Gary Harris kneels with his dog Duke on a field of rhapsody bluegrass last week at Harris Farms north of Madras. Harris has been farming in the area since 1968.

Madras farmer Gary Harris was visiting his father’s condominium on a fancy golf course in Arizona recently when he struck up a conversation with the man in charge of taking care of the course.

The greens superintendent told Harris that instead of planting 1,300 pounds of Rough bluegrass on 3 acres of the course, this year the resort would be mowing the grass and painting it green for the remainder of the year.

For a grass seed farmer, that’s not good news.

With fewer new homes needing new lawns and golf courses resorting to cost-saving measures, the grass seed industry — one of Jefferson County’s most lucrative — is hurting.

Local farmers, no stranger to fluctuating prices or necessary innovation, are staying optimistic that the market will rebound.

But many agree this year is particularly poor for the grass seed market.

“The thing about agriculture is we have such a large investment. We can’t say, ‘Things are tough right now. I don’t want to farm for a couple of years,’” said Madras farmer Martin Richards, of Fox Hollow Ranch, who has about 200 acres of Kentucky bluegrass seed.

“You have to make a profit regardless. We are the supreme optimists because we always think next year will be a better year. … And we have to make do with what we have.”

It’s not solely Central Oregon grass seed farmers who will be hurting this year.

In 2008, the grass seed market statewide — for all varieties — grossed about $500 million, according to Brent Searle with the Oregon Department of Agriculture. For 2009, Searle expects those numbers to be closer to $300 million.

“That’s a huge chunk out of producers’ pockets,” Searle said.

In Jefferson County in 2008, the grass seed market grossed $11.4 million, from a crop produced on 8,000 acres, according to Rich Affeldt, an Oregon State University extension crop scientist. The county’s highest-value crop is carrot seed, which for 2008 grossed $11.8 million, using 2,700 acres.

Mike Weber, the managing partner of Central Oregon Seeds Inc., said this is the first time in 30 years his company is not renewing contracts with growers to produce grass seed.

“Most contracts are three-year contracts,” Weber said. “If this was the third year of the contract, you wouldn’t have a contract. A year ago, you could have had an (extension) of the contract for a fourth year.”

Weber said he’s never seen a hit to the grass industry as widespread as this one.

“Last year, Europe had a huge demand for grass. … That demand is down to zero right now because they bought enough from the states and filled their pipelines,” he said. “They aren’t looking to buy anymore.”

Les Gilmore, a seed production manager with CHS in Madras, echoed Weber, saying that his company will also not be extending contracts for most seed varieties. He said the biggest concern right now is the high cost of production — fuel, machinery, labor — compared to the falling price being paid for the product.

Gilmore said prices vary based on the grass variety, and they fluctuate constantly. But he said last year there were contracts paying $1.40 per pound for grass seed. Now, he said, it’s under $1 per pound.

“People are concerned the price will drop below production … We aren’t there yet, but we’re certainly concerned,” he said. “We would like to see the market turn around before the prices go any lower.”

Farmers still have an option to grow grass seeds for the open market. Instead of having a fixed price and contract, they can grow it on their own and sell it at the market price. But that can be risky, and choosing another crop isn’t easy right now, either.

“There are not a lot of options,” Richards said. “I think I’ll grow a little bit more hay. And I’ll wait until spring to see what happens and determine in the spring what I’ll change to.”

Wheat is a popular crop for farmers to switch to, but wheat prices aren’t great either. In 2008, it took 15,700 acres of wheat to gross $10.9 million.

Harris, who has been farming in the area since 1968, said farmers know how to survive tough times.

“In farming, the only game to stay alive is diversify. I’m still raising wheat, carrot seed and onion seed. They are going to carry the water and save my bacon. … The whole grass industry is not in fine shape right now.”