b'Rising Supply Chains, Rising Corn Seed PricesExperts look at how changes in the supply chain are causing corn seed price changes. Lisa KopochinskiOVER THE PASTfew years, cornnation of higher prices and seeding rates, seed prices have skyrocketed due toand improved traits. Each of these factors market issuessuch as drought acrosshas trended higher as the expense for North and South Americaand por- planting an acre of corn has increased.tions of the supply chain bolstering andWith higher seeding rates are often increasing prices.overlooked, the trend of higher seed In a Seed World column published ear- expenses is challenging with lean returns lier this year, Jim Schweigert, president of as they were from 2016-2019. Gro Alliancea Wisconsin-based com- However, in 2021, producers have pany that produces some of the high- significant economic signals to push for est quality seed in the industrywrotegreater yields, Widmar adds. that a major rebound in commodityThis might mean buying higher-demand and forecasts for a hot and drypriced genetics, buying more traits, and U.S. summer pushed prices higher, whileincreasing seeding rates. Seed growers drought in Brazil and multiple rounds ofand farmers raising corn, soybeans and frost underpinned a market that lookedwheat that will be used for seed are alsoDavid Widmar works as an economist at to offer improved returns for farmers andfacing challenges. Agricultural Economist Insights.seed companies.But the supply chain was watching,Market Issuessays Schweigert. Input costs chasedWith corn seed prices having rocketed prices for a while. Eventually, they pushedover the past few years due to market close to break even and put farmers in aissues, what can be done to reverse or bind. Seed companies ended up in theslow down the momentum?same position. Higher commodity pricesMany things are going on here, pushed seed costs higher as access- explains Widmar. Part of this is better ing land became more expensive. Otherhybrids and technology and, in turn, supply chain partners sought to bolsteryields. When times are lean in the farm their bottom lines and pushed througheconomy, there are market pressures price increases as well. to keep seed prices (what farmers pay) David Widmar, an economist atlower. Also, some of the cost is outside Agricultural Economist Insights LLC,of a seed companys control, such as says there are several challenges Northtrait fees. A more significant factor is the American seed companies are facing withimprovements in the seeds over time.respect to the rising cost of corn seed. These require an investment of First, producers facing higher seedresearch andin turnincreased prices,Scott Stein is North American Corn Product expenses (dollars per acre) from a combi- which can translate into bigger revenues. Manager Lead for Bayer Crop Science.56/ SEEDWORLD.COMDECEMBER 2021'