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

Fertilizer Tender close-up
MicronutrientsHow Micronutrients Fit Into 2017 Fertility Plans
January 10, 2017
Where do micronutrients stand going forward in fertility plans? For one thing, Tim Mundorf, Field Representative with Midwest Laboratories, says Read More
Fertilizer application
State of the IndustryCautious Optimism On Fertilizer In 2017
January 10, 2017
What kind of fertilizer rates are growers and retailers looking at in 2017 and beyond? According to stakeholders CropLife magazine Read More
Asmus Farm Supply crop protection products in storage
State of the IndustryCrop Protection Products Market: Complexity Begets Opportunity
January 10, 2017
While other key market segments in agriculture continue to see tumultuous shifts in sales volumes going forward (large equipment sales are Read More
Pioneer corn seed in storage
Special ReportsState Of The Seed Industry: Better Later Than Never
January 3, 2017
Traditionally, the majority of the nation’s grower-customers made their seed planting decisions in the late fall. Normally, when folks attended Read More
Trending Articles
PrecisionAg Vision Conference
Precision AgPrecisionAg® Vision Conference: Focused on the Future
June 13, 2017
PrecisionAg® is pleased to announce the return of its PrecisionAg Vision Conference, October 10-12, 2017. Based on overwhelmingly positive response Read More
Redbanded-stinkbug-on-soybean-Photo-credit-Thomas-County-Ag
Crop InputsExperts: Mild Winter, Early Planting Will Increase Soybean Insect Threat
June 12, 2017
Higher than average temperatures this past winter affected much of the nation, especially the South and Midwest. The National Centers Read More
Eric SfiligojMonsanto ‘Picks Its Battles’ by Nixing Deere Deal
May 23, 2017
Having been in the trade journalism game since the mid-1980s, I remember several watershed moments during my career. One of Read More
Migrant farm workers
LegislationTrump: Immigration Crackdown Won’t Impact U.S. Agriculture
May 16, 2017
President Donald Trump said he would seek to keep his tough immigration enforcement policies from harming the U.S. farm industry Read More
AGCO Ratliff featured
Eric SfiligojRemembering Robert Ratliff
May 15, 2017
With all the fast-paced happenings in agriculture this spring, with multiple mergers in the works and planting season in full Read More
Case sprayer nozzle closeup
EquipmentSpray Application: A Nozzle Renaissance
May 2, 2017
If you had asked four-decade ag veteran Mark Bartel, President of Wilger Inc., just a few years ago what lay Read More
Latest News
Crop InputsArkansas Plant Board Votes to Ban Dicamba — Now W…
June 23, 2017
The Arkansas State Plant Board has voted to pass a proposed emergency rule to ban the use of in-crop dicamba, Read More
Engenia soybeans
Crop InputsBASF: ‘Closely Monitoring’ Dicamba Situatio…
June 22, 2017
BASF, whose Engenia herbicide is the target of more than 200 drift complaints in Arkansas, emailed the following statement to Read More
ManagementConsolidation Update
June 22, 2017
Editors Paul Schrimpf and Eric Sfiligoj discuss progress on manufacturer consolidation, and another big move for Midwest cooperative Central Valley Read More
Palmer pigweed seedhead in cotton
Crop InputsThreat of Dicamba Ban Looms in Arkansas
June 22, 2017
The Arkansas State Plant Board has rejected a proposed ban on the use of dicamba herbicide, but a procedural error Read More
Potash Agrium
Crop InputsAgrium-PotashCorp to become Nutrien upon Merger Complet…
June 21, 2017
Potash Corporation of Saskatchewan Inc. and Agrium Inc. have announced today that once the anticipated merger transaction closes, the new Read More
Crop InputsMidwestern BioAg Hosts TerraNu Fertilizer Plant Opening…
June 20, 2017
Last Friday, Midwestern BioAg was joined by over 80 local farmers, media and staff to celebrate the grand opening of Read More
Soybean Field
Industry NewsAligned Ag Distributors Names New President
June 19, 2017
Aligned Ag Distributors LLC announced this morning the appointment of Mary Tolke to the position of President/CEO, effective July 1. Read More
ManagementPlotting Corn, AGCO/Asmark’s Applicator Training Center…
June 15, 2017
Editors Paul Schrimpf and Eric Sfiligoj talk about their recent visits to Columbus, OH, and Bloomington, IL, along with an Read More
Seed/BiotechDow AgroSciences Announces Launch of Enlist Corn for 20…
June 14, 2017
Enlist corn will be commercially available in the U.S. for the 2018 growing season. Dow AgroSciences announced the launch today Read More
ASMARK AGCO Applicator Training Center
EmployeesAsmark, AGCO Open Training Center for Beginning Applica…
June 13, 2017
AGCO Corp. and the Asmark Institute have opened a new Applicator Training Center, created in a collaboration between the two Read More
Power to Do More Contest Winners
HerbicidesDow AgroSciences Announces Three Winners in Power to Do…
June 13, 2017
Thousands of votes have been cast and three farmers have been awarded the power to do more with a $10,000 Read More
Frogeye leaf spot
FungicidesStrobilurin-resistant Frogeye Leaf Spot Threat Looms wi…
June 13, 2017
Heavy spring rainfall throughout the South and Midwest delayed planting and created the perfect environment for diseases like frogeye leaf Read More
PrecisionAg Vision Conference
Precision AgPrecisionAg® Vision Conference: Focused on the Future
June 13, 2017
PrecisionAg® is pleased to announce the return of its PrecisionAg Vision Conference, October 10-12, 2017. Based on overwhelmingly positive response Read More
CHS St. Paul, MN fertilizer terminal
LegislationICGA Praises President Trump’s Remarks on Waterwa…
June 12, 2017
Illinois Corn Growers Association President Justin Durdan, a farmer from Utica, issued the following statement regarding President Donald Trump’s comments Read More
Wheat Growers
UncategorizedWheat Growers Names Tracy Linbo as Senior Vice Presiden…
June 12, 2017
Wheat Growers has hired Tracy Linbo as Senior Vice President of Agronomy. Linbo joins Wheat Growers after having served 10 Read More
EquipmentAgTech Summit Aiming High for Modern Farming Solutions
June 12, 2017
THRIVE AgTech, in partnership with SVG Partners and Forbes, is hosting the third annual Forbes AgTech Summit June 28-29 in Read More
Central Valley Ag Randolph, NE
Precision AgLand O’Lakes Invests in EFC Systems
June 12, 2017
Land O’Lakes, Inc. has made a minority equity investment in EFC Systems, Inc., an ERP (Enterprise Resource Planning) and precision Read More
BRANDT
Crop InputsBRANDT Products Approved for Use with New Cropping Syst…
June 12, 2017
BRANDT, a leading manufacturer of specialty products for the agriculture and turf markets, has announced that 11 BRANDT formulations have Read More