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Those little pellets are fungus factories as far as I'm concerned. I really dislike them.
Paul is right, if you are reusing pots, disinfect them first, and start with new seed starting mix.
I've had problems with damping off when I start seeds indoors. Bottom watering helps,(put the water the the tray you have the pots in and let the water soak up into the soil through the holes in the bottom of the pots). This also promotes the plant's roots to dig deeper.
A fan on low also helps. It will help keep the surface from staying too damp, and it will help strengthen the plant's stem.
Then I would make sure you are using seed starting soil, rather than potting soil. I usually don't start running the fan until they are up about an inch, but as long as you make sure they stay evenly moist, I don't see any reason you can't start running the fan right away.
I also don't like those trays that have the lids on them. I feel that they keep too much moisture in, and allow virtually no fair flow, which contributes to the fungus growth/spread.
To avoid damp off for my indoor started seeds I do a few of the things listed on the TC page I linked to. I water w/ Chamomile Tea occasionally, I top w/ ground cinnamon and/or chick grit and always, always have a fan running in the room. Doing these few things has dropped my damp off rate dramatically from previous years. Both cinnamon and chamomile are natural anti-fungals and will prevent damping off.
I don't ever use chemicals when I'm starting seeds. I try to stay as close to organic as I can in my gardening. Thankfully, I've never, ever needed to use chemicals since adopting these easy techniques.
Paper pots are fine...I just don't have the time to make them. Damp off is fungal and it's most important to use sterile seed starting mix. Nothing else will do. The anti fungals mentioned are quite useful, but the top of the soil shouldn't stay wet...dead (literally) giveaway for damp-off. Bottom water and don't overdo it.
I hate peat anything...refuse to use it...just a set-up for troubles.
If you're using cells you can cut them apart and remove the ones that have germinated. That's what I usually do. You may not want to cut them apart though. At this point all of my cells are cut into 6 packs...makes it easier to clean them too.
I have always used bio dome sponges but no more because of this problem...I have some 38? packs and ordered the 72 cell packs today...bio domes and sponges are great for very expensive seeds, but not for regular ones..thanks for the help
It is definitely damping off. I worked in one of the bigbox hardware stores and in many gardencentres in southern Ontario and there is a product available in Canada called No-damp. It is about 1 or 2 Oz. liquid that you mix with water and water your seedlings with it. Check at Lowe's, home depot, or even Meijers may sell it. Or your neighbourhood garden centre. If they have knowlegable staff, they will know if it is available or something comparable. This is a Canadian website that you can order it from. Make sure they will send it to the US as it is a pesticide. http://www.veseys.com/ca/en/search?keywords=no+damp
I think I am going to try the Chamomile Tea first... I read quite a few sites and had advice from other dg members... I also picked up some food grade peroxide... I am going to try both and see what works out
onewish1, last year I used the NO-Damp solution to deal with the slight mold bloom I had on the surface of the pots of my daylily seedlings each time I watered and fertilised - this year, I'm using a solution of chamomile tea - it works like a charm, I have it in a spray bottle, and if I see it starting, just spray, and it kills it instantly - and no hideous chemicals, which is why I wanted an alternative to the NO-Damp.
I start lots and lots of seeds every spring under lights in my basement. I buy 3.8cf. bags of starter mix, and I sterilize it in turkey roast bags in the oven. I wash all containers with soapy bleach water, and I put the starter trays in flats with domed lids under lights. For those seeds that are very tiny, I mix them with a little sterilzed coarse sand and surface sow them.
I mist the surface of the trays and the inside of the domed lids with a spray bottle of clean water. When the seeds start to sprout, I take off the dome lid and start to water them under the trays.
I believe another contributing factor in dampening off is planting the seeds too densely. All those tight little plants can't get air. Lobelia is usually the one I have to watch closely. I, too, have watered with chamomile tea when necessary, and I always isolate any trays that seem to be having a problem.