Quest For Seed Dominance

The quest for seed market share among manufacturers is every bit as bruising as the classic battles that Coca-Cola and Pepsi have waged over the years. And the 2011 season is set up to be a real tooth-and-nail war for market share. Sano Shimoda, president of BioScience Securities, an ag biotechnology corporate advisory firm, says the past five seasons have set up what retailers and growers will be experiencing in seed this winter and spring.

As the driver of biotechnology adoption through the early 2000s, Monsanto really came into its own by 2006, right at the cusp of the corn price uptick that reached its peak in July 2008. With competition still working to catch up to Monsanto’s lineup of genetic breakthroughs, the company set aggressive pricing in response to not only its strategic view of trait value sharing with farm customers, but also on belief in the sustainability of high corn prices.

In 2008, based on its decision to accelerate the timing of pricing decisions, Monsanto had set 2009 pricing for its seed as the price of corn was peaking, says Shimoda. “They aggressively raised prices based on the new and uncharted territory we were in — corn in the $7 range — and did not see we were in the midst of a pricing bubble,” he says. “It really created a monster.”

By August 2008, the price of corn had fallen, but Monsanto decided to stick with the higher seed price points. Meanwhile, Pioneer Hi-Bred, buoyed by the release of its own triple stack hybrids, could provide a more comparable genetics package at a lower price point.

More challenges occurred on the soybean side, where Monsanto introduced its Roundup Ready2Yield. “The company said that the technology would deliver a clear and substantial yield gain,” says Shimoda. “And for that added value, the soy list was about $20 to $25 higher than Roundup Ready 1.”

The 2009 season would not cooperate with the initial launch of Roundup Ready2Yield, as cool and wet weather accentuated disease susceptibility in many key locations, which diminished the yield return of the new release. It would also mark the bottoming out of Pioneer market share, says Shimoda, and a flat year for Monsanto.

Pioneer was able to take advantage in 2010 and pick up market share on seed with comparable performance and lower cost. Meanwhile, Monsanto unleashed SmartStax technology into another challenging weather season, which diminished the expected yield gains.

Going into the 2011 season, Monsanto has revamped its seed pricing, and Pioneer is reenergized for the battle.

“The price premiums for both Smart­Stax and RoundUp Ready2Yield were very modest vs. existing triple stacks, so this year there is going to be a tremendous market share battle,” says Shimoda. “We have high corn prices, so the farmer’s willingness to spend on seed makes it a great environment.

“From a competitive standpoint, Pioneer has some wind at its back and is not giving up, and Monsanto is fully engaged. Syngenta, based on its triple stacks, is also competitive. Mycogen’s strategic agreement with Monsanto for SmartStax, as well as sharing germplasm, means its ability to enhance its market share has improved,” he concludes. “Bottom line, it is going to be a very competitive marketplace in 2011.”

Leave a Reply

4 comments on “Quest For Seed Dominance

  1. Not sure this article brought much to the table. Nothing most folks in the industry did not already know. Better yet, let’s see an article on the ‘future’ drivers in the seed MS race or how about the major investment Pio took w/ Syn’s technology.

  2. Sano should have mentioned that Pioneer priced their seed corn at $100/bag less than Monsanto. Even with $5.00 corn farmers know that it takes an additional 10 bushel/acre increase to pay for the Monsanto seed. When are the seed companies going to look at returns on investment instead of market share.

  3. Good article to read but I agree it didn’t really tell the story of what is really happen in the country. It is more about planting the best deal on the acre and not about placing the best seed on the acre. Pepsi and Coke market best taste, what does the seed companies market?

  4. The seed companies do market the right seed per the right acre, it is the author of the article that is talking about market share.

