Competition for your seed business is fierce
Gone are the days when farmers only bought seed from their sales rep. Today, seed companies offer a wide-ranging portfolio—everything from herbicides to software to data analysis.
While bundling is advantageous, seed performance is still at the heart of a company’s success. "Corn and soybean market share is driven by the industry’s consolidation during the past decade, plus swings in hybrid and seed performance," says Dean Cavey, managing partner of Verdant Partners, a consulting firm in Champaign, Ill.
As competition for farmers’ business remains fierce, the seed industry continues to grow, both inside and outside of the U.S. The global seed market’s value is approaching $50 billion, Cavey says. Of that, the U.S. seed market is worth about $12 billion.
DuPont and Monsanto Company are the clear heavyweights, possessing 70% of the corn seed business and slightly more than 60% of the soybean seed business. While they are basically within a share point of each other in corn sales, DuPont has pulled ahead in soybeans by almost eight points.
The other two national brands on the seed circuit—Dow AgroSciences and Syngenta—currently hold 5.3% and 6.1%, respectively in the corn market. Syngenta at 10.1% also has an edge on Dow AgroSciences’ 5% on the soybean side.
AgReliant Genetics enters the mix at 6.7% market share in corn and 3% of the soybean business.
Although market share has been slipping each year for both local and regional companies, together they still own 11% of the corn market and almost 18% on the soybean side. Farm supply brands, public and saved seed, round out the remainder of the soybean market share at 2.5%.
The big four have remained relatively consistent in market share for the past several years. Syngenta is the only one of the national brands that has lost market share, which has allowed for other companies to gain. "The fastest riser in recent history is AgReliant," Cavey says. "This is due to a combination of performance and a high level of customer service."
Consolidation trend. Because farmers have rapidly adopted transgenic traits, the major companies have aggressively bought up seed genetics and seed distribution companies for the past decade. "In the pre-transgenic trait age (before 1995), there were some 300 companies in the U.S. marketing seed corn," Cavey says. "There are less than 50 now."
Consolidation has been a prominent trend in the seed industry—and one that will likely continue, says Phil Howard, associate professor at Michigan State University. "But there aren’t as many companies left to acquire now," he says.
Acquisitions are still happening, but most are outside of the U.S. "The seed industry continues to become more global and more consolidated," he adds.
Companies continue to cross-sell technology and bundle services. "The relationship between the big six seed and chemical companies continues to get closer," Howard says.