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SINCE THE INTRODUCTION of genetically modified herbicide-tolerant and insect-resistant traits in corn and soybeans, ag retailers have seen a huge shift in sales from crop protection products to seed. But margin pressures are causing retailers to seek ways of adding value to the seed they sell. This is one reason why many retailers plan to increase their offerings of seed treatments and seed-treating services. These products and services can add value in several ways to the changing ag retail business.
Seed experts
NEW Cooperative, a full-service ag retailer serving producers in six north-central Iowa counties who farm about one million acres, offers custom seed-treating services, says Dan Dix, agronomy sales manager. He explains that these services have given his co-op opportunities to talk with farmers about fertilizer, crop protection products, precision agriculture and other services. Seed treatments, he stresses, give retailers another “touch point” with the producer.
New customers who want to have their own seed treated can come to NEW Co-op. “This allows us to talk to them about the seed varieties we sell as well,” Dix says. “Some retailers in the area don't offer this kind of treating service, so we've become the experts.”
The Iowa co-op began offering soybean seed-treating services at its Knierim, IA, location about four years ago. Over the years, Dix has seen seed treatments replace some conventional insecticides and postemerge fungicides. “Dealers will need to be able to offer seed treatments and treating services in the future or be left out,” he states.
NEW Co-op's bulk soybean seed facility, which houses a Universal seed treater, can treat up to 2,000 units/hr. “The treater provides good coverage at high volumes,” Dix says.
Farmers can choose from among several soybean seed treatments at the co-op, including Cruiser, Apron, Maxim and Warden RTA. Soybean seed treatments are now available at 10 of the co-op's 18 locations. In addition to seed treatments, farmers can have soybean seed inoculated at the same time.
Farmers have increased their use of seed treatments in recent years for various reasons. Dix notes that, in his area, the heavy Clarion-Nicollet-Webster soil types often present problems with Fusarium, Pythium, Phytophthora and Rhizoctonia. Seed treatments provide early protection against these fungi, he says.
Improvement in plant health
Tim Maloney, a farmer and research agronomist who owns Agri-Tech Consulting, Janesville, WI, says more producers are using seed treatments because they are “effective, economical and contribute to yield enhancement.” Over the last few years, Maloney has observed a great improvement in plant health. “This improvement has been due in part to the pesticide component of seed treatments as well as the growth promotion component. Producers like what they see,” he says.
Maloney, who has provided seed treatment testing services since 2000, observes that even in years when insect populations were not high, seed corn treated with Poncho, for example, still provided yield advantages over corn treated with a basic fungicide. He theorizes that seed treatments may be effective against pest populations that have traditionally fallen under the radar screen.
For example, there could be a 2% infestation of wireworms in a particular field, which a farmer probably would not detect. If added with a 3% infestation of grubs and a 4% infestation of seedcorn maggot, yield reduction soon could reach what Maloney calls a “sublethal economic threshold.” It would not pay to treat each pest separately (and there is no effective treatment for seedcorn maggot), but seed treatments can go far to prevent these pests from making a bigger impact, he reasons.
Scott Hart, corn product manager, Garst Seed, Slater, IA, agrees. He notes that with farmers now planting much earlier in the season, corn seedlings may take from two to as long as four weeks to emerge. The longer the seedling takes to emerge, the longer it is exposed to grubs, wireworms and seedcorn maggots. “Having a low rate of Cruiser or a treatment of Poncho 250 on the seed would help,” says Hart, noting that treated seed has been showing exceptional results in the field.
Breaking through yield plateau
Mike Schaefer, soybean product manager, Garst Seed, Slater, IA, says that with all of the value-added traits available today, seed has become more expensive and farmers are looking to protect their investment. “They're also excited about the value of seed treatments. Soybean farmers are looking for the opportunity to break through yield plateaus,” says Schaefer, noting that environmental factors have generally prevented soybean crops from reaching their full yield potential.
And there is this point to consider: Seed treatments can help both farmers and retailers by reducing replant situations. In his work with Wisconsin companies over the last few years, Maloney has seen virtually no replants of treated soybean seed. “Retailers never make money on replants, and farmers never make up that lost yield,” he says.
Less hassle
Convenience is another reason farmers have readily adopted seed treatments, says Luke Kleen, C&M Supply, an independent dealership in southern Nebraska. This full-service dealership, which serves growers within a 40-mile radius of Ruskin, NE, began offering soybean seed treatments about five years ago. Farmers like the dealership's treating services because seed treatments provide better coverage than planter box treatments and because seed treatments reduce their exposure to chemicals, Kleen says.
The Nebraska dealership added Cruiser Maxx Pak to its lineup over the last year to help growers in some areas combat bean leaf beetle and soybean aphid. This insecticide/fungicide combination product also helps protect soybeans against damping off, Pythium, Phytophthora and Fusarium, Kleen says.
Like NEW Co-op, C&M Supply enables farmers to get their soybean seed treated and inoculated at the same time. It uses a USC MP (multipurpose) seed treater for soybean and wheat seed. Kleen notes that the equipment can treat about 800 bu. of soybean seed/hr.
