Value First

After a couple of particularly strong years in almost every segment of U.S. agriculture, 2006 is not shaping up as a “year to remember” in crop protection. While unfavorable weather took its toll on crops in many regions domestically this season, positive weather events in key growing areas around the world has kept a lot of chemistry in storage and off the field.

This season aside, the big six research-based crop protection manufacturers were able to take advantage of the recent upward trend by working to solidify their positions in the market and set a clear course forward. And, it has meant reinforcing their commitment to partner with the distribution channel.

There is a lot more static in that relationship these days – the “generitization” of crop protection products, the growing impact of biotech traits, the consolidation of agriculture at all levels, and the increasing impact of the global economy test the strength of the connection. But these factors are also providing opportunities for manufacturers to differentiate themselves strategically in the market.

Seed, Biotech Bonanza

Each of the six basic manufacturers have some measure of position in the seed market, from proprietary traits and germplasm to seed treatments. The inevitable result is that seed is inextricably linked to the sales and marketing efforts, as well as the future outlook, for the basics.

In row crop growing regions, retailers have been learning to sell seed and traits for nearly a decade. Today, retailers are on the cusp of capitalizing on the biotech movement, says Travis Dickinson, vice president of U.S. Marketing, Syngenta Crop Protection.

“Retailers have evolved quite rapidly, and embraced biotechnology at a pace that many of us would not have envisioned even five years ago,” says Dickinson. “As we look at ways to deliver value-added combinations of crop protection and seed, alongside fertility programs and elite germplasm and biotech traits, I think we as an industry are only beginning to address bringing the kind of full-service offerings to customers that pull all those elements together.”

The “usability” of biotechnology from the retailer’s perspective is making a big difference, as traits are mixed and matched more readily today, and can be delivered using top-performing germplasm based on regional research and local demand. 

In recent years, many local seed brands have been purchased by basic manufacturers and the company names retained, providing added outlets for traits and, in many cases, alternative brands for retailers to carry.

And joint ventures and corporate strategies designed to build value and potential profitability for the channel have been rolled out as well. One prominent example is GreenLeaf Genetics, a joint venture between DuPont’s Pioneer Hi-Bred and Syngenta.

“Regional seed companies, and therefore most of our retailer partners, will have access to proprietary traits and select germplasm from Pioneer and Syngenta through the GreenLeaf Genetics venture,” says John Chrosniak, regional business director, DuPont Crop Protection North America. “I believe that our retail partners will have every opportunity to share and prosper in the value that can be created in licensed germplasm and traits, albiet in a different model.”

Stan Howell, vice president, North American trade area, Dow AgroSciences, says that through its Mycogen brand the company has made huge strides in matching up top hybrids and germplasm with traits that growers are demanding. “We’re able to offer retailers the ability to take advantage of the shift in value from ag chem to seeds and traits through our Mycogen seed corn and our Herculex insect protection in-plant traits,” says Howell. More than 50 new hybrids will be introduced this year.

A company with an enormous stake in the biotech side of ag is Monsanto, which claims to invest $1 million per day in its seed and trait R&D program and with biotech sales that dwarf its crop protection business. Retailer seed aptitude is a huge concern, and Jon Nienas, channel strategy manager, says retail training is critical.

“One of the biggest changes we’ve seen is that a lot of retailers have made the transition from having a major portion of their business in chemistry to now having it in seeds,” says Nienas. “We have provided and continue to provide training, help, and guidance to help our retailer/dealer partners become good seed sellers.”

That includes computer-based training on seeds and traits as well as programs like Monsanto‘s DEKALB/Asgrow University, says Nienas. “We’ve tried to bring dealers into the seed business to show them how to become a knowledgeable resource for their customers, provide value, and in turn capitalize on a new opportunity.”

It’s an investment in today and the future, when Monsanto plans to bring improved input and new output traits on the table.

Price Vs. Value

With the onslaught of generic options hitting the marketplace in recent years, and the virtually complete transparency of product pricing, retailers are being pushed to make some tough choices about what they buy and who they buy it from.

For Dave Coppess, president of Heartland Coop, West Des Moines, IA, price transparency is really the issue. “We are not getting pressure from growers to supply generics as such,” says Coppess. “We are getting pressure to be price competitive. In some cases, that can only be achieved by handling a private label or generic compound that may not have the cost of R&D, technical support, complaint handling, etc. that branded suppliers incur on behalf of the industry.

“We think it is important to manage the balance between the branded and generics,” he continues. For its part, Heartland is “not looking to disrupt this balance and lose the value-added services we currently enjoy.”

Recent threats to the systems growers and retailers rely on most, notably glyphosate resistance and Asian soybean rust, have served to reinforce the need for ongoing research.

