SEED RELABELING REPORT 1 (844) 200-FARM support@farmersbusinessnetwork.com 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 marketing@farmersbusinessnetwork.com for any publication requests. The sprout logo, FBN and Farmers Business Network are registered trademarks and
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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. 3
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 crop 1. 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 circumstances 1. 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. 4
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. 5
Percent of Seed Products Relabeled Percentage of Seed Companies that Relabel 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 than 1,035 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: Seed Product Relabeling by Crop Seed Company Relabeling by Crop 50 40 45% 80 60 71% 79% 30 38% 40 20 10 20 0 CORN Crop SOYBEAN 0 CORN Crop SOYBEAN We believe these to actually be underestimates of the true extent of relabeling, because not every seed product on the market is covered by our seed tag dataset. 6
7. WHICH SEED COMPANIES RELABEL? For each seed company in the dataset, we calculated the percentage of products that are relabeled (i.e. also sold under other brand names by other seed companies). Only seed companies for which we have at least 5 unique products for a crop are included in that crop s table. These percentages are a percentage of the total number of products for which we collected data for each seed company, not the total number of products that seed company sells. CORN SEED COMPANY RELABELING RANK SEED COMPANY PERCENTAGE RELABELED NUMBER OF SEEDS ANALYZED 1 GREAT LAKES 96% 24 2 FRONTIERSMEN 94% 16 3 PRODUCERS HYBRIDS 92% 49 FULL RANKINGS AVAILABLE EXCLUSIVELY TO FBN MEMBERS! 4 ALLEGIANT 92% 12 5 SEED CONSULTANTS 86% 14 6 LEWIS 86% 14 7 HEFTY 86% 14 8 PFISTER 85% 13 9 PHOENIX 80% 5 10 DAIRYLAND 79% 14 11 LG SEEDS 78% 46 12 AGVENTURE 78% 18 13 LATHAM 77% 22 14 NK 75% 24 15 ROB-SEE-CO 73% 15 16 PRAIRIE BRAND 73% 11 17 HOEGEMEYER 71% 14 18 INTEGRA 70% 10 19 DYNA-GRO 69% 36 20 WENSMAN 68% 37 21 REV 67% 6 BECOME AN FBN MEMBER TO SEE WHICH BRANDS RELABEL THE MOST! 22 AXIS 67% 9 FULL ANALYSIS ON OVER 50 BRANDS WHICH BRANDS SHARE WITH EACH OTHER PERSONALIZED RELABELING ANALYSIS FOR YOUR FARM 23 PETERSON FARM SEEDS 67% 12 24 CURRY 64% 22 25 AGRIGOLD 62% 72 26 THUNDER 62% 8 PROTECT YOURSELF BEFORE YOU BUY SEED! 27 KRUGER 62% 16 28 INNOTECH 62% 13 7
SOYBEAN SEED COMPANY RELABELING RANK SEED COMPANY PERCENTAGE RELABELED NUMBER OF SEEDS ANALYZED 1 STONE 93% 14 2 GREAT LAKES 92% 12 3 KRUGER 91% 11 FULL RANKINGS AVAILABLE EXCLUSIVELY TO FBN MEMBERS! 4 PRAIRIE BRAND 86% 22 5 LEWIS 83% 6 6 MUSTANG 83% 6 7 PRODUCERS HYBRIDS 81% 16 8 SEED CONSULTANTS 80% 5 9 MERSCHMAN 80% 5 10 TITAN PRO 80% 10 11 AGVENTURE 78% 9 12 FRONTIERSMEN 78% 9 13 DYNA-GRO 76% 21 14 GOLD COUNTRY SEED 75% 12 15 HOEGEMEYER 75% 8 16 CREDENZ 73% 11 17 MYCOGEN 73% 22 18 LG SEEDS 72% 18 19 RENK 71% 17 20 CURRY 69% 13 21 DAIRYLAND 69% 13 22 PETERSON FARM SEEDS 67% 15 23 HEFTY 65% 31 BECOME AN FBN MEMBER TO SEE WHICH BRANDS RELABEL THE MOST! 24 WENSMAN 61% 18 25 SPECIALTY 60% 10 FULL ANALYSIS ON OVER 50 BRANDS WHICH BRANDS SHARE WITH EACH OTHER PERSONALIZED RELABELING ANALYSIS FOR YOUR FARM 26 BRODBECK 60% 5 27 NUTECH 58% 19 28 PFISTER 56% 9 PROTECT YOURSELF BEFORE YOU BUY SEED! 29 AGRIGOLD 55% 22 30 CHANNEL 53% 43 31 STINE 52% 64 32 CROPLAN 42% 40 33 FEDERAL HYBRIDS 40% 5 8
Percent of Products Relabeled FARMERS BUSINESS NETWORK 2017 SEED RELABELING REPORT 8. RELABELING BY SEED COMPANY GROUP We clustered seed companies into various groups based on their corporate affiliations, and calculated the estimated percentage of products sold by seed companies in each group are relabeled. Determining seed company ownership is not always straightforward. For example, from looking at the website of a seed company such as Hoegemeyer, it would appear to be an independent company. However, by inspecting the Privacy Policy posted on Hoegemeyer s website, or by visiting this site on DuPont affiliated companies, it becomes clear that Hoegemeyer is actually owned by DuPont. MAJOR SEED COMPANY GROUPS AND RELATED BRANDS MONSANTO : Asgrow, Channel, Dekalb, Fontanelle, Gold Country Seed, Jung, Kruger, Lewis, REA Hybrids, Speciality, Stewart, and Stone. DUPONT : Agventure, Curry, Hoegemeyer, Nutech, Pioneer, Rev, and Seed Consultants. DOW : Brodbeck, Dairyland, Mycogen, Pfister, and Prairie Brand. AGRELIANT : Agrigold, Golden Acres Genetics, Great Lakes, LG Seeds, Producers Hybrids, and Wensman. SYNGENTA : Enogen, Golden Harvest, Innotech, NK, and Phoenix. BAYER: Credenz (soybeans only). RETAIL: Allegiant (CHS ), Croplan (Winfield ), Dyna-Gro (CPS ), Hefty, and Integra (Wilbur-Ellis ). INDEPENDENT: all other seed companies Corn Relabeling by Seed Company Group 80 60 40 20 75% 68% 54% 53% FULL RESULTS AVAILABLE 51% 49% EXCLUSIVELY TO FBN MEMBERS! 31% 21% 20% 0 AGRELIANT DOW DUPONT (EXCLUDING PIONEER ) SYNGENTA RETAIL MONSANTO (EXCLUDING DEKALB & CHANNEL ) INDEPENDENT DUPONT MONSANTO Seed Company Group 9
