FARMERS BUSINESS NETWORK • 2017 SEED RELABELING REPORT SEED RELABELING REPORT
1 (844) 200-FARM • [email protected] • 6009 S. Sharon Avenue, Sioux Falls, SD 57108 • www.farmersbusinessnetwork.com ©2017 All Rights Reserved. This Report may not be copied, reproduced or distributed in any medium without the prior written consent of Farmer’s Business Network, Inc. Contact [email protected] for any publication requests. The sprout logo, “FBN” and “Farmers Business Network” are registered trademarks and service marks of Farmer’s Business Network, Inc. All other marks found in this report are the property of their respective owners. FARMERS BUSINESS NETWORK • 2017 SEED RELABELING REPORT GET A PERSONALIZED REPORT
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EXAMPLE DATA
PFISTER® 3366 - RASS ALSO SOLD AS: MYCOGEN® 2C799 BROBECK™ 54RA14 PRAIRIE BRAND® 6305 - RA DAIRYLAND™ DS-9412 - RA
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©2017©2017 All Rights All Reserved.Rights Reserved. This Report This may notReport be copied, may notreproduced be copied, or distributed reproduced in any or medium distributed without in the any prior medium written conwithoutsent of the Farmer’s prior Business written Network,consent Inc. of Farmer’s Business 2 ContactNetwork, [email protected] Inc. Contact [email protected] for any publication requests. The for sprout any logo, publication “FBN” and requests. “Farmers Business The sprout Network logo,” are “FBN” registered and trademarks“Farmers andBusiness Network” are serviceregistered marks of Farmer’s trademarks Business and Network, service Inc. marks All other of Farmer’s marks found Business in this report Network, are the Inc. property All other of their marks respective found owners. in this report are the property of their respective owners. FARMERS BUSINESS NETWORK • 2017 SEED RELABELING REPORT 1. BACKGROUND Seed selection is one of the most critical decisions that farmers make each year. Seed is one of the largest expenses on the farm, and seed varieties differ greatly in both price and yield potential. Major crops can have hundreds of varieties and hybrids on the market from hundreds of seed companies. Farmers have to correctly select the right seed, optimize its placement in various soils, and select population, treatment, chemical, and fertilizer regimes. Simply put, the right seed can be the difference between profit and loss on the farm.
To make the seed selection even more challenging, farmers also need to contend with a common practice in the seed industry where the same variety is sold under multiple brand names—a practice we call Seed Relabeling. Seed relabeling creates two significant problems for farmers: • OVERPAYING FOR SEED: since different brands often sell the same variety for very different prices, some farmers significantly overpay, perhaps not realizing that other brands sell the same variety at a lower price. • LACK OF GENETIC DIVERSITY: when the same variety is sold under multiple brand names, it is easy for farmers to unknowingly purchase the same variety from multiple brands, while thinking they are buying a unique variety from each brand. This can lead to a failure to establish the genetic diversity that many farmers strive for when selecting their seed lineup.
2. FINDINGS
FBN SM members sent in over 7,500 seed tags, predominantly from corn and soybeans, covering more than 2,550 unique seed products sold by 110 different seed companies. Combined with over 10,000 unique seed invoice records, we were able to examine how common relabeling is and what its impact is on US farmers. By cross-matching 2,550 variety IDs, we found: • 38% of corn and 45% of soybean seeds analyzed were sold by multiple brands. • 63% of FBN members plant relabeled seeds. • 95% of FBN members buy from a seed company that relabels. • Relabeled corn & soybean seeds represent at least a $2.5 billion segment of the market. • 17% of corn and soybean acres are planted to relabeled genetics. • 6.3% of farms purchased duplicate genetics labels, many inadvertently. • Major agrichemical companies can relabel more than 70% of their product portfolios.
©2017 All Rights Reserved. This Report may not be copied, reproduced or distributed in any medium without the prior written consent of Farmer’s Business Network, Inc. Contact [email protected] for any publication requests. The sprout logo, “FBN” and “Farmers Business Network” are registered trademarks and 3 service marks of Farmer’s Business Network, Inc. All other marks found in this report are the property of their respective owners. FARMERS BUSINESS NETWORK • 2017 SEED RELABELING REPORT 3. WHY DO SEED COMPANIES RELABEL?
Seed companies provide many reasons why they relabel seeds. Seed companies may want to increase their product offerings. They may lack the ability or financial wherewithal to develop breeding programs. Some use relabeling as a branding and pricing strategy. Relabeling can also allow seed companies to compete on service or price instead of product features, which can benefit farmers.
