Wednesday, October 22, 2014

Giant Views of the Industry: Part Two

Back to part one...

Giant Views of the Industry continued....

Independents Face New Challenges
The increase in the use of new technologies and resulting evolution of the seed industry also brings with it new challenges. Burrus says his biggest challenge right now as an independent seed company is inventory management.

“As we have continued to move aggressively forward with new technology, [we face the question of] what to do with the inventory that was left over from before? Do you discount it? Do you discount it even so you take a loss? Or do you end up after a couple years with it still sitting in the warehouse?” he questions. “As we move towards more and more new technology, inventory management is extremely important—you need to have enough inventory to move forward aggressively and meet customer needs, but not have excess inventory left over.”

Another new challenge for smaller seed companies, coming hand-in-hand with new technologies, is managing stock keeping units, says Burrus. SKUs, as they are commonly called, are the numbers or codes used to identify each unique product or item for sale in a store. “It’s impossible for us to offer every trait package and all genetics with every seed treatment known to man,” says Burrus. “So we need to be able to sort out which of these products are going to respond to the majority of the interest from our customers and then be able to supply those products on a need basis.”

ASTA’s Goals
Any business is only as strong as the industry around it. According to Gumina, the American Seed Trade Association is staying on top of the major issues and has a lot of positive projects underway. “A top project for the next year is how we’re going to deal with expiration of patents and making a very smooth, streamlined pathway into post-patent traits while respecting intellectual property rights,” he says. “Another key focus area is coexistence—how can we create a system where all the parts of agriculture can be successful in producing their products and gaining value from their efforts? I think that’s a really important one—a hot topic—and we’re going to be a leader in that area as well.

Gumina lists trade issues such as adventitious presence and the harmonizing of phytosanitary measures as high on the list of priorities as well. “We will be trying to create systems so we can move seed effectively and focus phytosanitary regulations on science-based decisions. We need to guard against causing any problems for any environment, but irrational regulations cause undue burden for the industry,” he explains.

He is passionate that the association has a tremendous opportunity to really step up in today’s rapidly evolving landscape and become an even better and bigger influence in the overall agricultural process in the United States. “ASTA has really gained a lot of stature in the past few years as a go-to organization in Washington, in the States, for the grower associations and also for commodity groups. We want to build on that reputation and have our voice be heard,” Gumina says.

Navigating an Unknown Future
A rising world population and the challenge of producing more food with less is on the top of everyone’s minds. And the seed industry sits in a perfect position to rise to that challenge.

“If you consider the trends in the global environment—increasing the amount of food but also high-quality food—I think the seed business will grow substantially,” says Breukink. “Seed has become an essential part of the future for global development and we’ll hear a call for more high quality food more and more in many parts of the world. That’s an enormous challenge and the seed industry will play a very important role in that. I can see it growing in at least double figures per year.”

Gumina agrees, but he has no doubt the seed industry can rise to that challenge. In order to meet the challenge, industry will need to deal with the “tension” over the technologies being adopted rapidly. “We need to produce more food on the same or less acres, which means we need to bring technology,” Gumina says. “But there is tension in that some people are resistant to technology. I think we have a challenge to continue to drive technology, continue to drive productivity, while at the same time educating the public on why this is good for them, and how we’re really serving the country, the world and all of humanity, not just for today but also for the future.

“[We also need] to help people understand that the kind of technologies we’re developing are not· like a tap that you turn on and off, but a stream, and you have to keep it flowing· continuously or you lose it. So it is a tension that the entire industry will need to work on through outreach, listening and education. And we’re going to have to work hard on it,” he says.

Julie McNabb

Back to part one...

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