Seed is a 12-month sell — it takes time. Ag retailers were even shorter on time in the past year as they contended with a barrage of supply chain struggles, inflation, and personnel issues.
Prevent plant acres also contributed to difficulties in the seed segment. U.S. farmers reported being unable to plant on nearly 6.4 million acres, compared with just 2.1 million acres in 2021.
Seed fell in market share among ag retailers from 14% to 11% for ’22, according to the CropLife 100 survey.
According to results from the 2022 CropLife 100 survey, ag retailers’ market share for the seed segment among inputs will drop from 14% to 11% in 2022. Total seed sales for the year will be flat from 2021 at $5 billion. This contrasts to stronger sales from other input segments like fertilizer, which came in at $23.9 billion, up from $15.3 billion in 2021, and crop protection, which climbed to $15 billion from $12.9 billion in 2021, according to the survey.
“We saw a lot of folks in retail wearing a lot of hats, and they always do,” Kurt Curry, Area Business Development Manager with Brevant Seeds, says. “They had to resell over and over again, just because of the fact that prices were changing, so they were doing two to three times the work to get the same amount of business.”
At the same time, most companies we interviewed expressed that seed will only grow in importance for the retailer going forward. “There is no lack of opportunity for retail on seed,” Curry says. “Most have a plan to grow because they are already working with growers on their other input costs. They’ve got a real commitment to grow the seed business.”
“Seed is a higher-value input and I think retail is in a great position to maximize that,” says Andy Montgomery, Commercial Unit Head, NK Seeds. “Putting in the time and attention needed to maintain those seed relationships is really important — there is more competition for that seed acre than there is for the crop nutrient and herbicide business.”
At CHS, the nation’s sixth-largest ag retailer in the CropLife 100 survey, corn and soybean sales were off on prevent plant acres in the heavily hit Dakotas and Minnesota, where it derives the majority its seed sales. However, once the corn acre was lost due to timing, growers didn’t automatically switch to soybeans in that market, often opting for hotter-value crops like sunflower and canola, according to Travis Kauth, Senior Product Manager, Seed.
“Anheuser-Busch was very aggressive on barley acres,” he adds, noting that when all was said and done, CHS total seed sales were up just over 1%.
That industry catchphrase — “lead with seed” — is critically important to understand, Todd Pester, Corn and Soybean Lead for Nutrien Ag Solutions, says.
“I think what created a lot of anxiety last year was the unavailability of some of the inputs like glyphosate or glufosinate. People were planning to go early. It’s changed the mindset even going into 2023,” he tells CropLife®, “although we expect a lot of the supply chain issues to be much better than the previous year.”
Nutrien is focused on ensuring that growers who purchase its seed have access to inputs to help manage weeds in 2023. “We’re having success in securing early seed orders for the folks who are really interested in getting what they want and getting it locked down.” Pester adds: “The longer you are waiting into November or December to make a hybrid or variety selection, chances are you won’t get that first choice.”
Every grower needs to understand their operation and yield potential for each field to make the best selections that are going to maximize production and profits based on commodity prices and other input costs, he stresses. “Still continue to watch commodity prices as you’re making crop and fertilizer decisions even this fall,” he says.
Pester says he’s hearing that seed costs will increase another 10% to 15% for 2023.
In addition, seed decisions continue to be pushed earlier and earlier, not necessarily by desire on the part of growers.
“We’ve always believed we’ve got to be on farm first. Certainly, the race to the farm is faster and faster,” CHS’ Kauth says.
“For crop protection and fertilizer, the grower seems to be stepping up because they have to, in order to secure the product they need,” Terry Herzig, CHS Vice President of Retail Sales, adds. “I’m sure that’s helping on the seed side as well.”
Syngenta’s NK Seeds, one of the fastest-growing brands, which has set itself apart through its proprietary soybean genetics, engaged growers in July and August preharvest on their ’23 seed decisions.
“It’s paid really big dividends,” NK Seeds’ Montgomery tells CropLife. “As an industry, we have to be able to move up how and when we talk to growers about seed. Retail sellers that do that are winning.
