Seed Treatment Stays Necessary

A few columns back, I detailed how agricultural market watchers were expecting grower-customers to cut back on certain items in 2015 to compensate for the drop in commodity prices cutting into their income. Since then, the market has seen some of this scaling back in action, with phosphate and potash fertilizer sales reportedly lagging and equipment purchases grinding to a halt.

But what about another previously “hot” area of the business – seed treatment? During the past couple of growing seasons, ag retailers have seen steady growth in their seed treatment businesses, and expanded their operations to fulfill these needs accordingly. Indeed, in our annual CropLife 100 survey of the nation’s top ag retailers, seed treatment revenue grew 1% to more than 10% for 76% of respondents.

Still, the question remains: Will growers cut back on seed treatment as a way to save money in 2015? In a word, said one former BASF seed representative, no.

“Seed treatment is not considered a luxury,” said Mike McFatrich, the former director of seed solutions marketing for BASF at the American Seed Trade Association meeting in December. “And it’s more than just insurance. Growers are paying a lot of money for their seed, so they want to make certain it comes up. But they also are looking to optimize genetics and reduce potential plant stress to boost yields. That’s part of what seed treatment accomplishes.”

So as agricultural economics in 2015 potentially hurt other categories, ag retailers can be reasonably sure their seed treatment businesses should just keep growing.