Down To A Seed Science
Cutting-edge genetics and new planting technologies can boost seed sales, though they come at a real cost to dealers.
October 24, 2011
Many a dealer appreciates the biology and technology used to engineer a blow-out harvest for grower customers. But as the world of two yield enhancers in particular — seed genetics and now, planting equipment — grows more complex, so the price tag rises for staying savvy.
In fact, dealers need to be experts in seed, soil, nutrient, and pest science to be the go-to suppliers for their farmers.
MaxYield Cooperative, West Bend, IA, has invested five years and lots of capital to create an extensive database of hybrid/variety performance. The company runs three major yield plots in the same area every year plus watches acreage on three cooperating farmers' fields. It uses information gained in its trademarked SciMax Solutions program.
"We're very heavy into research," says Larry Arndt, agronomy/sales and marketing team leader at MaxYield. "But R&D is not cheap. If it was reasonable, everyone would do it."
Ag Partners, Albert City, IA, has created a new system for helping growers evaluate varieties. The InSite/CDM (Crop Data Management) program creates "learning blocks" within certain farms that enable a grower to test the affects of higher populations, higher fertilizer application, and the like in the real world. This program, coupled with sales agronomist expertise, is helping place the right seed on the right acre, says Brent Low, vice president of sales and marketing.
In fact, in 2012 Ag Partners will launch a very aggressive R&D project, the first of its kind in northwest Iowa. This project coupled with its "top secret blue print will have great benefit to our farmer customers and the industry alike," says Low.
Arndt is a big supporter of planting "the right seed in the right place." But he believes the phrase is overused by some in the industry. He notes that one seed company advertises the same philosophy but has no database to back up its seed placement recommendations.
Scott Coon, director of procurement and marketing with West Central Cooperative, Ralston, IA, has a different take on test plots. "They're not as important as they were in the past," he says. "They're a good way to feature new products that are in short supply, but with yield monitors in almost every combine, growers already have a lot of the information they need to make a decision."
Sweetening A Sale
Science has also yielded profit-generators beyond the seed product itself. For instance, West Central Coop made a decisive move recently to grow sales with soybean enhancements. "We've been very aggressive with bulk soybeans and downstream treating of soybeans," says Coon. The company now treats 85% of the soybeans it sells.
"Downstream treatment is the only logical way this works with soybeans," he adds. "You need to have a just-in-time system to minimize the number of treated units that do not make it into the ground."
The coop also has a unique advantage of conditioning soybeans for one of its largest vendors. Coon adds that management would like to pursue even more conditioning opportunities as well as work with seed companies for some exclusivity on products.
More dealers are making seed recommendations for variable-rate planting, a science in itself. MaxYield Coop is one of the first dealers its region to offer the service. Says Arndt: "It's an area of our business that's exploding — and we charge for it." His team creates population prescriptions based on soil type, past yield history, seed hybrid/variety selection, tillage, and more.
Ag Partners has expanded its technical support of precision ag equipment and now has two fulltime precision ag technicians to help its expanding customer base. Low says this is a service that differentiates the company in the marketplace and helps expand its agronomy offering.
In general, seed science expertise at dealerships varies, with some companies investing heavily in staff. MaxYield Coop has three dedicated seed specialists, each with a specific list of customers to help. "This actually means more to the clients than to our company," says Arndt.
West Central Coop calls upon its young field marketers to enhance sales by returning to their home areas to pursue "a number of built-in contacts," says Coon.
Looking ahead, dealers were excited about a number of the newest product offerings, including soybeans resistant to rust and to HPPD-inhibitor herbicides. Then there are soybeans with the AMS (Aphid Management System) and RR2Y (Roundup Ready 2) trait package promising higher yields. In corn, there are now products for drought tolerance; one engineered to make ethanol production easier; and hybrids possessing both insect and herbicide resistance.
Arndt is not sold on the high-yielding "supercorn" that's being hyped — that will deliver 400 bushels/acre. "We've not even gotten to 300 yet," he says.
He's also cautious about new, higher population rates. He points out that the genetics might offer high rates, but growers need to consider the soil it's placed in, whether there's enough food. "It's a very basic science that needs to be practiced more," he says.
West Central's Coon is worried that the new traits will require multiple pricing zones. "When drought resistance hits the market, will we need to have zones different than our current ones to capture the right value," he wonders.
While improved genetics may sound great, Ag Partners' Low is more concerned about the pace of the seed business and the lifecycle of seed. "Keeping our sales agronomist educated to make sure we are providing the best advice possible will be mission critical," he says.
Arndt laments the amount of "details" behind seed, pointing out the constant improvements that demand different approaches every year. Retailers don't have three to five years to learn a product, as in the past — now, it's more like one to two.
In fact, part of MaxYield Coop's strategy to simplify seed sales has been to decrease its offerings, selling product from just three companies instead of eight. And while Coon appreciates the "really good mix" of traits he's found in the six companies West Central represents, but he, too, would like to streamline that figure down to three.