The USA seed business

Edição XXI | 01 - Jan . 2017

Silmar Teichert Peske - silmar@seednews.inf.br

    The seed business in the United States (USA) is the largest in the world, surpassing 12 billion dollars annually, with corn being the main crop. ASTA (American Seed Trade Association) holds an annual event in December in the city of Chicago to keep pace with technological developments and to articulate business. In this last edition, SEEDnews was represented and, seizing the opportunity, participated in lectures and conducted interviews, which added to personal information and literature, served as a basis for the present article.

Greatness

The cultivated area in the United States is 170 million hectares, accounting for 18.22% of the total area of the country. The US is one of the five largest countries in the world in area and yet they own almost 20% of their territory under cultivation. As a reference, Brazil cultivates practically 70 million hectares, representing less than 10% of its total area.

    The maize crop covers an area of 36 million hectares, with a production of around 380 million tons, meaning a productivity of more than 10t / ha. This area of cultivation is of a single crop per year, which does not occur in Brazil, which has two harvests per year - the summer crop and the second crop, normally established after harvesting soybean. In addition to the two harvests, Brazil cultivates 15 million hectares, with an average productivity of just over 5t / ha. 

    In relation to corn productivity, it is observed that the American corn yield is practically double the Brazilian one, being one reason for this the tradition of the Americans in the use of hybrid materials from before half of the XX century, with appreciable advantages on the materials of open pollination. Currently, American farmers use almost 100% of their corn seed with  simple hybrids (high technology), which is not the case in Brazil. On the other hand, there are Brazilian farmers who harvest more than 12t / ha without using artificial irrigation, evidencing that the average productivity can increase rapidly. In the last 10 years, the US productivity increase was 120kg / ha / year, while in Brazil it was 210kg / ha / year, which means that the difference tends to decrease over the years.

    Another major crop in the USA is soybeans, with an area of 34 million hectares and production of 103 million tons - a productivity of just over 3t / ha. In relation to Brazil, the area of cultivation and productivity can be considered similar; what distinguishes the two countries is that productivity in Brazil has increased in the last 10 years by 60kg / ha / year and in the USA the increase was 20kg / ha / year. Higher productivity leads to commercial advantages, usually due to the lower production cost .

    In addition to corn and soybeans, the USA also has an appreciable area of cultivation with wheat, being one of the main exporters countries; with rice (it is also an exporting country); and cotton.


   
    Regarding fodder, the most important ones are of temperate climates, where the country is one of the major exporters, mainly with ryegrass, fescue, alfalfa and clover. The state of Oregon is specialized in forage seed production, with an efficient certification program and an accredited seed laboratory at ISTA.





    Vegetable seeds are another big business in the country, mainly for domestic consumption, and on a smaller scale for export. Currently, most species of vegetables are hybrids, whose producing companies are located mainly in the state of California, due to the dry climate that it presents. The country’s vegetable-seed business competes mainly with Dutch and Japanese companies.
    Last but not least are the turf grass seeds, which the Americans take care of, with various materials adapted to their conditions of intense cold and heat.

Plant Protection 
    The USA is a member of UPOV at the 1991 convention, but it has a patent law covering the protection of living materials such as cultivars, which is used much more often due its robustness. While the 1991 UPOV convention protects materials up to the grain with exceptions, the patent protects even the industrial product without exceptions.
    The possibility of the patent to protect a new cultivar has caused strong discussions with the European Community, which does not allow it. The reason is that in the patent law there is no exemption for the breeder, while the plant protection law contemplates the exemption for the breeder, that is, as soon as a cultivar is offered for sale, any breeder may use it in his breeding program . Currently, the subject is outdated, each country adopting its policies.
    The corn has a natural protection also quite robust, since it is a hybrid material in which its descendants will be very different, being not attractive for the farmer to save the seed. Thus, for many years, the companies practically did not use the legal mechanisms of protection. However, with the advent of GM materials, companies are patenting their materials.

GMOs
The USA started with the GM materials, with RR soybean being the pioneer on a commercial scale in 1996. Currently, more than 70 million hectares are grown with GMOs, with maize, soybeans, cotton, canola and alfalfa, with events mainly of insect resistance and tolerance to herbicides.