Farmers wanting the service can come to C&M Supply's facility and order any weight of treated seed they want. Kleen explains that seed goes through a weigh hopper and is delivered directly onto the farmer's truck bed or a seed tender (which C&M Supply also leases). The setup saves labor for both farmer and the company, Kleen says.
The seed-treating service has attracted new customers and has enabled the dealership to sell more of its other products and services (for example, crop protection, seed, inoculants, fertilizer, and crop scouting and precision ag services) to farmers.
Kleen advises other retailers who are thinking about adding seed treatment services to visit other facilities first to see how equipment (including bulk bins, treaters and conveyors) is set up. “We've made a couple of changes to make treating more convenient, and we've talked to other retailers, especially about what conveyors work best,” Kleen says.
The ability to treat seed at one's retail facility offers a great deal of flexibility, says NEW Co-op's Dix. “Growers can decide at the last minute if they want to treat seed. This is especially important if early spring conditions are conducive to problems,” he says.
Long-term value
To successfully market seed treatments, both Kleen and Dix agree that retailers need to set up side-by-side plots (preferably on farmers' fields) to show farmers that treated seed produces better plant stands and yields.
“Farmers like to see proof of performance on their own farm or their neighbor's,” agrees Garst's Schaefer. The key to successfully marketing seed treatments, he adds, is knowing what value and protection they offer customers. “We need to show farmers the long-term value of seed treatments,” he says. “There will be times when the farmer might not see yield increases. But if he uses treatments over a five-year period, he will more than likely see yield increases in three or four years out of the five.”
“It's important to provide accurate results to support the adoption of this technology,” Maloney says. “Yield is the best way to market a product, and photos to document field differences always will support yield claims. Price is a consideration, but if the seed treatment works, I don't think it becomes such a stumbling block.”
Retailers also will do well to promote seed treatments on the best genetics. At the same time, margins can improve when retailers sell better, more expensive hybrids that are more profitable, Maloney says.
Another marketing point that retailers can make is that seed treatment application is much better than it once was. “Most of the seed treatment manufacturers are very stringent about the treaters that retailers use to apply treatments today,” Schaefer says. “Technology has come a long way.”
“The new Universal treaters are doing a great job,” Dix says. In the past, there had been coverage and throughput problems with treating equipment, he says.
“When marketing seed-applied insecticide, growers must be informed to add talc in their air planters or graphite in their finger planters or seed drop will be affected,” Maloney adds.
Corn rootworm
Recently, there has been growing discussion that corn rootworm can still create yield problems on genetically resistant corn. Maloney points out that the pest has been steadily increasing over the past few years. “An insecticide seed treatment (for example, Poncho or Cruiser) can provide good rootworm control, but factor in a very early planting date, a hybrid with inherent poor root structure, and an extended early season of cool soil temperatures so you get delayed rootworm hatch (and possibly an extended period of hatch), and potentially you have a disaster,” he says.
Soil insecticides (for example, Force and Aztec) can be compromised for the same reasons, Maloney says. “Given that, it would be best to scout and evaluate a potential cornfield the previous year for rootworm threshold to see what potential pressure might be,” he advises.
Because many new planters do not have insecticide boxes, granular insecticides may not be an option. However, AMVAC Chemical Corporation, a subsidiary of American Vanguard Corporation, makes a closed-handling system for application of corn rootworm insecticides. The SmartBox system uses an in-cab computerized controller for precise application. Insecticides are pre-packaged in 50-lb. returnable containers that are keyed to open only when lock mounted into the SmartBox applicator. The SmartBox system, AMVAC says, can be fitted on major planter brands.
Maloney points out, however, that operator proficiency is still the key to good coverage. That is why many farmers may instead choose to have retailers treat the seed.
“A liquid, such as Regent or Capture, would be an option, providing application equipment is installed on the planter,” Maloney says. “The problem is these materials may not provide enough root protection.” The producer may decide to make a post application of a chemical like Furadan, but he may decide against it, Maloney adds. “So enter corn rootworm Bt corn. There is no need for insecticide boxes. Ironically, though, one cannot buy corn rootworm-protected corn with a low rate of Poncho. Because of refuge requirements, this is where a high rate of a seed-applied insecticide could be used effectively,” he says.
Automatic treatment
Seed treatments already have had a large impact on ag retailing and will continue to add value in the future. These industry representatives point out that as producers increase their farm operations, they are pushing back planting dates to earlier in the season. This underscores the need to protect seed in cold, wet soils and to aim for improved stands.
“The industry is moving more toward multi-stack hybrids, and drought-tolerant hybrids are coming,” Maloney says. “With all of this and more going on, seed treatments will become an automatic thing, not an option. Small-acreage farmers are becoming a thing of the past, and huge operations are demanding the best of everything. They are operating on an economy of scale, not necessarily on per-acre profitability. They factor government payments as part of their income and want crops that can withstand every pest problem effectively.”
Retailers that can provide seed treatments and seed-treating services to help produce this kind of crop will add value — for the farmer and for themselves.
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