Retailers: A Look Inside Seed
Retailers discuss the challenges and opportunities of making seed an important part of their overall business strategy.
November 17, 2010
Grower-customers have a different mindset when it comes to seed. They leave the minutiae of crop protection and fertilizer to their retailer, but they check every aspect of seed and seed trial results themselves, according to several retailers we spoke to for the State of the Industry report.
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Growers also have a number of other seed sources — manufacturers, wholesalers, Internet brokers, the guy out of his garage. In times of economic crisis, these become more appealing as growers look for deals and take on a “do-it-myself” viewpoint. Seed companies that employ direct sales are shooting themselves in the foot, says one retailer.
Richard Warner, president of Warner Fertilizer, Somerset, KY, stresses the retailer’s role in seed sales and service. “I think seed companies need that dealer who’s knowledgeable about their products and provides the service that’s needed.”
Another frustration for retailers is seed pricing. “It’s very hard to know your margin, and I cannot tell you what a bag of seed corn costs,” says Cleve Anderson, agronomy division manager for Frenchman Valley Co-op, Imperial, NE. “The manufacturers and seed companies won’t disclose that information, so we’re going just on what they tell us.”
The major seed companies will “pull the strings more and more and tie fertilizer, seed, and chemical together and get bigger and bigger,” says Tom Fullenkamp, CEO of Golden Furrow Fertilizer in Eldon, IA.
Tim McArdle, vice president and general manager for Brandt Consolidated, Springfield, IL, agrees: “We believe you can lead with seed. Companies are going to bring out new traits in the next few years that are more output traits, and so it’s hard to even sell a farmer crop protection or fertilizer unless you KNOW what seed variety he’s going to plant and what potential it has.”