Covering newly seeded grass with straw will help retain moisture and make successful establishment of the lawn more likely, but what do you do with the straw when the grass has sprouted? You can leave it on the lawn or rake it up and use it as compost, as mulch in another location or as bedding for animals.
Leave the mulch in place
As soon as the grass is about 2 inches tall it is ready to be mowed. As you mow, the straw will be cut into small pieces by the mower and will fall back into the grass where it will decompose and add nutrients to the soil. Go over the grass twice in different directions to ensure that the straw is cut into small enough pieces. This solution is best in areas where there is sufficient rain to keep the grass moist and help decompose the straw.
Use the straw as mulch
The straw can be gently raked off the grass and used as mulch in a vegetable or flower garden. Mulch helps retain moisture, keeps the soil cooler and adds nutrients as it decomposes. This is especially useful where the climate is hot and dry. If there is a drip system under the mulch the water will be applied directly to the root zone and not absorbed by the mulch, making the garden even more water efficient.
Compost the straw
The straw can also be added to the compost pile. Straw is dry and high in carbon. Some high-nitrogen waste such as kitchen scraps or green weeds or leaves should be added at the same time to help it decompose more quickly. The straw can be piled next to the compost pile and added a little at a time as the kitchen waste is added. This solution works in any climate.
Use the straw as animal bedding
Used straw can also be reused in nesting boxes and as bedding for chickens and other animals if it is clean enough. Do not use straw that is soggy or has started to decompose, but if the straw is still reasonably clean, or if you have straw left over from mulching the newly planted grass, it can be put in nesting boxes, on the floor of the chicken coop, under the rabbit hutch or under a blanket as an outdoor bed for the dog.