In 2006, Bayer CropScience released 11 new products that were designed to fulfill specific regional needs, something only possible through the combination of a strong portfolio and research investment, says Dr. Geoff Kneen, vice president of marketing and portfolio management.

“This is the kind of thing we mean when we talk about our commitment to innovation,” says Kneen. “As a basic manufacturer, we must bring new innovations to this market. We won’t introduce 11 new products every year, but we will continue to keep up the pace.”

The basics are also investing heavily in programs to improve the retailer’s own business. Andy Lee, director, business operations for U.S. crops at BASF, notes that consolidation of growers and the distribution channel necessitates that manfacturers focus laser-like on working with the channel to minimize wasted resources.

Successful retailers and manufacturers will “work in partnership to deliver new technology most cost effectively to the grower,” says Lee. “BASF works with the channel to deliver new technology to the grower to meet their needs in an ever changing market.”

Syngenta’s Dickinson points to its “Learning Centers” as evidence of its commitment to retailer partnering. These model farms demonstrate the interplay of the various technologies and provide some real-world context to what Syngenta sales reps present to retailers.

Partnerships That Work

Each of the big six basic manufacturers expressed a desire to work with the channel, but the best retail partners will be those who can understand and deliver a value-based message. 

“We are looking for our company to be profitable and grow, for the channel to be profitable and grow, and together be able to add value and profitability to the grower,” says DuPont’s Chrosniak. “Trying to squeeze profit out of the channel to put in our pockets is not a win, and likewise, leveraging for margins but not using them to create value for growers it’s not a win. These partnerships are not easy, but I think ultimately that is what trying to do. It’s the only way we can survive and thrive.”

Building that value is more possible than ever because the retailer is in a position to consolidate the myriad technologies for growers, says Dickinson.
“The retailer’s fundamental role is as a consolidator of technology, information, and services to growers, and that will continue,” he says.
Monsanto’s Nienans says that to sell value, retailers need to choose the direction and commit to it.

“A retailer has to decide who they’re going to be, and then be it,” says Nienas. “In other words, they need to decide, ‘Who are my customers?’ and ‘what kind of services do they need?’ Once they have a business model decided based upon their answers, they need to stick to it.”

The biggest problem, says Nienas, is the retailer who tries to sell full service to growers that don’t want it, which ends up being a high-cost, low-value proposition.

“There are a lot of good, tough dealers out there because of consolidation and competition.” he adds “They have a real square vision of who they want to be and they don’t deviate because deviations are where they start to lose.”

