Oct 18, 2013

Seed industry sees continued growth

The commercial production and sale of vegetable seeds continue to be bolstered by increased market demand for most varieties.

A report issued in August by Transparency Market Research indicated that the global commercial seeds market was valued at $34.5 billion in 2011 and is expected to reach $53.3 billion in 2018.

The report cited the rapid development of bioseeds, also known as Genetically Modified (GM) seeds, as one of the primary factors affecting the growth of the commercial seed market. Corn was the largest seed grown commercially, and accounted for more than 40 percent of global seed consumption in 2011.

According to USDA’s Economic Research Service, producer prices for vegetables – the wholesale costs of produce – are expected to increase by 0.7 percent annually on average from 2013 to 2022. U.S. imports of vegetables are projected to grow by 4.6 percent in value per year through 2022, whereas export value is projected to grow by 2.9 percent over the same period.

In the last quarterly report issued by ERS prior to federal budget restrictions that suspended the reports, statistics showed that the first-quarter 2013 grower price index for all vegetables was up 83 percent compared with the first quarter of 2012, and up almost 60 percent above fourth quarter 2012. That means producers were generating a larger wholesale price for their products.

According to the California Processing Tomato Report (published by USDA’s National Agricultural Statistics Service), California tomato processors intended to contract 2.8 percent more processing tomatoes in 2013 than the previous year. A record yield of 49.8 tons per acre is expected – up 2.5 percent from last year. Assuming that processors carry through with these early intentions, 2013 output is projected to be 13 million short tons, second only to the record setting output level of 13.3 million short tons from 2009.

In 2012, ERS figures showed fresh-market vegetable production was up 1 percent from 2011. Fresh-market vegetable and melon production for 24 selected crops estimated in 2012 totaled 438 million cwt., up 1 percent from the previous year. Harvested area covered 1.68 million acres, up 1 percent from 2011. Value of the 2012 crop was estimated at $10.1 billion dollars. The three largest crops in terms of production were onions, head lettuce and watermelons, which combined to account for 36 percent of the total production.

Onions, tomatoes and sweet corn claim the highest dollar values, representing 26 percent of the total value when combined.

For the 24 vegetables and melons estimated in 2012 by ERS, California continued to be the leading fresh-market state, accounting for 44 percent of the harvested area, 48 percent of production and 50 percent of value.

The global seed market has been forecast to hit a value of $75 billion by 2018, according to market research firm Companiesandmarkets.com. This growth is spurred by the increasing demand for food by a growing global population. Other factors include rising standards in global farming and widespread use of biotechnology

Food trends expert Phil Lempert continues to tout buying local and fresh purchase trends as the reasons for the respected status of produce products in the marketplace.

Sharing results from the National Grocers Association-Supermarket Guru Consumer Panel Survey earlier this year, Lempert revealed that seven out of 10 respondents said they eat more fruits and vegetables to ensure a healthy diet.

“Health repeats as the No. 1 reason why people eat fresh foods, but the margin by which it outpaces ‘taste’ has narrowed,” the survey found. “Fresh foods keep rising in consumer esteem: 84.3 percent spend more than half of their fresh-food dollars in the supermarket, and a growing percentage (26 percent) give the grocer more than nine-tenths of their fresh-food budget. Ninety percent say high-quality fruits and vegetables are ‘very important.'”

Growth drives new projects

To meet the increasing demands for the industry’s products, commercial seed companies continue to invest in production facilities that embrace efficiency, quality control and sustainability.

Among such projects, Monsanto recently completed a $31 million expansion at its vegetable seed research headquarters in Woodland, Calif. The expansion included the building of a 90,000-square-foot laboratory and office building, making the location Monsanto’s primary site for molecular breeding of vegetable seeds. The expansion also makes the Woodland lab the largest of its kind in the world for vegetable seed health testing.

“The space and resources this expansion brings to Woodland will allow us to increase our research and help farmers everywhere grow more new, exciting products for the world’s dinner tables,” Mark Oppenhuizen, Woodland’s strategy and operations lead, said in a news release. “It also allows us to maintain a close working relationship with our customers in an area which has become a hub for seed science and which produces more than half of all vegetables grown in the U.S.”

Oppenhuizen said traditional breeding remains Monsanto’s main focus in its work with more than two dozen kinds of vegetables. The expansion will allow for the on-site addition of a seed chipper created by Monsanto engineers. Seed chippers enable breeders to know the characteristics of a plant before it is planted through analysis of a small part of the seed. Breeders can then conduct more efficient research trials to pinpoint vegetable traits that will improve grower productivity and provide consumers with improved benefits such as better vegetable taste, color and quality.

Sakata Seed America recently completed a solar project installation at the company’s U.S. headquarters in Morgan Hill, Calif.

“Sakata is an environmentally responsible company and is extremely interested in promoting care and respect for the natural world,” Dave Armstrong, president and CEO of Sakata Seed, said in a news release. “By converting sunshine to electricity for powering our operations, we not only save costs but also reduce our carbon footprint and continue to contribute to the improvement of our environment.”

Sakata also has a three-year plan to improve infrastructure through several water and energy reduction projects.

Holland, Mich.-based Siegers Seed, a distributor of vegetable seeds and plants in the United States and Canada, recently added a new and upgraded cooling system at its LaBelle, Fla., office and warehouse.

“In order to effectively care for our inventory, Siegers Seed has invested in a new, more energy-efficient cooling system” Jeff Siegers, vice president of sales and marketing, said in a news release. “The new system is more environmentally friendly and will give a more consistent environment in which the seed is stored. Seed health is very important to us and, more importantly, to our customers.”

He pointed to research from Mississippi State University Extension that found moisture and high temperatures cause rapid loss in the ability of vegetable seeds to germinate.

Sygenta Seeds recently announced the launch of its “Good Growth Plan” initiative to address global food security challenges. The idea includes “setting targets that focus on boosting resource efficiency, rejuvenating ecosystems and strengthening rural communities,” David Morgan, president and North American region director, said in a news release.

The project’s six major goals are to: increase productivity of major crops by 20 percent using more resources, improve farmland fertility, enhance biodiversity, empower smallholder farmers, train farmers on safe work practices and strive for fair working conditions for all farm workers.

– Gary Pullano