    It also highlights GMOs in crops that are edible without transformation, such as sweet corn, which the country grows more than 50,000 hectares, papaya, pumpkin, potato and apple. Since 1996, the US has approved more than 190 events for 20 species. Americans really regard GMOs as safe for health as the conventional materials.




Seed Associations
    ASTA was created in 1883, and currently has a robust structure to represent the actors in the country’s seed business, having several specialists in different subjects within its staff. It has a strong domestic action, with several initiatives for the use of more and better seeds by the farmers, as well as at international level, with participation in the SAA (Seed Association of the Americas) and ISF (International Seed Federation).
    ASTA is mainly maintained by seed producers and breeding companies, whose contribution varies with each one’s turnover. Virtually 100% of the actors in the seed business are members of ASTA, which means that it does a good job promoting the use of seeds and protecting the interests of its members.
    Another organization is the American Official Seed Analysis Association (AOSA), which brings together the US and Canadian seed laboratories, and has its own rules for seed analysis. In relation to the seed certification, the country has the AOSCA (American Official Seed Certification Agency).

The event
    The event is promoted by ASTA annually, with a participation of more than 3,000 professionals from the different companies in the seed business, such as producers, breeders, equipment companies, seed laboratory materials, seed treatment products, various software, among others. The main focus of the activities is the seed industry.
    The companies are programmed in such a way that they take their employees to the event to have work meetings in the place, taking advantage of the event environment.
    The innovations of this event were computerized equipment for seed processing units, color separators, GM materials, industrial seed treatment, sale of soybean and wheat seeds per unit, among others. It called attention to a table of gravity that practically does not need to be fixed to the floor to carry out its work and a spiral separator that allows to adjust the speed of the seeds within each internal spiral.
    In relation to the gravity table, the great benefit is the non-interference of the vibration coming from the fixation with the normal vibration of the machine to separate the undesirable materials. On the other hand, the adjustment of the spiral allows to obtain a smaller seed loss, especially when it works with small soybean seeds.


Brazilian seed group with directors of BRASMAX plant breeding company


    The environment, with more than 300 stands, rooms with dozens of business desks, meeting rooms and auditorium for lectures, makes the seed entrepreneur feel well and happy to participate. It is a place where someone can establish contacts, hold meetings and attend lectures related to seeds in a short time. Corporate executives appreciate this environment by enabling them to conduct business and strategies efficiently while maintaining and enhancing their networking.

Gens editing
    The program included an important session on gens editing, the latest tool for creating new cultivars. Named CRISPR Cas9, this tool allows the breeder to use a biologic process to accurately edit (remove or add) the gene location within the genome of the plant. It is a process that involves a mechanism outside the plant, however the final product is not transgenic, not differing from the mutations that normally occur in plants. The USA considers the materials obtained by editing gens as conventional.
    The scientific work on the subject has multiplied since 2014, increasing from 600 to more than 1000 in 2015, and currently there are already products being worked with this technique, such as corn, canola, wheat, rice, potatoes, among others.
    CRISPR Cas9 has the following advantages: 1 - accuracy in genetic editing, 2 - speed in obtaining new materials, 3 - lower cost for creation and development, and 4 - lower regulation in comparison to GMOs.
    In this sense, interviews with leaders of various plant breeding programs, reveal a consensus that the issue of genes has come to stay, helping the breeder in a fast, simple and accessible way. Some actors in the seed chain see it as a democratic technology, with access for all.

Seed treatment
    Farmers’ awareness of the benefits of seed treatment in the USA is longstanding, mainly due to the  adverse conditions for seed germination and emergence, where fungicide treatment favors seed performance.
    Thus, in the case of maize, virtually all of the seed is treated industrially. However, for other crops, the percentage usually reaches 70%. In the case of soybeans, 30% of the farmers do not treat their seeds, 25% buy seeds with industrial treatment and 45% buy the seeds treated at the cooperative or at the resale. Initially, the supply of seed treatment was product-based, and currently is based on products and services.
    At the moment, the great discussion is on the safety of seed treatment with insecticides, due to its potential effect on water, soil and pollinators (bees). The tendency is to certify the seed treatment units so that the farmer does not lose the benefits of the products applied to the seed for protection and performance.

