What is ahead?
Consolidation activity seems to have taken a respite for now. “It is difficult to predict if there will or won’t be any more consolidation in the market,” Pioneer’s O’Conner says. “But while there has been some significant consolidation, there still are a large number of seed companies out there.”
IPSA’s Ruehle adds, “Good, bad or otherwise, we’re likely to see more consolidation in the industry. I don’t see a huge wave like we did in the past, but there is likely to be some smart consolidation [for example, joint ventures, shared seed processing] as companies team up to create efficiencies.”
Competition among all seed companies will remain strong, even though there may be fewer seed reps knocking at your door. “Across the industry all brands and all companies sell good products,” Kaehler says. “It comes down to who the producer wants to buy from. Some choose national brands, some choose local brands. We try to offer both.”
The independent seed companies are staking their claim. “There’s a lot of divergence even among our membership on how they bring products to market,” Ruehle says. “For some, they have very aggressive breeding programs and are competing tooth and nail with the national brands. Yet a portion of our membership remains relationship-based and plans to keep it that way. And some use a combination of both.
“While the total number of planted acres changes from year to year, and we see some small shifts from national brands to regionals and back, it’s not all that substantial,” Ruehle continues. “The size of the pie has not changed, so these companies are working to get a bigger slice. The competition is phenomenal. At the end of the day, growers will benefit from a stronger product offering by all seed companies.”
In addition, higher commodity prices, evolving traits and new technologies in the seed industry have created a climate of optimism. “There is a strong relationship between the seed companies and their grower partners — large and small,” adds ASTA’s LaVigne. “From an industry standpoint, we are very upbeat and excited about the future.”