11-18-2015 08:04 AM
Corn Seed Costs
http://farmdocdaily.illinois.edu/2015/11/corn-seed-costs-from-1995-to-2014.html "Of all non-land costs for corn, seed costs on a per acre basis increased the most between 2006 and 2014, increasing by 164% percent " "Overall, the increases in seed costs per bushel indicate the proportional increases in seed costs have been higher than proportional increases in yields." "Means of reducing seed costs within farmers' management discretion are somewhat limited. Farmers can purchase lower priced hybrids, with the concern that lower yields will result. Farmers can also potentially reduce seeding populations. However, large seed costs reductions are not possible without one or more seed company significantly reducing seed prices." " Rates of seed costs increases have slowed, leading to prospects of more modest revenue growth for the next several years. Lower growth may be one factor leading to the merger and acquisition discussions between major seed technology companies within the past several months, with mergers potentially leading to growth for the combined company. As this time point, this appears to be the major strategy being contemplated for continuing seed revenue growth. A strategy of lowering seed prices to attract more seed sales does not appear to be being attempted." Schnitkey, G. "Corn Seed Costs from 1995 to 2014." farmdoc daily (5):214, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, November 17, 2015. My conclusion is that while we can trim around the edges, we are stuck with high corn seed costs and the companies have no incentive to lower prices. Factor it in and get used to it, I guess.