CropLife 100: The Return Of The Need For Seed

For most categories within the CropLife 100, 2013 was a better-than-expected year in terms of sales growth. However, for the seed category, this year marked a return to what market watchers would term “the good old days.”

To appreciate this statement more fully, let’s take a brief look back at past 13 years. At the beginning of the 21st century, the seed category was a definite growth curve. During the 2000 CropLife 100 annual survey of the nation’s top retailers, respondents reported that their overall seed sales were just over the $800 million mark. But even with this sales figure under its belt, the seed category only represented less than 8% of all crop input/service revenues at the leading ag retail organizations. Still, sales were on the upswing and the future for the seed category looked bright.

And it was. Over the next decade, the total revenues for the seed category within the CropLife 100 steadily grew. By the time the 2009 CropLife 100 survey was completed, the seed category had increased its overall sales volume to $2.6 billion. Market share was almost double its 2000 mark at 13%. More significantly in 2009, the rest of the crop inputs and services that made up the CropLife 100 sales were down or flat. “Looking at the bigger picture, the success of seed in 2009 effectively cancelled out sales losses in a few other segments,” said the CropLife 100 write-up from the December 2009 edition.

But as the old saying goes, “all good things come to an end.” For the seed category, the first hints of a revenue slowdown appeared during the 2011. Although seed sales grew 13% for the year to $3.4 billion, this percentage increase didn’t keep pace with that for the overall marketplace. As a consequence, the seed category witnessed its first market share drop among crop inputs/services, from 15% to 14%.

This slow growth rate continued to plague the seed category during the 2012 calendar year as well. Last year, seed revenue at the nation’s top ag retailers increased only 6%, topping $3.6 billion. And again, as in 2011, the seed category ended the year losing another 1% in market share, dropping to 13%.

Happy Days Are Here Again

In 2013, the seed category had a much better year, to say the least. According to CropLife 100 survey respondents, their seed revenues grew from $3.6 billion in 2012 to slightly more than $4 billion. This 11% year-over-year increase led all crop input/service categories in terms of market growth. Better still, the seed category grew fast enough vs. the rest of the marketplace to re-gain 1% market share to 14%.

Among the three components that make up the seed category — traditional seed, biotech seed and seed treatment — seed treatment was the fastest-growing during 2013. According to 78% of survey respondents, their seed treatment sales increased 1% to more than 5% for the year compared with 2012. An additional 15% said their seed treatment revenue was the same as during the prior year. Only 7% of respondents reported that their seed treatment numbers had dropped in 2013.

Biotech seed also performed well in 2013 for CropLife 100 ag retailers. According to the survey, 66% of respondents witnessed sales increases of 1% to more than 5% in this sector, with another 23% reporting their sales in this area were flat. Only 11% said their biotech seed revenues had dropped in 2013.

Even traditional seed performed better than in recent years during 2013. According to 35% of CropLife 100 retailers, their traditional seed sales increased 1% to more than 5% for the year. This marked a significant improvement from 2012, when only 29% of respondents reported a sales gain in this sector.

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