Should You Splurge on Seed? Experts Weigh In

September 19, 2014 09:42 AM
 
Should You Splurge on Seed? Experts Weigh In

It seems farmers are doing their homework for next spring. With low corn prices and high input costs, most are trying to figure out how much they really need to spend on seed to avoid a big dent in their pocket books.

Now more than ever, farmers are budgeting how to cut costs while achieving a big yield. But some experts say the splurge for seed is worth it.

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"I think there will be a trend more toward high-technology seed. I think the only guys who won't do that, is a guy who won't want to go to the bank and lay down numbers," said market analyst Bill Biedermann.

For those farmers who need to be a little more conservative in their spending, some recommend just sticking to beans for the next year.

"I just wonder if those guys won't be better off putting in more beans and then keeping corn ground as quality seed and high technology," said Biedermann.

But not every farmer will do that. Luckily, farmers have plenty of options to choose from.

"If you need to save cash, move from a triple to a double stack. It's a good product and it will maintain a level of corn borer control," said Beck's Hybrids Vice President Scott Beck.

Beck says he does see a small increase of farmers turning to lesser traits and non-GMO seed.

"We've had some uptake of some non-GMO products. We're up thirty percent from last year on those farmers purchasing those products," said Beck.

Meanwhile, some Dupont-Pioneer dealers say their customers haven't made major shifts.

"I see some areas moving back and forth between traits that protect for roomworm and some that don't. For the most part, we are not seeing anyone suggest major changes," said Dupont-Pioneer Commercial Lead Unit Jason Dodd.

If farmers do ask about conventional corn, they say it could save money, but consider the risks.

"They need to go back fifteen years ago to understand what potential losses are," said Dodd.

"It isn't a very widespread thing. Still a lot of people understand the need for protection. Rootworm isn't extinct and they need to still be protected themselves," said Wyffels Hybrids Director of Marketing Jeff Hartz.

If you're in a rootworm pocket of the Corn Belt, farmers could really lose out on a lesser trait.

"The triple down to double could be $30 to $40 to up to a possible $50 difference for a unit of seed corn," said Hartz.

But if you're a farmer without an insect or disease problem, experts say conventional might be the best financial fit.

"What they're finding out is, they are already doing practices that they don't really care if they have the Round-Up trait or another trait because they're getting the same yield and they're doing the same practices to offset that," said Farm CPA Paul Neiffer.

Going from triple stack to conventional could save money.

"They can probably reduce their costs by $40 to $50 per acre on the low side, to potentially $70 on the high side by just that one change," said Neiffer.

Neiffer says last year, the prices were $300 to $400 for a sack of triple-stack seed. With discounts, that might have been about $260 for triple-stack. Conventional was about $150 to $200 range; after discounts, that could maybe be under $150.

If seed companies don't narrow the price margin, those numbers could stay close to the same.

"Based on discussions, I know some of the seed companies cut back on their production this year by up to 60% to 70% because of over-supply. If you have a lot of farmers switch back to conventional seed or single-trait, there may be some risks not having enough supply," said Neiffer.

No matter if you're tightening your budget or not, farmers not only have seed options, but expert opinions, too.


 

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