Seed Today

Boone, IA — While the big seed companie like Pioneer Hi-Bred and Monsanto take down their tents and displays at the Farm Progress Show, their marketing and agronomy people will fan out throughout the Corn Belt to begin a hotly contested battle for the "reduced refuge" corn seed market.

Monsanto - through its DeKalb, Kruger's, Holden's and Fontanelle subsidiaries - was in the market last growing season with its new Smartstax corn.

The product allowed farmers to reduce the government-required refuge for pests from the 20 percent of a field's acreage that has been standard since the dawn of the biotech era in the mid-1990s, to 5 percent.

Pioneer is taking the battle a step forward with its new Acremax, a "refuge in a bag" seed that will allow farmers to do away with refuge entirely for rootworm. They'll still need a 20 percent refuge for corn borers, but since borers can fly the refuge can be up to one-half mile away.

The idea is to enable farmers to break what is an irritating necessity to climb down from the tractor at planting time and change from biotech to non-biotech seeds for certain parts of their fields. Refuges are required so that pests can migrate to the refuges rather than mutate into new forms that resist insecticides and pest-resistance genetic traits in seeds.

"This gets to the heart of the argument about why we need to have refuges and protect against new strains of pests," said Brent Wilson, who oversees sales for Pioneer in Iowa and Missouri.

While the advertising hits the airwaves, websites and printed pages beginning later this week, the big question will be what resistance farmers may put up to spending more money for the next generation of seeds at a time when corn yields are at an all-time high.

Monsanto hopes to have its own refuge in a bag ready for next year's seed-selling season, pending federal regulatory approval.

Monsanto learned a hard lesson last year when it put Smartstax on the market priced about $60 per bag above its previous best lines of hybrid seed.

That put the prices of some bags at more than $400.

Sales were disappointing, and Monsanto was obliged to cut prices on Smartstax.

Wall Street found out and Monsanto executives spent an unpleasant winter and spring fielding nasty questions not only from farmers but also analysts.

"We got some tough feedback from growers," said Monsanto Vice President Robert Fraley. "Smartstax was the largest single launch in seed history. It didn't quite turn out the way we'd hoped."

But Fraley added: "We aren't giving up. Smartstax is a tremendous product. The price premiums will be lower this year, and we will put more agronomists on the ground to help growers."

Pioneer lost its longtime market share lead in corn sales to Monsanto when that company took the lead in biotech in the 1990s. Pioneer officials didn't crow about Monsanto's problems last spring but carefully took note of what happened in the marketplace.

"Our premium pricing for Acremax definitely will be small, probably in the single digits," said Pioneer Vice President Bill Belzer, who has overseen the development of Acremax.

The stakes are huge.

Pioneer has for several years been the prime driver of sales and profits for parent DuPont.

Monsanto, once known as a chemical pesticide and weed control company, now derives most of its revenues and profits from seed sales.

In the past two years, Pioneer has reversed a decade of declining market share, and at the end of the last sales season, the Johnston company was able to boast that it had moved to within 2 percentage points of Monsanto's industry-leading 36 percent share.

"This is an exciting time for seed sales," Belzer said. "Every acre is up for grabs every year."

Both Monsanto and Pioneer shy away from predictions about acreage for their new seeds other than to say that both Smartstax and Acremax will be targeted for the sweet spot of the Corn Belt in Iowa, Illinois and Indiana.

A year ago, Monsanto put out acreage targets for Smartstax. When it fell short, there were repercussions on Wall Street, where the company's stock took a beating.

"We didn't get credit for what was a large launch because we didn't meet certain targets," Fraley said. "We won't make that mistake this year."

Accordingly, Pioneer isn't giving out targets for acreage, nor is it specifying exact prices per bag for Acremax. Seed prices tend to vary according to which hybrid is used and how many genetic traits are combined, or "stacked" in industry lingo.

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