SOYBEAN PRODUCERS will garner a lot of attention from seed suppliers over the next few years, as suppliers work to maintain their share of the shrinking soybean market. What this means for producers is good seed supplies and aggressive marketing from companies working hard to secure their business.
With more soybean acres giving way to corn, producers are expected to scale back on 2007 soybean seed purchases. The USDA March “Prospective Plantings” report gave the market its first clear picture of the shift, indicating that growers intend to plant 90.5 million acres of corn this year, 15% more than 2006's 78.3 million acres and the highest acreage total since 1944. That's at the expense of soybeans, where acreage is expected to be 67.1 million acres, down 11% from last year, when producers planted 75.5 million acres of soybeans.
Over the next few years, it's anyone's guess how long the corn shift will last. But given the current supply and demand situation, don't be surprised to see corn acreage to again top 90 million acres in 2008.
For soybean seed suppliers, that means the same companies will compete in a market that at best remains the same, and at worst is even smaller than in previous years.
“There's going to be some volatility in the soybean seed business,” says David Thompson, director of marketing for Stine Seed Company, Ames, IA. “In the overall picture, the pie is getting smaller, and the same people are selling to that acre. What we have to do is determine the best way to maintain our market share.”
“The magnitude of the switch to corn probably won't be fully known until July 1, when the dust settles and we sort everything out,” says Don Schafer, senior product line manager for soybeans at Pioneer. “All our market surveys, from industry analysts to our sales staff, point to fewer bean acres in 2007, but there also is a lot of indecision out there.”
Producers always make last-minute switches out of one crop and into another. But it's the magnitude of the potential switch in 2007 and 2008 that has seed companies working diligently to ensure product is available.