“I can buy seed from 100 different companies but 90 per cent of all the germplasm in it comes from just one company, Monsanto.”
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 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 DOJ, kicked off a year-long series of historical hearings on competition in U. S. agriculture by examining the white-hot prices and the “competitive dynamics in the seed industry” on March 12.
Holding the “first joint Department of Justice/USDA workshops ever on competition and regulatory issues” in Iowa, 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.
The reason is simple: Seed prices have risen faster and further 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 1990-92 equals 100, prices paid for “seeds” in 2006, 2007 and 2008, respectively, soared from 182 to 204 to 275.
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 off 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 Iowa gathering. Pioneer’s new www.choiceina griculture.comInternet effort states its clear, anti-Monsanto purpose by asking visitors to ”Stand up in favour of agricultural innovation, farmer choice, and open seed competition today.”
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 seems to add 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.”
Where has he been, queried an angry Missouri farmer who 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 per cent of all the germplasm in it comes from just one company, Monsanto.”
Whether that’s good, bad or indifferent needs to be fully aired. Anything less will be just more dogs, ponies and blocks of old, frozen political hot air.