State of the Industry Stories
State of the IndustryAgriculture’s Troubled Waters
March 3, 2014
Water quantity and quality issues threaten to hamper agriculture on a wider scale in the not-too-distant future. Technology breakthroughs and improved practices are providing potential solutions. Read More
State of the IndustrySponsor Profiles: Simplot, SST And WinField Support CropLife State Of The Industry Report
January 8, 2014
The sponsor partners of the CropLife State of the Industry report have demonstrated ongoing leadership including their support of this report. Read More
State of the Industry2014 State Of The Industry: Agricultural Concerns Creep In
January 2, 2014
With many strong sales years under its belt, the agricultural community is hoping for another positive growth experience in 2014, but mindful of a few challenges that might keep this from happening. Read More
State of the IndustrySeed Systems Top Watch List
January 2, 2014
Retailers are closely following herbicide tolerance and drought resistance traits. Read More
Top 100 Articles
Milan Kucerak, president/CEO, West Central
CropLife 100West Central Cooperative And Its New President Are A Match Made In Deviation
June 29, 2015
To appreciate just how unique West Central Cooperative is in the world of ag retail, an observer need only consider Read More
Winter Wheat
CropLife 100South Dakota Co-op Member Owners Vote No On Unification
June 26, 2015
The Boards of Directors for North Central Farmers Elevator (NCFE) and Wheat Growers (WG) have announced that member-owners have voted Read More
CropLife 100The Andersons Acquires South Dakota Plant Nutrient Manufacturer Kay-Flo
May 20, 2015
The Andersons, Inc., ranked No. 22 on the CropLife 100, has purchased Kay Flo Industries of North Sioux City, SD. “This Read More
CropLife 100AgGateway’s Barcoding Initiative Progressing Nicely
May 8, 2015
According to legend (or Wikipedia), the first step towards modern bar codes came back in 1948, when Bernard Silver, a Read More
CropLife 100Pinnacle Agriculture Acquires Minnesota Retailer
April 14, 2015
Pinnacle Agriculture Holdings, LLC, ranked No. 6 on the CropLife 100,  has successfully acquired Liebl Ag, LLC in Ada, MN.  Read More
CropLife 100CHS, Aurora Cooperative Complete Fertilizer Storage, Grain Shuttle Loading Facility
April 13, 2015
CHS Inc., the nation’s leading cooperative and ranked No. 5 on the CropLife 100, and Aurora Cooperative (ranked No. 21) Read More
Latest News
Agworld Apple Watch Farm Management
EquipmentAussie Data Management Software Company Making Its Mark…
July 4, 2015
Western-Australia-based Agworld — having fully launched its data management software system stateside last year after a 2013 soft launch — Read More
Topcon AGI-4 on MF Planter
EquipmentAutosteer: Compatibility, Accuracy Remain Top Of Mind
July 3, 2015
The world of automatic steering solutions in agriculture has evolved rapidly in the last few years. From after-market add-ons that Read More
ManagementUnited Suppliers/Land ‘O Lakes Merger & Crop Update
July 2, 2015
CropLife’s Paul Schrimpf and Eric Sfiligoj talk about the reasons behind the United Suppliers/Land ‘O Lakes merger and USDA’s recent Read More
Industry NewsBioSafe Adds To Sales Force
July 2, 2015
BioSafe Systems has announced the hire of two new members for its service team. David Britt recently joined the team Read More
Chesapeake Bay
ManagementChesapeake Bay Clean-Up Gets Renewed Attention
July 2, 2015
The Chesapeake Bay has been called one of the most biologically productive ecosystems in the world. It’s also one of Read More
Measuring Bulk Tanks
ManagementBulk Pesticide Compliance: Top 10 Areas Of Improvement …
July 1, 2015
  In honor of the 33-year run of David Letterman’s Late Show, the American Agronomic Stewardship Alliance (AASA) is happy Read More
Industry NewsArysta North America Hires Midwest Sales Manager
July 1, 2015
Arysta LifeScience North America recently announced the hiring of Brian Battles as the Senior Technical Sales Manager for the Midwest Read More
Farmer on tablet
Eric SfiligojThe Never-Ending Battle Against Modern Agriculture
July 1, 2015
In the world of comic books, the character of Superman often refers to the fight to save the world as Read More
Retail FacilitiesBuilding Up Ag Retail
July 1, 2015
In the oftentimes unpredictable world we live in, it’s nice to know some things can be reliably countered on to Read More
Retail FacilitiesMaple River Grain And Agronomy Phases In Site Developme…
July 1, 2015
Marcus Construction helped Maple River Grain and Agronomy in Casselton, ND, with the design-build of its dry fertilizer, liquid chemical/seed Read More
Retail FacilitiesA&B Welding Builds A New Liquid Terminal Hub For Br…
July 1, 2015
To build its new hub facility, Briggs Crop Nutrients enlisted the help of A&B Welding. The result, an efficient facility Read More
Edon Farmers Co-op
Retail FacilitiesNew Marcus Facility At Edon Farmers Co-op Provides More…
July 1, 2015
Edon Farmers Co-Op in Edon, OH, needed a new facility to consolidate outdated locations. Marcus Construction was able to design Read More
Retail FacilitiesKinder Morgan Expands Its Storage With A New Dome Barre…
July 1, 2015
Kinder Morgan wanted additional covered storage at its Dakota Bulk Terminal on the Mississippi River in St. Paul, MN. With Read More
Retail FacilitiesHeartland Tank Protects Fertilizer From Extreme Cold At…
July 1, 2015
The Arthur Companies in Harvey, ND, enlisted the help of Heartland Tank Companies to develop a new liquid fertilizer facility Read More
The McGregor Co. fertilizer loadout
Retail FacilitiesThe McGregor Co. Partners With Kahler Automation To Cre…
June 30, 2015
Kahler Automation helped The McGregor Co. expand its Clarkston, WA, operation with unstaffed loadout technology that enables customers to pick Read More
Dry and Liquid Plant
Retail FacilitiesKahler Automation Helps CHS Dakota Ag Cooperative Build…
June 30, 2015
CHS Dakota Ag Cooperative in Mooreton, ND, wanted a liquid/dry blender system that could meet the needs of its customers Read More
Crop InputsLand O’Lakes, United Suppliers To Merge Crop Inpu…
June 29, 2015
Land O’Lakes, Inc. and United Suppliers, Inc. of Ames, IA, today announced their intent to merge their crop inputs businesses. Read More
FungicidesHelena To Distribute Unique Summit Agro Fungicide
June 29, 2015
RANMAN 400 SC fungicide, the only fungicide with a FRAC group 21 designation, is now part of the innovative Summit Read More