CropLife 100: Getting Past a ‘Forgettable’ 2019 in Seed

For seed, 2019 was definitely not a year to remember. In some ways the category did exceed expectations (given what was happening to the overall agricultural marketplace). In other ways, 2019 was exceedingly frustrating for seed.

First, some good news. Despite hardships and challenges-a-plenty during the 2019 growing season, the nation’s top ag retailers reported that their overall seed sales held firm compared with 2018. In fact, according to data from the 2019 CropLife 100 survey, the category revenue for the year was just a hair over $4.8 billion — virtually identical to the figure the seed category had during the 2018 growing season. Still, because overall ag retail income in other categories (such as fertilizer) moved forward more strongly, the seed category did see its overall market share dip slightly, down 1% to just under 15%.

Why were seed sales so lackluster during 2019? In two words, prevent plant. Until now, these two words hadn’t regularly appeared in the lexicon of the quarterly crop reports released by the U.S. government. But they were certainly present throughout the 2019 reports.

Overall, because of extremely wet and cool weather throughout much of the spring, plenty of the nation’s grower-customers simply ran out of time to plant any seed in their fields. In fact, according to USDA statistics, a total of 19 million crop acres never got planted during the 2019 growing season. In some states, such as Ohio, Minnesota, Missouri, Arkansas, and Illinois, prevent plant acreage totaled more than 1 million acres each. In South Dakota, an estimated 3.9 million acres never received any seed this year.

Prospects for 2020

With all the acreage that wasn’t planted during 2019 leading the way, CropLife 100 ag retailers are anticipating that the 2020 growing season will see renewed seed sales — assuming the weather across the Upper Midwest and Mid-South adheres to a more traditional wet/dry pattern than it did during 2019. Among the major row crops tracked in the CropLife 100 survey, 2019 respondents predict that corn will see the biggest gains in seed sales during the upcoming season.

According to the 2019 CropLife 100 survey, 67% of respondents believe that corn acreage during 2020 will grow more than 1%. Many of those surveyed think that corn will make such a strong comeback because of how much of it was likely switched out with shorter-season-growing soybean seeds during 2019. Others think that the continued fallout from the year-long U.S.-China trade war will cause many grower-customers to embrace corn instead of soybeans.

For soybean seeds, the outlook for 2020 is less positive. According to 2019 CropLife 100 survey respondents, only 29% foresee soybean seed demand increasing more than 1% next year. Thirty-two percent see no change in soybean acreage for 2020. However, the largest percentage of the nation’s top ag retailers (39%) predict soybean seed sales will be down during the upcoming season.

Of course, this drop in soybean seed demands ties back to the same issue that has depressed soybean demand/prices over the past year-and-a-half — the U.S.-China tariff war. While every third row of U.S.-grown soybeans normally ends up being exported to China, this market has virtually ground to a halt as higher tariffs have kicked in.

At press time there were whispers among U.S. and Chinese officials that a new trade agreement between the two countries could be finalized by the end of 2019. Obviously, this could alter some of the outlook for soybean seeds if that were to happen.