Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
Page 11
Page 12
Page 13
Page 14
Page 15
Page 16
Page 17
Page 18
Page 19
Page 20
Page 21
Page 22
Page 23
Page 24
Page 25
Page 26
Page 27
Page 28
Page 29
Page 30
Page 31
Page 32
Page 33
Page 34
Page 35
Page 36
Page 37
Page 38
Page 39
Page 40
Page 41
Page 42
Page 43
Page 44
40SeedWorldThetur.and.oragegrassseedindustryissmallwhencomparedtothemajorgrainandanimalagriculturesectors.Howeveritisnonethelessimportanttoasliceo.theagricultureindustry.Theepicentero.thisindustryistheWillametteValleyinOregon.Itisinthisvalleymeasuringabout120mileslongand30-50mileswidethatjustover50percento.theworldx19scommerciallytradedtur.and.oragegrassseedisgrown.Ichosethewordx1cepicenterx1d.oritsre.erencetoearth-shakingevents.TheGlobalFinancialCrisiso.2008sentshockwavesthroughtheindustrycausingarippleo.fnancialpainanduncertainty.ortur.and.oragegrassseedcompaniesthroughouttheworld.ButitwasintheWillametteValleywherethemostsignifcanteconomicdamageoccurred.Whilethesuddendropinthevalueo.securitiesmortgage-backedsecuritiesandcollateralizeddebtobligationstiedtorealestateespeciallyhomevaluesisusuallyseenasthetrigger.ortherecentfnancialcrisistheeventso.September2008seto..adropininventoryandcropvaluesthatwasgreaterinpercentagethanthedropinrealestatevalues.Worldwideproductionandconsumptionwereattheirhighestlevelsin2006-2007andseedpriceswereescalating.HoweverinjustoneweekinSeptember2008over144billionwaswithdrawn.rommoneymarketmutual.undsintheUnitedStates20timesthenormalrateinaperiodo.uncertainty.Theimpactonseedordersandshipmentswasimmediate.Manyo.mycolleaguesinthebusinesssawsalesandcontracts.or.uturedeliverydrop35-50percent.Inventoryvaluesalsodroppedimmediatelyandthevalueo..uturecontractscameintoquestion.Estimateso.thedropininventoryvalues.orWillametteValleygrowersproducersandseedcompaniesin2008-2009are175-200milliondollars.A.terthreelongandpain.ulyearsweareemerging.romtheGFC.Wemustemploythebestnewstrategieswecanimplementinordertoavoidarepeato.ourrecentpain.ulandcostlyexperience.Iamremindedo.thewisecounselo.anEmerging.romtheGlobalFinancialCrisisearlierwritero.thiscolumn.Inx1cSurvivingtheNext25Yearsx1dx14printedintheDecember2010issueo.SeedWorldx14RurikHalabyo.AgriCapitalCorporationwritesx1cThewaytosurviveisamindsetbeadaptable.Anticipateandwelcomechange.AndthebestinsuranceBeadequatelycapitalizedandyourbankerwillcallyouupandinviteyoutolunchx1dInthetur.and.oragegrassseedbusinesswehaveo.tennotpaidmuchattentiontobeingadequatelycapitalized.Perhapsourbiggesterrorisin.ailingtoaccount.ortherisksinherentinmulti-yearproductioncontracts.Duringthepastthreeyearsworldwideproductionhasdroppeddramaticallyinresponsetothelacko.demandandtheemptyingo.thesupplychain.Howeverasweemerge.romtheGFCitisimportantthatwerememberhowpain.ulitiswhenassetssuchasseedinventoriesandcurrentproductionlose30percent50percentoreven65percento.theirvalue.Suchlossesweretypicalduringthe2008-2009cropyear.Remainingfscallyresponsibleandplanningwithrealisticsalesandproftgoalsinmindwillbethemarko.a.orward-lookingtur.and.orageseedbusiness.Remainingwellcapitalizedandtakingmeasuredandappropriaterisksshouldleadtosuccess.Whendemandappearsweinthegrassseedbusinessareo.tentooquicktorespondbyputtinginproductionacreshopingwecantakeadvantageo.thatincreasingdemand.Whilehopeisagoodattitudetomaintainthecreationo.realisticgrowthplanswithproftabilityinmindisabettergoal.PerhapsIshouldcallmybankerandtakehimtolunch.MikeBakerGeneralManagerPenningtonSeedInc.OregonDivisionAfterthreelongandpainfulyearsweareemergingfromtheGFC.