Seed Pricing Stories Run Rampant

Get with your seed dealer to size up your alternatives.

Published on: Dec 8, 2008

Perhaps everyone selling and buying seed is telling the whole truth, and nothing but the truth. But by the time the stories get through the coffee shop and reach our desk, the better saying that applies is 'The first liar doesn't have a chance.'

We're not accusing anyone of lying. But we are suggesting that there is considerable confusion about how seed corn is being priced right now, and what various companies are charging. And are some farmers getting better deals than others?

The best answer we've heard yet so far for the last questions is, 'yes, wait, no, OK, maybe- we're not sure.' Without question the best advice is to get with the seedsman you work with and trust to get the straight information. Just because you hear things at the elevator or coffee shop about what company X, Y or Z is doing doesn't mean it's true. If you want to know what that company is or isn't doing, find a representative in the sales business for that firm and ask him or her to lay it on the line for you.

Some of this cloudiness about the seed price picture occurs every year, but this year's scenario seems to be more complicated than ever, as companies scramble to improve or regain market share, and as farmers are still reluctant to commit to exactly how much corn they will plant in '09. That's because since the economic picture changed so drastically during the fall, they're waiting to see what both commodity and input prices, particularly fertilizer prices, will do before they decide how much corn vs. soybeans they will raise in '09.

DeKalb did increase the amount of early-order discount it's offering. Both a reliable source and a radio commercial confirmed it. A dealer for a competitor admitted off the record that his company is allowing him to sell off the rate card. Basically, it's 'one price doesn't fit all.' The larger the volume a customer could buy, the cheaper the price, and it appears some are talking far more than typical volume discounts.

In the midst of all this, smaller companies are reluctant to jump into the price wars. Many are tied by agreements to pay hefty tech fees set last summer to technology providers, and don't have the leverage or margin some larger companies might have. Instead, at least one small independent is trying to sell itself and its seed to farmers based on the agronomic service its employees can provide to help farmers with their entire farming operation, not just with seed purchases.

One farmer buying from a major seed company says he hopes to pay around $240 per bag for top-notch hybrids once the dust settles and all the discounts are applied. Yet another customer with a different but equally large seed industry player has already locked in his seed at $50 more per bag than that price, and thought he got a good deal. And compared to suggested retail price, he did.

Dave Nanda, consultant for Corn Illustrated, expects jockeying for price and quality seed will continue into early next year. Even if a farmer has committed to buy from company A, he's not bound to do so. Nanda even contends that sometimes farmers who have pre-paid for seed by check ask for their money back and buy from someone else if a better deal comes along.

If you're going down one of those roads, you may want to check with your local attorney before you get caught in a potential legal trap. And remember that you will still need someone you trust to work with as a seedsman after this volatile year passes.