Seed Grows Upward

Retailers are experiencing increasing success with seed sales, but multi-channel distribution continues to be a major challenge.

Seed sales at the retail outlet continued its forward march in 2010 among CropLife 100 retailers, both in total revenue at $3 billion and as a percentage of revenue at 15%. The 2% increase in percent of revenue over last year is becoming the norm, indicating that successful retailers are gaining more trust with their grower-customers about seed offerings.

There are strategies that have been clearly effective — first and foremost is leading with the seed sale and building recommendations around the seed selection.

“We are a seed placement company,” says Larry Arndt, sales and marketing director at MaxYield Cooperative, West Bend, IA. “I have three seed specialists, and their job is to think about seed and sell the right seed for a field. The placement is all about putting together the right inputs with the right seed. It’s not about discounts; it’s about generating business by presenting solutions.”

The seed-centric strategy has required a full-on commitment of people, resources and investment for retailers who have had some success. At Cooperative Plus, Burlington, WI, an annual educational event surrounding corn agronomics has become a big hit with growers, says Mike Moser, vice president of agronomy. He points to a 20% increase in soybean sales and a 13% increase in corn as evidence of the retailer’s success in winning over grower-customers.

But approach to market is not a cure-all for the competitive issues that still exist throughout the Midwest. “There’s a lot of competition for placement,” says MaxYield’s Arndt. After doing a lot of groundwork building a total program, seedsmen will emerge and offer the grower the seed for a lot less, he laments. “It’s a game that we constantly have to play, and seed companies create some of their own problems with dealers because of it,” Arndt says.

Cooperative Plus’ Moser says he has similar frustrations in Wisconsin, where competition for seed business is hyper-competitive. “Syngenta and Monsanto both have subsidiary lines sold through farmer-dealers, and we compete against them,” he says. “The reality is, the seed sold by a Garst or Golden Harvest dealer and the seed I sell as NK are the very same seed in different bags, but they sell it cheaper because their costs are lower. We are certainly sitting down with them and asking them who they are going to support, and they are trying to work through those issues. They know the problems exist, and we feel our consultative, technical expertise approach is better way to sell seed.”

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2 comments on “Seed Grows Upward

  1. OK, You say revenues of seed sales equal 15%. What you don’t say is how much time those retail, (cooperative) fieldmen are spending on seed, I would guess it’s 70% or more of their time. Sooner or later General Managers are going to realize this. Are all these seed salesmen, seed specialist, fieldmen or whatever you want to call them really paying their way? I think not. I feel the Seed business should be done with local Seed Companies who are the professionals of the industry.

  2. Seems to be a great deal of energy spent arguing about who should sell seed. Truth is, the farmer decides in the end which expert he wants to do business with. You can find great and not so great seedsmen within any organization or dealership no matter the size or variety of offerings presented. Seed battles will be won in the field by the best representatives who truly help the farm revenue grow consistently. That right is earned and should not be simply granted to one entity over another based on any single business model. As margins shrink, the best will be left standing no matter the kind of storefront it is.

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