Leave a Reply

Management Stories
ManagementMACA 2014: The State Of The Agricultural Industry, And Then Some
October 9, 2014
The trade association’s annual gathering featured speakers from across agriculture and beyond. Read More
StewardshipA Multi-Layered Approach To Water Quality
October 6, 2014
Illinois event highlights research and technology designed to better monitor and improve water quality — and the benefits of cooperative, coordinated effort. Read More
StewardshipMichigan Agriculture Leaders On Toledo Water Ban: We Want To Be Part Of The Conversation
August 8, 2014
Leaders of Michigan agricultural organizations said Thursday that the government should not have a “knee-jerk reaction” based on last weekend’s water ban in Toledo due to fertilizer run-off in Lake Erie. Read More
ManagementRussia Bans U.S. And EU Ag Product Imports In Ukraine Sanctions Battle
August 7, 2014
Russian President Vladimir Putin has banned the import of agricultural goods from countries that have imposed sanctions on Russia. Read More
Top 100 Articles
CropLife 100BRANDT Commemorates National Ag Day
March 20, 2015
The Illinois agriculture community gathered at BRANDT global headquarters on March 18 to celebrate National Ag Day behind this year's theme Sustaining Future Generations. Read More
Wheat Growers, North Central Farmers Elevator Pursue Merger
CropLife 100Wheat Growers, North Central Farmers Elevator Pursue Merger
March 3, 2015
Two CropLife 100 retailers — South Dakota Wheat Growers (ranked No. 11) and North Central Farmers Elevator (No. 19) — have entered into a Letter of Intent to unify the two companies into a newly named cooperative. Read More
Growmark Group
CropLife 100GROWMARK In 2015: Back, To The Future
March 2, 2015
The nation’s third largest ag retail organization is simultaneously moving forward while remembering its past. Read More
CropLife 100Pinnacle Expands Sanders Brand In The South
February 27, 2015
Pinnacle has acquired Hopkins Seed and Chemical in Qulin, MO, which expands the company's Sanders brand to nine Southern states. Read More
CropLife 100Pinnacle Launches New Providence Agriculture Location In Indiana
February 27, 2015
Pinnacle Agriculture Holdings — ranked No. 6 on the CropLife 100 — has established a new retail location in New Castle, IN, which will operate as part of Pinnacle's Providence Agriculture brand. Read More
Carl Casale of CHS
CropLife 100Cooperative CHS Returns $518 Million To Owners
February 23, 2015
The 2015 cash return to owners is based on CHS net income of $1.1 billion, the company's second highest on record. Read More
Latest News
HerbicidesNew EPA Glyphosate Restrictions Leaked To Reuters
April 1, 2015
U.S. regulators will put new restrictions on the world’s most widely used herbicide to help address the rapid expansion of Read More
FMC 3Rive 3D
Seed/BiotechFMC’s 3RIVE 3D Turns Heads
April 1, 2015
As winter trade shows tend to go, Commodity Classic tends to be a pretty big deal. You’ve got all the Read More
Nachurs Alpine Solutions, Liquid fertilizer, micronutrients, facility
MicronutrientsYara Launching YaraVita Procote Liquid Micronutrients
March 31, 2015
Yara North America, Inc. broadens its fertilizer coating offerings with the introduction of YaraVita Procote, oil-based micronutrient liquid suspensions that Read More
Industry NewsINCOTEC Board Member To Retire
March 31, 2015
JanWillem Breukink has decided to retire from his position on INCOTEC’s Board of Directors, effective April 1, 2015. This was Read More
MicronutrientsAgrium Deals Michigan Micronutrient Facility To Cameron…
March 31, 2015
Cameron Chemicals, Inc. has announced today that it has entered into a definitive agreement with Agrium Inc. to purchase the Read More
Industry NewsH.J. Baker Creates, Fills New Pacific Northwest Sales P…
March 30, 2015
H.J. Baker announced today that Gary Bingham has joined the company’s Crop Performance Division to further deepen its sales portfolio Read More
Algal blooms
StewardshipStudy: Algae From Clogged Waterways Could Be Used As Bi…
March 30, 2015
Water-borne algal blooms from farm fertilizer runoff can destroy aquatic life and clog rivers and lakes, but scientists are reporting Read More
Young corn plants
Stewardship4R Nutrient Stewardship Summit Coming To DC
March 30, 2015
The annual 4R Nutrient Stewardship Summit will be held on May 12 in Washington DC. The summit will include a full Read More
FungicidesSyngenta Suing Willowood Over Azoxystrobin Fungicide
March 27, 2015
Syngenta announced today that it has sued agrochemical maker Willowood, LLC., for patent and copyright infringement, as well as unfair Read More
ManagementRetail Week: The Future Of Mycogen Seeds; The 4Rs At Na…
March 27, 2015
Editors Eric Sfiligoj and Matt Hopkins discuss recent trips, including a look at the future of Mycogen Seeds at Dow Read More
Eric SfiligojMonsanto Hears The WHO
March 27, 2015
Another challenge to the safety of glyphosate, and the responses from supporters and opponents, calls to mind a classic Dr. Seuss story. Read More
Industry NewsMonty’s Plant Food Expands Sales Team
March 27, 2015
Monty’s Plant Food Company, a leader in natural soil enhancement and  plant fertility products, has hired Andrew Bullock as a Read More
Crop InputsSyngenta Louisiana Plant Poised For 2015 Production
March 26, 2015
As the 2015 planting season gets underway, growers across the country will need crop protection products to combat pests and Read More
Lake Erie Nutrient Stewardship
LegislationOhio Lawmakers Finalize Phosphorus Restrictions
March 25, 2015
State lawmakers on Wednesday finalized new rules designed to curb toxic algal blooms on Lake Erie, calling the regulations a major step forward in addressing the problem. Read More
Spreaders17 Fertilizer Spreaders For 2015
March 25, 2015
Manufacturers shoot for versatility and accuracy in this year's crop of fertilizer spreaders. Read More
Industry NewsMonty’s Hires Mid-South Product Consultant
March 25, 2015
Monty's Plant Food Co. has hired Matt Woodring as a Product Consultant for portions of Central Kentucky and Tennessee.    Read More
StewardshipMapShots Integrates With DriftWatch
March 23, 2015
Growers and agricultural providers using AgStudio FARM and AgStudio PRO can now view vital information about specialty crops and apiaries through a recent integration with the DriftWatch Specialty Crop Site Registry from FieldWatch, Inc. Read More
Crop InputsWorld Health Organization Report Contradicts Scientific…
March 23, 2015
A new report from the World Health Organization has classified glyphosate with a “2A” rating as a probable carcinogen, a Read More