“It’s a huge opportunity for retail to cut through the noise, to be able to offer simple solutions across multiple product lines, multiple genetic sources, and trait options. A single seed brand can’t always do that, but a retailer can offer those solutions in one stop,” Montgomery observes. “Service that follows through — whether it means access to education, knowledge, storage, or in-season deliveries — that’s something a local retail partner can deliver that regional brands and other suppliers can’t.”
NK Seeds expects the market ended the ’22 season with around 45% Enlist E3, and that will likely go to 50% to 55% in 2023, says Eric Miller, Soybean Product Marketing Manager. “That dynamic alone has been a big discussion point for ag retailers in their decisions around weed control — having a (soybean) market that’s essentially bifurcated into Enlist E3 and XtendFlex,” he says.
Miller adds: “Soybeans have been complicated in a lot of positive ways because there are choices for farmers now. It’s been an easy button for so many years, and there are a lot of great choices to control weeds and NK has those in our genetics, so it’s been a great run for NK farmers.”
CHS also expects the Enlist E3 platform to pick up, but likely not at the pace it will nationally because of 2,4-D’s ineffectiveness on kochia, prevalent through the Dakotas and moving west of I-29 and north and south. In that geography, Kauth expects XtendFlex soybeans to come back as growers have become more comfortable with glufosinate supply.
Growers should consider their decisions based on the variety and characteristics for the field where the seed is intended to be planted, over a trait-first mindset, Marc Hoobler, Northern Region Agronomy Lead with BASF, says.
“My belief is that all platforms on the market enable good weed control, so we’re trying to take that discussion to the variety level rather than the trait,” he says. BASF has begun collaborating with precision farming outfit Ag Ingenuity Partners to help achieve that goal. The company developed an algorithm based on various field characteristics such as organic matter, slope, CEC, and soil wetness to come up with what it calls a variety profile index, or VPI, which in turn helps BASF agronomists determine where to place varieties and how to manage them. “We have a collaborative mindset and are partnering with retail to deliver solutions farmers need. Keep in mind, BASF is the only major seed company who does not sell outside of retail. We are 100% committed to retail with the Xitavo brand.”
“That’s one advantage we have right now from a testing standpoint — we can provide more placement information to growers about our varieties than anyone else can about their varieties,” Hoobler adds. “Knowledge becomes a point of differentiation and gives us confidence that we’re providing the right seed for the right acre.”
CHS’ Kauth acknowledges the challenges growers have from pests and disease to harvest schedule to varietal selection. “Someone that is going to walk them through that I think is really making the difference,” he says. “A lot of people are asking for their business. To separate yourself a little bit, we really strive to be that advisory role.”
Brevant launched in the U.S. in 2020 exclusively through the retail channel, an approach the company says has gone “tremendously well.”
That desire for service, and more choice, is one of the reasons Brevant launched in the U.S. exclusively to the retail channel in 2020.
“Corteva sees (Brevant) as one of largest growth opportunities in the business just because that space of retail and we see people moving in that direction. We’ve set some pretty lofty goals but we’ve been moving through them and hitting targets all along the way,” Curry says.
In many businesses, the ratio is four to one sales to agronomy, but Brevant built its business the opposite direction offering more local boots on the ground to offer agronomic support and product knowledge for retail customers. The approach has worked “tremendously well,” he explains.
“We want to give customers the opportunity to buy where they want. Obviously, we see a huge value in retail, because they are the local expert. Ag is getting more complicated every year as far as the trait offering, the herbicide programs, and diseases we’re seeing — tar spot blew up in the last year or two. Retailers are the local expert and understands the business holistically,” he adds. “In a lot of cases, it’s not a relationship of a year or two — it’s a relationship of generations. The retailer inherently understands that farm and is able to offer the best products for that individual.”
Jackie Pucci is Senior Editor for CropLife, PrecisionTech Ag Professional, and AgriBusiness Global. See all author stories here.
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