Monday, November 16, 2009

Have you spoken to the sales department?...

Mike Wilson goes boldly into dangerous waters for a farm magazine editor.  In the current issue of Farm Futures he has an excellent story about monopolies on both sides of our value chain, and then an editorial than winds up thusly:
The development of GMO seed took a basic com- modity — seed production — and turned it into a product complete with legal restrictions, even lawsuits against some farmers. Life science companies rightly began to use intellectual property rights laws to protect their inventions, changing the way farmers use those seeds. “We are at a point where a handful of corporations can decide what something is worth without really having a test of the market,” says Richard Oswald, Langdon, Mo.
As a key link in the food chain, farmers need buyers to compete for their commodities. Farmers need input sellers to compete among each other to ensure better efficiencies and more transparency in the marketplace. [More but in an awkward pdf format]

Ya see - this is the advantage of being the editor.  I can imagine the various conversations I might provoke by sending in a column questioning the business practices of the largest advertisers for farm media. 

Especially in the early moments of an increasingly bitter struggle for market share in the seed biz.
DuPont, the second-biggest seed maker, grabbed U.S. sales from Monsanto this year, showing its larger rival that farmers won’t always pay for the most advanced seeds. Monsanto aims to regain market share with corn that contains eight genetic changes and the first update of its herbicide-resistant soybeans in 13 years.
Monsanto Chief Executive Officer Hugh Grant is counting on the new soy and corn varieties to add $1 billion to profit by 2012. A survey of growers early in the harvest now under way indicates the seeds aren’t meeting yield expectations, contributing to an 11 percent decline in Monsanto’s shares the week the results were circulated.
“The distrust that could be building in the market is very negative for Monsanto,” Paul Baiocchi, a senior market strategist at Delta Global Advisors, which manages $1.5 billion, including Monsanto shares, said in a telephone interview from San Francisco.
The new soybeans, known as Roundup Ready 2 Yield, boosted yields 7.3 percent, St. Louis-based Monsanto said today in a presentation. That’s at the low end of the company’s prior forecasts for a 7 percent to 11 percent gain. [More]

There are reasons why farm magazines are pretty slim at times.  Too many pubs chasing variable streams of advertising is one. It is not a trivial exercise to wander into touchy territory such as seed/grain concentration.

On the other hand, it's going to be hard not to comment on an issue that is only going to fester into customer rage this winter IMHO.

Well done, Mike. 

I'm going to applaud from waaaay over here, though.


Anonymous said...

To bad this particular post occurred while so many were busy in the field and unable to read it.
I have always admired Mike Wilsons editorials & I applaud his bravery. I too thought that big "M'" (otherwise know as.."they whose name we dare not speak for fear of lawsuit") had a stranglehold on the farm press. Along that line, boy are they ever assaulting the airwaves now. It's being done under the guise of several different company names but all are owned by they whose name we dare not speak. oh, and farmers may as well enjoy the advertising as farmers are funding it.

John Phipps said...


Sure - rub it in that you are in the field...