Seed Treatments Expected To Surge

Because of its critical role at the heart of any crop farming endeavor, the seed remains perhaps the most vulnerable link in the agricultural input category. The importance of protecting this vital component has spurred a booming market for seed treatment technologies designed to give crops the best possible start, reduce risk and ensure the highest possible yield for growers. Where growers once may have increased their seeding rates to hedge against insect and disease damage, the growth in GMO technologies has driven up seed costs significantly, making this an expensive proposition.

High-yield field crops remain the dominant market for this evolving technology, with sales in the corn business accounting for more than half the global market share. The U.S. remains the largest national market with 60% of the globalshare in 2009, and Brazil was next with almost 20%. Regionally, Europe and Asia check in at 15% and 4%, respectively.

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With growers under increasing pressure to protect their investment and keep per-acre seeding rates under control, seed treatment has become an increasingly cost-effective solution.

Demand Drivers

Economics is a leading driver in seed treatment adoption. As seed prices have climbed, the need to protect this investment has also increased. For example, Purdue University reported that GMO seed corn prices averaged $237 per hectare in 2010 for a high yielding corn crop, versus around $109 for conventional seed. With such a premium seed price, growers are reluctant to over-seed and rely on seed protectants to achieve the same yield.

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In addition to corn, seed treatment has been widely used on higher value field crops such as cotton, sugar beet and wheat in Europe and certain parts of North America. When technology became available to apply insecticides accurately to seeds at very low rates, it found a ready market waiting for more effective products to protect valuable seeds at more affordable rates.

Achieving the optimal seed treatment package can contribute substantially to reducing risk and cost, allowing growers to plant earlier in the season and yield plants with greater tolerance to diverse soil, climate and pest pressure. Seed treatments also offer an advantage over foliar and at-planting soil insecticide or fungicide applications, which require a trip over the field and a higher application rate. Seed treatments also improve operator safety and reduce environmental impacts. Virtually all of these factors could preserve yield at a lower cost to optimize profits.

Protection and Beyond

As growers’ needs have changed, so too have suppliers’ bevy of offerings, mirroring trends in the overall crop protection industry. In most countries, crop protection and seed companies have developed seed treatments that provide enhanced, broader-spectrum control of fungal pathogens, often at greatly reduced rates.

The capability to apply small and very precise rates of neonicotinoid insecticides has also had a huge impact on the industry, as offerings from Bayer’s imidacloprid and Syngenta’s thiamethoxam have largely replaced older insecticides – not just lindane (which has been banned in most countries) and chlorpyrifos, but also carbamates.

Nematicides have recently been added to the seed treatment mix with Syngenta leading the development with its Avicta product, particularly in corn and cotton treatments. Rhizobia inoculant seed treatments are used widely in legumes to maximize nitrogen fixation and enhance growth.

Competitive Landscape

The landscape is changing at an accelerated rate after decades of relying on Gustafson, the essential founder of the industry. Chemtura, the current incarnation of Uniroyal and the former Gustafson, retains its global on-farm seed treatment business, as well as its fungicide active ingredients.

Syngenta used its strong fungicide, insecticide and seed presence to develop its own highly successful seed treatment business, and BASF used its discovery pipeline of fungicides to build an in-house seed treatment business of its own.

Most recently, Monsanto has entered the fray, using its very strong seed position and its link with BASF and Bayer to add value via licensing to provide seed treatment options to its customers.

On a global scale, the entry of the major multinationals has switched the main field crop seed treatment from on-farm to seed-supplier treatment. Syngenta and Bayer command more than 85% of the market together with dedicated seed treatment research and development programs. More recently, DuPont and NuFarm, among others, began working to build their own portfolios.

Growth Breeds Opportunity

While the market for seed treatment is expected to grow selectively at a vigorous rate, it will likely remain quite consolidated, with the top players maintaining the lion’s share of the business. However, there are some new opportunities in both geographic and product markets.

Farm-based, or at least localized, treatment is common for potatoes (because of their highly perishable nature)and wheat. While seed treatment is much smaller in the vegetable market, mostly because of the smaller volume of seed and multiple crop segments, major vegetable seed players Syngenta, Monsanto and Bayer have been active in ensuring optimal protection of these high-value seeds. This is also a potential growth area for new players to develop efficient, safe and cost-effective treatment for small-sized seeds.

Internationally, growth will continue to come from row crops in Brazil, Argentina and China, as these agricultural markets evolve to meet growing consumer demands and export opportunities. The continued expansion of GMO crops around the world and general emphasis on protecting seeds in the early stages of growth will spur further growth of seed treatment in most countries. Finally, a continued focus on biotech applications will spur seed treatment growth in corn, soybeans, cotton and other crops in current and developing markets.

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