Percent of Products Relabeled FARMERS BUSINESS NETWORK 2017 SEED RELABELING REPORT Soybean Relabeling by Seed Company Group 80 60 40 20 75% 72% 69% 69% 67% FULL RESULTS AVAILABLE EXCLUSIVELY TO FBN MEMBERS! FULL RESULTS 56% AVAILABLE EXCLUSIVELY TO 42% FBN MEMBERS! 41% 34% 16% 0 BAYER DOW MONSANTO (EXCLUDING ASGROW ) DUPONT (EXCLUDING PIONEER ) AGRELIANT RETAIL MONSANTO INDEPENDENT DUPONT SYNGENTA Seed Company Group What the Seed Company Group cluster analysis reveals is that for some large agrichemical companies, the majority of their product portfolios are in fact sold by multiple seed brands - either internal sub-brands or through external companies. Many Seed Company Groups employ the concept of a brand ladder to connote Premium, Regular, and Discount brand values and prices. Sometimes these brands can carry some of the same products. 10
FARMERS BUSINESS NETWORK 2017 SEED RELABELING REPORT 9. SEED RELABELING AFFECTS MOST FARMERS 63% of FBN members who grow corn or soybeans have previously planted at least one of the more than 1,000 relabeled products, and 95% have planted seeds from at least one of the 69 seed companies that relabel. 10. RELATIVE MATURITY DIFFERENCES We found that when multiple brands sell the same variety, 48% of the time, the brands selling that variety do not all market the variety under the same relative maturity (RM). The lack of standardized RM methodologies and ratings can easily lead farmers astray. We observed differences as high as 3 units in corn, and as high as 0.4 units in soybeans. In this example below, the same soybean variety is marketed as 0.5 relative maturity by Thunder but 0.9 relative maturity by Pioneer : 11
11. THE VARIETY NOT STATED EXCEPTION In certain states and for certain crops, it is legal for seed companies to omit the variety name from the label, in which case they are required to list Variety Not Stated to make it clear that the identity of the variety is being withheld. Variety Not Stated labeling is uncommon in the seed industry, but some companies take full advantage of this exception. Only 21 seed companies (19% of all seed companies in the dataset) omitted the variety name from some of their products, and overall, only 68 products, or about 2.6% of the products examined, were unable to be analyzed due to the manufacturer s choice to not list the variety identity using Variety Not Stated labeling. The companies who used Variety Not Stated labeling most commonly are identified here: RANK SEED COMPANY PERCENT OF PRODUCTS WHERE VARIETY NOT STATED NUMBER OF SEEDS ANALYZED 1 FS SEED 100% 14 2 CORNELIUS 77% 13 3 BURRUS 42% 12 4 HOEGEMEYER 36% 36 FULL VARIETY NOT LISTED RESULTS AVAILABLE EXCLUSIVELY TO FBN MEMBERS! 5 AGVENTURE 27% 37 6 PARTNERS BRAND 22% 9 7 MUNSON 11% 9 8 SEED CONSULTANTS 5% 20 12
12. LARGE IMPLICATIONS FOR FARMERS Seed relabeling creates problems for farmers in two ways. Farmers overpay for seeds when they purchase varieties that other brands sell for a lower price, and farmers fail to genetically diversify when they inadvertently purchase the same variety from multiple brands. We examined each of these issues to quantify how often, and to what extent, they affect farmers. 1. OVERPAYING FOR SEED: We combined our seed relabeling dataset with our dataset of farmer-contributed seed invoices, which contains more than 10,000 seed price records, to estimate how much money seed relabeling costs American farmers. For every relabeled variety with corresponding price data, we calculated the average price per bag (after discounts, but before treatments) for all the brands selling that variety. For corn seed, the worst price difference within a state between identical relabeled seeds was $97/bag (a 35% difference). For soybean seed, the worst price difference within a state between identical relabeled seeds was $19/bag (a 32% difference). To estimate how much farmers spend on relabeled seed nationally: we multiplied the average seed spend per acre among FBN farmers by the total number of corn (or soybean) acres in the US, and then multiplied by the percentage of acres planted to relabeled varieties (about 17% each for corn and soybeans). American corn farmers spend about $1.8B on relabeled seed annually. American soybean farmers spend about $778M on relabeled seed annually. These estimates only consider the total seed cost after discounts, reported on farmer-contributed seed purchase invoices. They do not consider other costs, such as those associated with lack of genetic diversity and pest resistance. 