Lucerne seed prices have begun to ease off the record highs of 12 months ago

Buyers of public variety lucerne seed in its production heartland of South Australia have said in the past year, farmgate prices reached $8.50 a kilogram, twice that of five years ago.

Weather events in most major seed producing regions globally had created a "perfect storm" that impacted on supply, including in Australia, Europe, Canada, the United States, Argentina and South Africa.

These events coincided with stronger than usual demand from the world's largest buyer, Saudi Arabia, which had accounted for as much as 50 per cent of trade volume in the seed this past two years.

The most recent disruption to global supply was in August when tropical cyclone Hilary hit lucerne producers in southern California's Imperial Valley, the US's premier lucerne seed region, taking out the last third of the valley's seed crop before it could be harvested.

Australian seed companies have said, this year, public varieties were sold out a couple of months ago, or only had small volumes of carry-over remaining.

"Lucerne seed is as low in stock levels as I've seen in my 12 years in the industry," said Josh Rasheed, Naracoorte Seeds, at Naracoorte, SA.

"We're only in October and we're nearly sold out of everything."

Harvest is five months away, typically kicking off at the start of March.

The situation was recovering though, with overall production having lifted from about 70pc of normal three years ago, to about 85pc now, he said.

He also expected with lower livestock values, more producers would let their stands go through to seed for harvest, rather than graze them.

DLF Seeds production and procurement coordinator, Anthony Quilter, agreed things were "balancing out".

The company, which has its head office at Truganina, Vic, has a breakup of about 30pc proprietry and 70pc public variety in its lucerne seed part of the business.

Mr Quilter said while prices have been at record highs, he did not concur with the idea of a seed shortage.

He said there had been a good harvest last year and for the year to date the company had exported less volume than in the previous four to five years.

"But we are in quite a high price decile, too," he said, explaining that the market peaked about 12 months ago, around which time the highest price he heard was $8.50kg (farm gate).

"You'd still need $7-$7.50 to buy a kilo of lucerne seed (now), which is about double what it was five years ago."

Mr Quilter expected a lot of hectares that in the past four to five years have been grazed by lambs to be left for seed production.

"There's no money in grazing lambs this year, so there'll be a lot of paddocks that will be shut up for seed," he said.

Owner/director of Wilkei Seeds, Ben Farmer, Keith, SA, said there was some carry-over seed, but not a lot.

Mr Farmer has been in the lucerne seed game for three years and said strong demand globally and domestically had taken what was being produced this past two years.

"We are coming off record high prices that hit $7-$8/kg on farm about six months ago," he said.

He said the drier outlook didn't bode well for dryland seed production, but a hot, dry summer would be ideal for irrigated crops and they may well make up for any shortfall come harvest in March.