The National Association for Stock Car Auto Racing, better known as NASCAR, often brags that it’s the only sport in the world to begin every new season with its all-star game, the year’s biggest, richest race, the Daytona 500.
If so, it was only so until this year when a couple of other outfits also well-known by their initials, USDA and the U.S. Department of Justice, kick off a yearlong series of historical hearings on competition in U.S. agriculture March 12 by examining the white-hot prices and the “competitive dynamics in the seed industry.”
Holding the “first joint Department of Justice/USDA workshops ever on competition and regulatory issues” in Iowa, the heart of corn and soybean country, just weeks before every seed-buying farmer in America will be pedal-to-the-metal planting this year’s crop is bigger than Daytona, bigger than the All-Star game and bigger than the Super Bowl. In fact, it’s the Big Tuna, the Big Casino and the Big Swim of all ag competition issues rolled into one.
Why?
The reason is simple: Seed prices have risen faster and farther than any farm input. Only two others, fuel and fertilizer, have come close, but both fell swiftly last year when global market forces undermined each. Not so, however, with seed.
According to USDA data where average prices paid by farmers in 1990-1992 equals 100, prices paid for “seeds” in 2006, 2007 and 2008, respectively, soared from 182 to 204 to 275.
No relief in sight
Then, in 2009, the industry raised prices again and the index rose to a fat 304. In short, seed prices almost tripled in four years and, unlike other big input markets, now show no sign of backing — or even letting — up.
For their part, the seed giants know they have a great gig and all want to come out of the Iowa workshop as they go in — untouched and in charge.
Most, especially market leader Monsanto and its chief rival Pioneer, have spent time and money to lay the groundwork for such a result. Interestingly, the two fierce rivals launched their own versions of charm offensives just prior to the Iowa gathering.
Pioneer’s new www.choiceinagriculture.com Internet effort states its clear, anti-Monsanto purpose by asking visitors to “stand up in favor of agricultural innovation, farmer choice and open seed competition today.”
Response
Monsanto hasn’t taken the slap kindly. Its boss, Hugh Grant, fired back in two stories published in the Feb. 28 Des Moines Register. In one, Grant appears to recognize Monsanto’s “bad boy public image;” in the second, he adds to it by likening Pioneer, locked in a fierce patent fight with Monsanto, to “the teenager at the Greyhound bus station who suddenly doesn’t think it was such a good idea to have run away from home.”
Even more remarkable than this public washing of the industry’s dirty laundry, John Block, USDA boss under Ronald Reagan, jumped into the upcoming seed debate with an editorial that compared current seed prices to prices for “today’s cars,” which, in pointing out the blindingly obvious, “cost dramatically more than 15 years ago.”
What’s more, he adds, antitrust investigators should stop worrying “about one or two companies dominating the market” because at his home farm in Illinois, “we’re buying our seed from seven different producers this year.”
One reaction
An angry Missouri farmer telephoned to object to Block’s narrow view of the most concentrated market in agriculture. “I can buy seed from 100 different companies but 90 percent of all the germplasm in it comes from just one company, Monsanto.”
Whether that’s good, bad or indifferent needs to be fully aired March 12. Anything less will be just more dogs, ponies and blocks of old, frozen political hot air.
