Transplanting seedlings grown in organic material pots

This is something I never realized. This information came from the University of Minnesota Agricultural Extension department.
" When transplanting seedlings grown in peat pots, newspaper pots, cow-dung pots, or any other containers made of organic matter, trim the pots down to soil level. The collars of these pots, exposed to drying air, will wick water away from the root zone. To encourage roots to spread out into garden soil, carefully cut or tear holes in the bottoms of these pots, because they usually don't break down completely in the soil, and may inhibit root growth."