CropLife 100 Seed: Can the Category Connect Four?

CropLife 100 Seed: Can the Category Connect Four?

Following the data collected in the 2017 CropLife 100 survey of the nation’s top ag retailers, one question remains for the seed category — can it grow for a fourth year in a row?

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Throughout much of the 2010s, the seed category had been steadily growing, gaining anywhere from 1% to 4% annually. During this time, the market share for the sector compared with all other crop inputs/services among CropLife 100 retailers stayed relatively steady as well, fluctuating between 12% and 15%.

Then, during the 2014-15 timeframe, the seed category experienced a slight downturn. When 2015 closed, the sector had seen its sales drop from almost $4.5 billion in 2014 to just a hair over $4.3 billion.

Since then, however, the seed category has gained back all of this lost revenue, and then some. According to the data gathered in the 2017 CropLife 100 survey, ag retailers saw their seed sales grow better than 1%, topping out at just slightly under $4.7 billion. Market share for the sector now stands at 16%, the same mark it held during the 2016 growing season.

Based upon the data, biotech seeds continues to outpace traditional seeds in terms of seed category growth among CropLife 100 retailers. For the year, 46% of respondents indicated their biotech seed sales increased 1% to more than 5% for 2017. In comparison, only 31% of CropLife 100 retailers saw their traditional seed sales improve by these same percentages. Still, the traditional seed segment can claim a lower sales loss rate vs. biotech seeds. In this area, biotech seed sales were down 1% to more than 5% for 24% of CropLife 100 retailers in 2017. For traditional seed, this percentage was only 14%.

A Fourth Growth Year?

So with a good performance in 2017 under its belt, can the seed category connect enough with grower-customers to have a fourth year of revenue gains in 2018? Given market conditions, the answer to this question would appear to be “yes.”

In particular, say market watchers, all the merger movement among crop protection/seed companies will likely mean several new initiatives being launched to grow seed sales. In fact, Syngenta — fresh off its merger with ChemChina — has already stated that the company plans to increase the spending on its seed business in an attempt to grow its overall market share vs. leaders DowDupont (Pioneer) and Monsanto. In addition, BASF has now entered the seed business with its purchase of various seed assets from Bayer CropScience (as the latter prepares to merge its business with Monsanto). Being completely new to the seed game with such brands as LibertyLink, market analysts predict BASF will increase marketing these seed lines to its customers in an effort to make a “big market splash.”

Put together, all these factors would seem to set the stage for the seed category to have another winning year in 2018 for CropLife 100 retailers.