This fall growers and retailers have faced a unique combination of natural and man-made challenges that are making seed and planting decisions for the coming year more complex. Perhaps the biggest question of the season: Will there be enough seed for 2013 plantings, especially in light of the drought? Retailers we talked with have been keeping in close touch with suppliers to get the latest word. Fortunately, seed production acreage is under irrigation, so the crop was protected from some of the worse effects of the drought. But dealers are hearing quantities will be tight to “very tight,” at least on the corn side. “The challenge will be how many of the priority hybrids or varieties we can actually deliver,” says Rob Mitchell, director of national seed sales and marketing, J.R. Simplot, Boise, ID.
Indeed, Jeff Eggleston, general manager of Hintzsche Fertilizer, Maple Park, IL, says that because of supply problems the past few years, a majority of his customers’ orders have been altered at least once before seed ever gets delivered. Trying to place seed for a grower, then not have availability means going back to make substitutions, he says. It’s a time-consuming practice he dislikes intensely.
In addition to supply issues, some retailers were wondering about the quality of the seed, pointing to the impact of the summer’s excessive heat during pollination. “We’re anticipating a smaller seed size and hopefully we’re not going to see reduced germs of any kind,” says Mitchell.
And a startling trend emerged across the board as CropLife® talked with dealers: Growers are placing orders up to two months earlier than usual in order to get coveted varieties and quantities. In fact, customers might be over-ordering slightly this year as well, trying to get extra of what they really want because they know they’ll probably get cut, says Eggleston.
What products did growers go for in 2012 and how did crops do? Lane Mielke, sales manager at North Central Famers Elevator, Ipswich, SD, says customers particularly liked VT Double PRO seed — especially the Refuge-in-Bag product — and were willing to pay a premium for the convenience.
Mielke was surprised at how well the newer varieties performed in general this year. “We raised a heck of a good crop on limited rainfall,” he says. “Producers raised a good yield and are getting a good price for their commodity. Everybody has a smile on their face at this point.”
Kevin Mainord, sales manager for MRM Ag Services, East Prairie, MO, saw a big demand for LibertyLink (LL) products in his area this year due to glyphosate-resistant pigweed issues. The problem began six years ago and has progressively gotten worse across the state. When customers first started using LL soybeans two years ago, they were concerned about a yield drag, compared to Roundup Ready systems. But most are now seeing LL yields that are just as good, Mainord reports.
Many retailers, including Chris Klumpp, seed product line manager at Ag Partners, Albert City, IA, reported customers went for the new RoundUp Ready 2 Yield soybeans and said they got “very good performance.”
Several dealers we talked with are waiting for dicamba-tolerant soybeans as a means to combat glyphosate-tolerant weeds. But the possible volatility and off-target movement of dicamba products and subsequent damage to sensitive crops like cotton makes them cautious.
Michael Hensgens, business manager of G&H Seed Co., Crowley, LA, says dicamba and Roundup Ready 2 soybeans should raise the yield bar and increase weed control in the crop, aiding in stewardship and weed resistance prevention.
One eagerly awaited trait continues to be drought tolerance, and 2012 certainly was a good year to test the newly launched genetics. This season J.R. Simplot, which always faces plenty of water-challenged locations west of the Rockies, trialed and retailed some of the hybrids, created both by conventional breeding and genetic modifications. Mitchell says it’s too early to tell if the seed delivered. “The harvest is going on and data points are still coming in,” he says, though he adds that the company will also be watching other industry and university results as well.
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Several retailers reported that planting intentions for 2013 so far are similar to 2012, with many still “bullish” on corn acres. Mitchell projects the Gulf region may see some corn acres replace cotton. “I think it’s going to be another big year on corn, but let’s just hope we get some rainfall this fall and winter, get some recharge going.”
Dealers said they are hearing projections of 96 to 100 million acres of corn for 2013, but those impacted most by the drought in Indiana, Illinois and Iowa question the figure.
“I don’t know how we’re going to hit that,” says Dan Mogged, vice president of Van Horn, Cerro Gordo, IL. He reports dismal performance by some hybrids for the past two years in corn-on-corn fields in the region. Those kinds of results make it very difficult for his sales force to recommend one product over another to customers for 2013. He says growers have been “slammed” in these rotations, investing in pricey inputs only to get disappointing yields — 50 to 80 bushels per acre less than fields where corn followed soybeans. Mogged says he could see at least 5% of this year’s corn acres shift back to soybeans.
All Over The Road
Hintzsche’s Eggleston, also in Illinois, says planting intentions are “all over the board right now,” with some growers leaning toward more soybeans. “I would say if we don’t get some decent snowfall and rain this fall and next spring, growers may lean towards beans. Our subsoil moisture is pretty depleted.”
MRM’s Mainord thinks that if bean prices and fertilizer prices go up, “that will tend to trim the corn acres.”
Dealers are working to make seed sales a good experience for growers. A key is the value of their sales agronomists in building relationships with and conveying seed information to customers. Seed staff face a steep learning curve, especially considering the sheer number of new varieties hitting the market every year. The life cycle of a hybrid has gone down to two or three years, from five years a decade ago.
North Central Farmers Elevator has seen the benefits of ongoing customer communication. As word has spread about the company’s products and service, Mielke has had to add 18 new members to his sales force over just the past five years.
Part of seed management is pricing, including finding the rate that will bring acceptable margins. While customers may complain about seed costs, G&H Seed’s Hensgens emphasizes margins do mean value for the grower. “A farmer is the best judge of value,” he says. “If he trusts his crop advisor, he orders products with their appropriate margins providing the crop advisor service. If a grower uses a consultant, then he pays the consultant and shops price first, then compares the other services offered by the dealer. Custom application services greatly impact those decisions.”
Hensgens would say the value of traits was acceptable to growers until a “value shift” took place a few years ago — when the price of seed went up in exchange for lower herbicide prices caused by generic chemical introductions and patent expirations.
In Missouri, MRM’s Mainord sells to customers who still use public varieties. Many of the elevators in his area pay a 60-cent premium for non-GMO soybeans, which his growers have found perform very well. “In fact, most producers who grow traditional varieties will tell you they perform as well as anything that’s on the market,” he says. A sobering thought considering non-GMO seed costs $18 to $19 per bag, vs. $52 to $65 for traited seed.
A number of dealers commented that while agriculture continues to fare well compared to other industries in the current economy, they and their customers are uneasy. The latest Farm Bill has yet to be finalized, and at presstime dealers contemplated how the looming elections could greatly affect the bill’s outcome. “One year down the road, how will farm programs and crop insurance look?” asks Mogged.
Mainord thinks growers are being a little cautious in their buying decisions, even with high commodity prices. One reason in particular: How will tax structures look after the elections?
“They affect us tremendously,” he says. “Even though we handle a lot of money, sometimes we don’t get to keep a lot of it.”