Emergency services were called to the blaze near Leeton that erupted inside a Southern Cotton seed shed shortly before 6pm on Monday.

The fire was contained, but the shed worth about $1.5 million was extensively damaged.

Southern Cotton's insurance provider was still assessing the damage late yesterday afternoon, with damage to stock expected to ramp up the bill.

"It's devastating," Southern Cotton general manager Kate O'Callaghan said.

"The damage is pretty serious. We're not sure yet if they will be able to repair it or whether it will be written off completely."

Workers were yesterday salvaging undamaged seed from the shed's smouldering remains.

Southern Cotton and fire authorities have ruled out suspicious circumstances as the cause of the blaze.

Ms O'Callaghan said spontaneous combustion is not unheard of in agricultural production.

"There can be hot seeds that do flare up," she said.

"But we're certain there are no suspicious circumstances."

NSW Fire and Rescue Leeton Captain Graham Parks said the fire was extinguished using a thermal imaging camera to identify hot spots.

"By the time we got there, there was a lot of smoke and not a lot of fire," he said.

"There was lots of damage."

Ms O'Callaghan said the salvaged grain would be sold as lower grade stock.

She also said employees were "optimistic" the shed would be operational again by April.

"The off-season gives time."