.S. farmers, and now they have tripled and quadrupled the prices.
"When the Canadians heard we were that serious about a land diversion program, they began raising prices, and a supply-and-demand effect took place.
"But the alfalfa seed industry here has benefited, too," Peterson said. "A year ago we had huge surpluses. We overproduced. So this has resolved itself in one year."
Dan Jacklin, head of Jacklin Seed Co. of Coeur d'Alene, Idaho, one of the country's big forage grass and clover seed firms, agreed that supplies are extra tight. But he's loving it.
"Alfalfa prices have doubled since PIK, and we had high inventories of clovers, ryes, fescues, which have doubled in price," he said. "It's great this year, but we could face a backlash in 1984. Farmers may plant more alfalfa and grass seeds this year because prices are up, and next year we may be sad."