National vs. local seed
Although there may be fewer players in the seed market, the market share of national vs. local/regional seed companies has remained somewhat stable. According to IPSA data, in 1965 the percentage of corn seed sold by national brands stood at 78%, with the remaining 22% of seed sold by local and regional seed companies. Flash forward to today and percentages are close to the same, with 81% from national brands and 19% sold by regional and local companies.
“There may be fewer local and regional companies, but their footprint in the corn market remains fairly consistent,” Ruehle says.
The soybean seed business has a different story. Local and regional presence for soybean seed shrunk from 48% in 2002 to just 29% in 2010. Although that decrease has been more pronounced than in the corn market, it still shows a strong presence for local brands.
“Regional companies have unique attributes to compete with a national brand,” Ruehle says. “These companies can focus on their local area, developing trait and genetic packages for the specific needs of their customers.”
Some local and regional seed companies carry strong brand identity. “Regional seed companies have good brand awareness around them,” reports Dow AgroSciences’ Kaehler. “Producers are familiar with the name, and we think there is a lot of value in keeping that brand name. Our seed affiliate companies will continue to keep their brand name and regional presence.”
The advantage for national companies, on the other hand, is that they can offer genetic and trait packages across a wider variety of seed offerings.
For Pioneer Hi-Bred, the company’s PROAccess has been very successful in allowing local management structure to remain for regional seed brands. At the same time, the regional companies have access to a larger library of traits and genetics.
“Our overall strategy has been around offering choices,” says Judd O’Connor, vice president, sales, Pioneer Hi-Bred. “We offer producers who want to work with a local company that option, while also offering producers the opportunity to work with a national company as well. The bottom line is serving customers with seed options.”