Mergers and acquisitions can have bigger impacts on a business than the initial purchase news. Take Golden Harvest Seeds, for example. The long-time family owned collection of seed businesses saw a big change in 2004 when a majority interest was purchased by Syngenta. The move helped Syngenta grow its seed market share and it gave Golden Harvest access to more germplasm for hybrid and variety development.
But the move also resulted in the announcement that Monsanto would cancel Golden Harvest access to technology after the 2005 growing season. For Golden Harvest customers and dealers the question became: Where will we access the biotech we rely on? For management, the question because: How do we grow our business and offer customers what they want?
This week Golden Harvest answered those questions during a media event. The company's co-leaders - Jim Sommer and Rob Robinson - discussed where the company was headed and the challenges ahead. Company personnel, including David Dam, who heads up the company's Western Region selling effort, outlined the future.
First, the company outlined Syngenta's longer term strategy to market its own biotech traits under the Agrisure Advantage name. Included already in that family are Agrisure CB which offers corn borer protection combined with Liberty herbicide tolerance. Agrisure GT is glyphosate tolerance the company purchased from Bayer. It was once sold as Roundup Ready technology by Monsanto, but that changed when a legal battle gave ownership of that technology to Bayer. And the Agrisure line will grow with more traits in the future.
It will take awhile before those traits are moved into the most elite germplasm at Golden Harvest. In the meantime, to offer customers products with the Monsanto traits they want, Golden Harvest is entering an interesting distribution strategy.
Corn. For hybrid seed sales for season 2006, Golden Harvest will have its lines and remaining inventory of hybrids with YieldGard and Roundup Ready traits; but the company now has the exclusive distribution rights in its trade territory for Laser hybrids. This line of corn seed features all the latest biotech tools from Monsanto, and Dam and his colleagues say the crops will perform at levels Golden Harvest customers expect.
The Laser seed line - Golden Harvest wouldn't name the corporate source - is provided inside the technology agreement with Monsanto. Basically, a seed company can choose to distribute product through any company without violating license agreements. The Laser line will not carry the Golden Harvest logo, but will note that the seed is distributed by Golden Harvest.
"We consider the offering of Laser hybrids as a bridge until Golden Harvest seed has the newest traits available," Dam says. The company estimates that it will be marketing Golden Harvest-only hybrids within five years but most will contain Agrisure technology, and perhaps technology from other providers.
Soybeans. The soybean story is a little more complicated. Golden Harvest lost access to the glyphosate-tolerance technology in the crop - yet 90-plus-percent of the soybean seed market has the technology. For the 2006 season, or the next ordering year, growers can choose between the conventional soybeans from Golden Harvest, and the glyphosate tolerance-containing seeds with the Fastart brand and the NK brand.
"We're distributing the Fastart seed line through our dealers next season, and we'll be marketing NK varieties with the glyphosate-tolerance trait," Dam explains. Syngenta has had a technology agreement with Monsanto since 1991 that allowed the company to put the glyphosate tolerance trait into soybeans. The key is whether Syngenta can use that trait in seeds with more than the NK brand.
Like so much in biotech these days, this issue is in court. "We see two scenarios," Dam explains. "In one we'll have Golden Harvest seed with glyphosate tolerance again under the Syngenta license. But if by chance we lose, we'll market the trait through Golden Harvest dealers with the NK brand." The outcome of that suit could come as early as June of this year.
For now, Rob Robinson, joint operating head for Golden Harvest, says farmers will get the seed they ordered for the 2005 growing season. For next year, these new lines and choices will be available. "In the end it's all about providing the grower choice," he says.
For more information on the new programs and products offered by Golden Harvest, talk with your local dealer. These agreements and details have just recently been worked out, so more details will be available soon.