GM Materials
    The innovations of GM materials presented at the event, with a lot of emphasis, were the soybean X TEND, from Monsanto company, and the soybean Enlist E3, from Dow Agroscience. The first (with two pyramided herbicides) has already been released for commercialization, both within the USA and for those who buy the soybean grain, namely the Chinese and the European Community. On the other hand, the soybean Enlist E3 (with three herbicides pyramided and a Bt event) still does not have the approval of the Chinese and the European Community. Faced with the recognized problem of invasive control, both genetically modified materials are welcome.
    In 2017, Monsanto, according to its directors, expects to have a market share of over 40%, due to its germplasm and benefits of the system.


Spiral separator with possible adjustments on the seed speed


    These two technologies are also being released in Brazil, with Monsanto’s X TEND soybeans called Dicamba, while Dow Agrscience’s Enlist E3 soybean has the same name. In the country the materials will come with Bt events. 
    In this environment of strong competition, the companies that only have plant breeding in Brazil, such as Brasmax, TMG and Nidera, are adopting strategies in the sense of having both materials. This entails a more complex process of seed production. At the event, SEEDnews had the opportunity to attend a meeting on the subject between Brasmax and Monsanto executives.

Information
    The organizers of the event put a conference on the distance of information between the seed industry and the farmers on the agenda, and invited an executive in the field of food. It was a good presentation.
    In summary, the farmer (consumer) is currently seeking to find out about the product he will buy or use. In this sense, someone who seeks and gets information, even if he does not like it, he will probably accept it. On the other side, the one that looks for information and does not find it, soon will be suspicious of what they may be hiding. The information has a close relationship with transparency, which everyone appreciates.
    In Brazil, there are seed companies that are already using the 2D Bar Code to inform their customers of the history of each seed lot  offered for sale. The information ranges from the basic, stipulated by law, to the complementary, such as the date of the germination test, vigor evaluated by a particular test, field of seed production, among other characteristics.


Brazilian group with directors on Monsanto company


Staff
    Another panel touched on the future of the seed business, in which a Head Hunter, the president of DuPont Pioneer, and a historic corn seed producer (Bek’s Hybrids) did the presentations.
    The three speakers emphasized the importance of the people within a company, considering its effect productivity, management and profitability. A study has been shown on how a bad leader can affect the conduct and performance of his or her “staff”. Faced with this ‘bad influence’, 76%, said that they were inhibited from improving, 81% pointed out that their careers were impaired and 81% said they were the cause to think about leaving the company. A bad boss really causes great damage to a company, which is why the occupants of prominent positions must be chosen very well by trained people (Human Resources).
    Among the values that companies seek in a professional are the ability to work in team, integrity, adaptability, commitment and passion. In short, people can be considered as the most important asset that a company has, because they are the ones that make things happen.
    In this same lecture, it was also pointed out by the corn seed producer that business tends to consolidate over time, concentrating a certain activity in a few companies. However, anyone who pays attention to the opportunities with the right people, can make the right adjustments and stay healthy in the business.

Challenges and Opportunities
    There is a consensus that one of the major challenges of the seed business is the regulations that must be overcome in order to market certain products and materials and, to a lesser extent, have the right professional for a given function and develop new products and processes.
    On the other hand, there are several opportunities, such as the “new” hybrids of rice and wheat, GM materials and those obtained by editing gens, the industrial treatment of seeds with biotic and abiotic products, priming and seeds of species with special attributes (niche markets).


Final Comment

    With more than $ 12 billion a year, the USA seed sales business, is the largest in the world, deserving to be observed and analyzed in detail, and for this a convention of the seed industry is a great opportunity considered a must by SEEDnews.
    At the event, we noted the marketing efforts of X TEND and Enlist E3 soybeans from Monsanto and Dow AgroScience, and their regulatory relationship and partnerships, both in the US and in Brazil. The innovation that are coming will affect the seed business in a large scale.
    The communication trends in the seed world are going through great transparency of the seed history, with adoption of the 2D Bar Code, as well as a greater appreciation of the professionals who work in the sector.
    In terms of technology, it is noted that the industrial treatment of soybean seeds covers 70%, in which farmers do not carry out the treatment on the farm. That is, 30% of the soybean seed is not treated.
    On the other side, the innovations that we highlight are the gravity table in terms of innovation, we highlight the gravity table, which practically does not need to be fixed to the ground to perform its function, and the spiral separator, which can be adjusted to minimize separation losses.
    Participating in an event focused on the seed industry, with its aspirations, challenges and opportunities, is something that really motivates, for all the opportunities that it offers.

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