Ariver of seed will soon flow from dealer warehouses to farm fields across the Corn Belt. It's a time of high anxiety for growers. Planting represents a “D-day” of sorts, when their total crop production investment is put on the line. What happens from here to harvest will have a lot to do with how seed was integrated into the agronomic plan.

That sobering truth defines the dealer's critical role in helping customers choose the best seed for their farms. It's a role more retailers are taking on as consolidation, reduced margins and seed technology change the way farm products are distributed.

“There are plenty of opportunities for retailers willing to make a real business out of seed,” says Jack Bernens, vice president, marketing for Syngenta Seeds' NK Brand. “In the past, some retailers were nervous about selling seed because if a certain variety didn't work out for the customer, they thought they might lose fertilizer and chemical sales the next year. And seed margins are typically lower than fertilizer and crop protection products. But the fact is, we expect that in a few years seed will overtake chemicals in profitability.”

Syngenta market research shows that 70% of retail businesses have added seed to their product lines and within three years nearly 100% will get on board. “But I believe many still don't appreciate the marketing opportunities,” adds Albin Hubscher, head of Syngenta's corn and oilseed North American operations.

Taking on too many brands is a common mistake many retailers make, Hubscher says. “Those who differentiate themselves with growers have learned to promote a particular package. They focus on hybrids and varieties within two or three brands. To provide the best seed solutions for individual customers, they've become seed specialists who know what genetics they need in their geography. They have a total understanding of how each variety in their portfolio adapts to weather extremes, soil type and tillage practices.”

Market research at the Monsanto Company lends support. “Our studies show growers don't believe an individual dealer can successfully carry more than two or three brands and stay savvy enough to make specific farm recommendations,” says Mark Herrmann, Monsanto's director of branded seeds. “We've clearly identified that seed truly is a high-anxiety purchase for growers and it takes a lot of technical knowledge by the person delivering the product to build confidence with the customer. It's pretty easy for someone new to seed sales to get overwhelmed with the number of seed products and specific targeting requirements of each product. You simply have to narrow it down to a package that fits your own territory.”

Pioneer Hi-Bred International, Inc., while reporting few storefront sales, requires that its dealers carry only the Pioneer brand. “While we have integrated part of our sales organization between Pioneer and DuPont Crop Protection, we still look at distribution of seed and crop protection products as a dual strategy. Because of the complexity of the seed business, we're adhering to that policy,” says Jerry Harrington, sales and marketing public relations manager. “Over the past few years we've encouraged our professional sales reps to become full-time seed dealers. It's becoming more difficult for busy farmer dealers to handle spring delivery and fall follow-up with customers while managing their own farms,” he adds.

Fortunately, seed companies are making it easier to segment customer needs. Syngenta Seeds, for example, now has 95 seed portfolio versions that match up with the company's sales districts, compared to only eight versions that covered the entire country in the past. “In Iowa, a sales district might comprise four counties. So within those four counties we will have maybe six corn hybrids and five soybean varieties that the dealer focuses on,” explains Bernens.

Still, there is no hard-and-fast rule. GROWMARK, for example, added Monsanto's DeKalb and Asgrow brands to the regional co-op's proprietary FS Seeds and Syngenta lines last year. “We simply felt we needed to help our FS member cooperatives grow their seed acres. If brand really does matter to a farmer and you're handling that brand, it allows you access to an acre you couldn't reach otherwise,” says seed division manager Ron Milby.

New seed dealers find that fall custom application often conflicts with the prime seed- selling cycle. “In 2001, some retail seed locations were focused on applying fertilizer into late November and put off marketing seed until December. By then it was all over,” Hubscher recalls.

Don't rely on genetics to drive your success, adds Monsanto's Herrmann. He suggests a series of informational grower contacts during the year to build a non-genetic reason for the customer to stay with you. For example: get into the fields mid-season to check performance; in late season, with suggested harvest tips for particular hybrids; in November, to discuss actual performance data and to make recommendations for the following year. This is the time to outline key support programs such as early cash discounts or below-prime financing options.

“These contacts can be key challenges because they require managing time you wouldn't need with a standard crop protection business,” Herrmann says.

Genetics 101: Don't recommend a variety on the whole farm because it was a customer's best number last year, warn the seed experts. It's one of the fastest ways to fail. You wouldn't want your stockbroker to invest more than 10 to 20% of your portfolio into any one hot stock; the same principle applies to seed.

“It's tempting to think that all you have to do is get a customer to switch brands,” adds GROWMARK's Milby. “In truth, you need to show them more value than one year's yield. Otherwise you'll lose them as soon as someone else introduces a hot number.”

Are the hybrids also different agronomically? “If you select two hybrids of differing genetics, but they both require 2,500 heat units to silk, then you still haven't done anything to reduce the customer's risk during pollination. They'll pollinate at the same time and be equally vulnerable to hotter-than-normal temperatures,” says Bernens.

Soybeans are generally more stable under stress. Because you get a lot more performance swings with corn under differing environmental conditions, corn requires higher service and technical expertise than soybeans to make the right choices, Herrmann points out.

Seed sales open new income doors. One-third of all NK Brand soybean seed is now handled in Q-Bit containers holding 36 units of seed, big bags or the company's TruBulk System bins, says Hubscher. About one-half of the NK bulk locations also have seed-treating equipment, earning an additional $1 to $2 per unit. That can add 5 percent or more to seed profits.

Planter calibration is another growing profit center at retail seed sites. “Dealers who apply our TruPlant program earn a $25 to $50 calibration fee per planter unit. On a 24-row planter, that's a nice piece of off-season income,” Hubscher adds.

Rootworm control is shifting from soil insecticides to seed-applied chemistry and Bt hybrids, demanding even more seed sales expertise. Here's another opportunity to help growers integrate the right products with their specific agronomic needs.

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© 2007 Penton Media, Inc.