The reasons seed companies relabel aren’t all negatives for farmers. However, in practice, relabeling does negatively affects farmers by obfuscating true seed prices and genetic diversity. Transparency in labeling and pricing will help farmers create a more competitive seed industry, maximize diversity, improve seed selection for their agronomic conditions, and build better manufacturer-farmer relationships.
4. WHAT IS SEED RELABELING? KEY TERMINOLOGY
The terminology around seed products can be confusing, and legal definitions often differ from the way these terms are typically used. In this report, we’ll use the following terms: • VARIETY: a variety is a subdivision of a crop that has unique characteristics that differentiate it from other varieties of that crop1. Varieties must be given names (typically by the originator of the variety), and these variety names must be unique (i.e. different varieties of the same crop cannot be given the same name)1. Once a variety name is assigned, it cannot be changed except under exceptional circumstances1. There are few rules—other than the uniqueness requirement— regulating what constitutes an acceptable variety name, and patterns of naming varieties vary by breeders; however, variety names are typically 6-10 digit sequences of letters and numbers. While some seed companies market seed using its variety name, this is relatively uncommon in corn and soybeans. It is also important to note that the variety name applies to the genetics of the seed; it provides no information about seed treatments, or other attributes of the seed such as seed size or germination percentage. These can be important factors for a seed’s yield. • BRAND NAME: seed companies often assign a variety a brand name under which they market that variety. For example, in Dekalb® DKC63-33RIB, “DKC63-33RIB” is the brand name. This brand name typically bears no resemblance to the variety name (which is “A1031855” in the case of Dekalb® DKC63-33RIB). Also, when multiple seed companies sell the same variety, they are not required to— and typically do not—use the same brand name when marketing the seed. • SEED COMPANY: we refer to the seed company as the broader company name most closely associated with the brand. In the case of “Dekalb® DKC63-33RIB”, we refer to “Dekalb®” as the seed company. However, the seed company may not be an independently owned or controlled entity; for example, Dekalb® is part of Monsanto®. • PRODUCT NAME: since some seeds are marketed under their variety name and others are marketed under a brand name, we use the term “product name” to refer to the name under which a seed is marketed.
©2017 All Rights Reserved. This Report may not be copied, reproduced or distributed in any medium without the prior written consent of Farmer’s Business Network, Inc. Contact [email protected] for any publication requests. The sprout logo, “FBN” and “Farmers Business Network” are registered trademarks and 4 service marks of Farmer’s Business Network, Inc. All other marks found in this report are the property of their respective owners. FARMERS BUSINESS NETWORK • 2017 SEED RELABELING REPORT 5. METHODOLOGY: DECODING A SEED TAG
Federal and state seed labeling regulations typically require bags of seed to be labeled with the variety name. We asked FBN members to send us pictures of the tags on their seed bags, and we examined each photo, recording the seed company, the product name, and the variety name (of the primary variety; the refuge variety, where applicable, was ignored). Relabeled seeds were identified when we found the same variety marketed under multiple brand names, as in this example:
• In the tag on the left, the seed company is “Beck’s”, the product name is a brand name (“5140HR”), and the variety name is “10039423.” • In the tag on the right, the seed company is “Seed Consultants, Inc.”, the product name is a brand name (“SCS10HR43”), and the variety name is, again, “10039423.”
It is common for different seed companies selling the same variety to sell it with different treatments. Seed treatment naming codes are not universal and standard across the industry, which makes it hard for farmers to accurately cross compare. Farmers can frequently realize cost savings by treating separately and not buying pre-treated seeds.
©2017 All Rights Reserved. This Report may not be copied, reproduced or distributed in any medium without the prior written consent of Farmer’s Business Network, Inc. Contact [email protected] for any publication requests. The sprout logo, “FBN” and “Farmers Business Network” are registered trademarks and 5 service marks of Farmer’s Business Network, Inc. All other marks found in this report are the property of their respective owners. FARMERS BUSINESS NETWORK • 2017 SEED RELABELING REPORT 6. RESULTS
The response from FBN members was overwhelming—in a matter of weeks, FBN members sent more than 7,500 seed tags, predominantly from corn and soybeans, covering more than 2,550 unique seed products sold by 110 different seed companies.
The extent of seed relabeling was even more widespread than we anticipated: we identified more than1,035 unique corn and soybean seed products (more than 40% of the products we collected data for), from 69 seed companies, that are relabeled. One corn hybrid is sold by at least 12 brands! The graphs below shows the percentage of corn and soybean products that are relabeled, and the percentage of corn and soybean seed companies that engage in relabeling for at least some of their products:
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