2. LACK OF GENETIC DIVERSITY: 6.3% of farmers who contributed seed tag data had purchased the same variety from multiple brands. Most purchased the same variety from two brands, but a handful purchased the same variety from three brands. Several FBN members were unaware that they had purchased the same variety from several brands, and expressed concern when learning that their attempt to achieve genetic diversity on their farm was, in reality, just purchasing the same genetics under different names. 17% of acres in FBN were planted with relabeled varieties. This concentration of genetics across such large acreages also creates unnecessary disease, pest, and weed resistance. 13
13. RELABELING VS. GENETIC LICENSING Our study found remarkable genetic overlap between seed products on the market. However, these numbers are an underestimate of the true extent of genetic similarity of commercial seeds. We only considered seed products that are genetically identical, i.e. the same variety. In addition to relabeling, seed companies frequently license parental genetics to other seed companies who then use those varieties in their own breeding programs. Consider the following scenario. A seed company does not sell the licensed variety itself, but instead crosses the licensed variety with a second variety to generate a third, new variety. Farmers have no way of detecting this lineage, since the new variety must have a new variety name that will not indicate which varieties were used in its creation, and seed companies do not publicly release breeding pedigrees. The degree of genetic similarity across seed companies is almost certainly greater than estimated in this report when considering genetic licensing in addition to variety relabeling. 14. USING RELABELING ANALYSIS BEFORE BUYING SEED FBN members who contribute seed tags receive a personalized report identifying other brands that are equivalent to their varieties. In fall 2017, FBN members who contribute seed tags will also be able to access data on which brands sell the same varieties in FBN Seed Finder. REFERENCES 1. https://www.ams.usda.gov/sites/default/files/media/factsaboutnamingvarietiesofseed%5b1%5d.pdf Munson is a registered trademark of Munson Hybrids. Steyer is a registered trademark of Steyer Seeds. Federal Hybrids is a registered trademark of Federal Hybrids, Inc. Stine is a registered trademark of the Stine Seed Company. Mustang is a registered trademark of Mustang Seeds. Seitec is a registered trademark of Seitec Genetics. Legend is a registered trademark of Legend Seeds. Merschman is a registered trademark of Merschman Seeds. Burrus is a registered trademark of Burrus Seed Farms. B-H Genetics is a registered trademark of B-H Genetics. Latham is a registered trademark of Latham Hi-Tech Seeds. Innotech is a registered trademark of Rob See Co. FS is a registered trademark of Growmark, Inc. Cornelius is a registered trademark of Cornelius Seed. Pfister, and Brodbeck are a registered trademark of Dow. Agreliant, Agrigold, Golden Acres Genetics, Great Lakes, LG Seeds, Producers Hybrids, and Wensman are registered trademarks of Agreliant Genetics LLC or their respective owners. Monsanto, Dekalb, Asgrow, Fontanelle, Gold Country Seed, Jung, Kruger, Lewis, REA Hybrids, Specialty, Stewart, Stone and Channel are registered trademarks of the Monsanto Company. Pioneer, Agventure, Curry, Hoegemeyer, Nutech, Rev are registered trademarks of Dupont, Pioneer or their respective owners. Syngenta, Enogen, Innotech, Phoenix, Golden Harvest, and NK are registered trademarks of a Syngenta Group company. Allegiant is a trademark of CHS Inc. Dairyland, Mycogen, Pfister, Brodbeck and Prairie Brand are registered trademarks of Dow AgroSciences. Dyna-Gro is a registered trademark of Crop Production Services, Inc. Integra is a registered trademark of the Wilbur-Ellis Company. Croplan and WinField are registered trademarks of WinField Solutions, LLC. Wyffels is a registered trademark of Wyffels Hybrids. Beck s is a trademark of Beck s Hybrids. Armor is a registered trademark of Armor Seed Company. Hefty is a registered trademark of Hefty Seed Company. DuPont is a trademark of E. I. du Pont de Nemours and Company or its affiliates. DOW is a registered trademark of The Dow Chemical Company. Bayer and Credenz are registered trademark of the Bayer AG. 14
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