But according to the seed company officials we spoke with, that is simply not the case.
“Prevent plant acres will not impact 2020 seed prices,” says Ben Kaehler, commercial unit leader with Corteva Agriscience. “We may carry over 2 to 5% additional supply, but not enough to have a massive impact on supply or prices.
“My forecast is that 2020 seed prices will be pretty consistent with 2019 prices,” he adds.
Seed corn can be stored for years.
“We put it back in weather-controlled storage and then re-test it all before putting it back on the market for next year,” says Kaehler.
Soybean seed is another matter. Corteva and most companies don’t carry over soybean seed.
“It could be a supply challenge,” he says. “We got plenty of acres planted but it depends on frost. If we get an early frost it will send the whole industry into a challenge.” Adds John Kermicle, general manager with AgriGold: “Group 4 and 5 soybeans are the biggest risk.”
Growing season challenges
Farmers may forget that seed companies also faced a weather challenge this year, resulting in less-than-ideal production and lower than average yields.
“When planting got later there was a huge maturity shift to shorter season hybrids,” says Kermicle. “As a result, the industry may be tight on 105-day and shorter maturities for 2020 because inventory was used up to some degree. Plus, replants took up quite a lot of seed. We probably doubled the soybean replant acres we usually need and had up to 20% higher corn replant acres compared to usual.”
Like most businesses these days, the seed industry carries very little long-term inventory. Most companies have a 30% carryover goal: if your typical goal is to sell 10,000 units you want 13,000 units in inventory. “That’s our buffer in seed corn,” says Kermicle.
Most companies we spoke with are not concerned about quantity or quality of seed in either corn or soybeans. They often grow in diverse locations across the country.
“When you grow in so many areas you can move things around based on weather issues,” says Channel brand lead Brock Helgerson. “And while we did plant later than usual seed corn harvest starts around Labor Day, so frost is not as big a worry compared to commercial corn.”
Seed companies often over-produce in anticipation of higher demand for key hybrids, notes Helgerson. “We also need to layer in expectations for a higher than usual number of corn acres in 2020,” he adds.
Seed is tested regularly for quality and can remain strong for multiple years. That helps to provide flexibility and consistency in ensuring a reliable seed supply.
“Stored seed is tested far more thoroughly than most farmers think,” he says.
More conventional corn? Nope
Farmers Business Network officials claimed this year that their farmer data shows the cost of traited biotech seed is no longer worth the added cost for the expected yield result compared to conventional corn. But seed companies we spoke to say they don’t see any trend toward higher conventional seed corn sales.
“If we all went to conventional corn, in two to three years we’d all be overrun by corn borer,” says AgriGold’s John Kermicle.
“Our conventional corn acres are rising, but just a percentage point or two,” says Corteva’s Ben Kaehler. “It’s still less than 10% of our overall sales. Our biggest sellers by far are still stacked traits.
To that point, Corteva is introducing Enlist E3 for 2020, a new soy trait technology that provides tolerance to glyphosate, glufosinate and 2,4-D. It will be sold by 100 seed companies, says Kaehler. A new triple stack, “Qrome,” will provide above and below ground insect protection and will be sold by Pioneer and other Corteva brands.
Source: Mike Wilson, Farm Futures
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