SEEDS OF CHANGE
IT'S PLANTING TIME. HOW ARE SEED COMPANIES IMPACTING THE PROCESS?
Linda L. Leake, Contributing Editor
What do you love most about spring, professionally speaking? If youíre a farmer, you undoubtedly savor the joy of planting seeds with hopeful anticipation of successful crops to come. If you sell seeds, you have the pleasure of providing goods and services that favorably impact the food chain and your fellow man.
Aside from these simple, schmaltzy sentiments, the world of seeds is a complicated, multifaceted place these days. And that applies to both the planters and the sellers.
"The last couple years have been challenging in the seed business, and farmers are extremely challenged," says Tony Minnichsoffer, communications manager for Syngenta Seeds Inc., based in Golden Valley, Minn. After a series of corporate mergers, Syngenta continues to market corn hybrids, as well as soybean, alfalfa and sunflower seed under the NK trademark - a brand that has been around since 1884.
The specific challenges today are no secret. Low commodity prices are compounded by increased production costs. Fuel, nitrogen and irrigation costs are rising steadily. And since 1999, biotechnology has a disapproval factor to deal with.
So what goods, services and philosophies are some of the top seed companies showcasing this spring to help growers cope with all of these challenges?
PIONEER HI-BRED INTERNATIONAL
"This season we are offering more than 25 new corn hybrids and 23 new soybean varieties," says Jerry Harrington, sales public relations manager for Pioneer Hi-Bred International Inc., Johnston, Iowa. "That means more choices and more available traits for growers."
Founded in 1926, Pioneer offers growers throughout North America more than 200 corn hybrids and more than 100 soybean varieties for 2001 planting. This year, the firm has more soybean varieties that provide resistance to soybean cyst nematode and brown stem rot.
For the 2000 growing season, Pioneer launched a sales program called $ruChoice, which offers deferred payments to farmers on seed purchases that also could be expanded to include select crop protection products at 3 points below the prime interest rate.
Pioneer also is continuing a fee-based planter calibration program called MeterMax, which it introduced about two years ago. Select Pioneer sales reps have purchased the MeterMax system from Precision Planting, Tremont, Ill., to help customers properly calibrate planters for evenly spaced planting rates. The goal is to eliminate "skips" and "doubles."
"Studies weíve conducted have shown that this can increase yields," Harrington says. "Yield is the prime focus of what a farmer looks for in a corn hybrid or soybean variety selection," he says, noting that growers planting Pioneer corn hybrids won 25 of 27 categories in the 2000 National Corn Growers Association Corn Yield Contest.
Selecting production traits for end-use markets wasnít an option in years past, but opportunities will increase in the years ahead, Harrington predicts.
"Growers have more choices than ever before," Harrington says. "They can produce commodity corn for end-use markets, such as high-oil corn for the livestock market and corn with highly extractable starch for the food market, or waxy corn. All of these end-use markets should offer premiums or else the grower wonít grow them."
Selling products and services to corn and soybean producers has become very technical, says Steve Klein, director of sales and marketing for Garst Seed Co., Slater, Iowa. "In order to be successful, we have to be knowledgeable about production practices and technology," Klein points out.
To that end, an important principle for the company is to understand the customerís needs and provide products and services that offer solutions. The Garst mindset is to be market driven, rather than marketing driven, Klein asserts. "We are continually thinking about what the customer wants," he says, "and we develop and implement programs to meet those demands."
That starts in the countryside with sales personnel interacting with growers. "Our growers are looking for performance in products, which includes yield, plant health and standability," Klein says. "They also want service, and we strive to deliver the type of service our customers need."
Growers today are experiencing "information overload" and their time is limited. "If suppliers can provide the information growers are looking for and find valuable, they will have an advantage in the marketplace," Klein says.
Founded in 1930, Garst products include corn, soybean, alfalfa, sorghum and sunflower seed. According to Klein, Garst has increased market share for five consecutive years as a result of product performance and attention to service. Ever mindful of the importance of product branding, Garst merged with AgriPro in 1998. That merger solidified Garstís position with soybeans, Klein says, because of AgriProís established soybean breeding program.
"The whole technology side of our business is really in the forefront this year and is changing the seed business," Klein emphasizes. "Growers have lots of questions about genetically modified crops. Thatís a good thing because having questions shows that our customers want to be as informed as possible before deciding to grow new varieties.
"We havenít seen a backing off in the demand for technology traits, including Bt corn, even in light of the StarLink controversy," Klein adds.
E-commerce is becoming more important as a sales tool, Klein contends. "Right now our customers are not asking to purchase seeds online, but they are looking for more product information and more links to agricultural news sites," he says. "Weíre in the process of developing our e-commerce services. In the future, a certain percentage of growers will want to do business online, and we want to make sure weíre making changes to adapt to the market."
"We consider ourselves an innovation company," Syngentaís Minnichsoffer says. "We were the first to market Bt corn, which was first available in 1995. Commodity prices were good at that time, and corn borer infestations were high. Growers could see the advantage of Bt corn, and that was a plus for our company. Now all of the major seed companies offer Bt technologies."
Soon after Bt was launched, the corn borer problem diminished and grain prices hit the skids. "Everything changed," Minnichsoffer says. "There Has also a lot of activism against biotechnology, which, during the mid-1990s, no one expected. We all thought biotechnology was the answer to all of our prayers, because genetically engineered products contain no chemicals or artificial components. But eventually the protest industry redefined biotech and considered it artificial."
By mid-1999, growers became concerned about having markets for Bt corn and Roundup Ready soybeans. Toss in European non-tariff trade barriers, and the forecast for U.S. corn and soybean producers is lots of storm clouds on the horizon.
Fortunately, all of the NK Brand Bt corn and Roundup Ready soybean varieties are cleared for all uses in all markets, including Europe and Japan, according to Minnichsoffer.
"In order to be competitive, we provide product service innovations to add value for our customers," he says. "Itís an ongoing challenge, and we want to make sure customers have the choices they need.
"We try to provide most of the elite products, the newest and best genetics, with and without Bt technology," Minnichsoffer continues. "About 70 percent of our corn sales are Bt. Bt is one of the seed industry innovations that was a real blockbuster and still is. We are committed to biotechnology, but we have other innovations that add value to our products."
TruBulk is a Syngenta packaging and delivery system designed to handle large quantities of corn and soybean seeds while maintaining purity. "This program benefits both dealers and growers by reducing labor requirements and increasing flexibility," Minnichsoffer explains.
ProShield technology, introduced in 2000, is an insecticide coating on corn seed that was designed to control root worms, but also is providing the benefit of secondary insect control. This year ProShield is available in all regions of the country.
A third Syngenta innovation, introduced last year, is the addition of a peel-apart bag tag that can be applied to a field sign. "This tag is a small, simple thing, but it helps alert applicators regarding which fields to spray or not to spray, and it could also facilitate identity preservation," Minnichsoffer says.
Syngenta takes a portfolio approach, he adds. "We donít want to focus on just one hot variety in each marketing zone. Rather, we want to offer a selection that provides choices to growers so they can put together a portfolio to balance their needs. We are in tune with their mindset: ĎDonít put all of your eggs in one basket.í"AM
Freelance journalist Linda L. Leake is based in Wilmington, N.C.