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Seeds: March 2003
U.S. Planting Seed Consumption Estimated at $7.5 Billion; Up 50 Percent From 1992
Note: No
single source exists, so the following methodology was used to estimate U.S.
seed consumption: For maize,
oilseeds, other feed grain and cereals, cotton and sugar beets, consumption
estimates were calculated on yearly cost of production data (seed cost per acre)
and area harvested. Area planted
was not used because it is not available for other countries and the ultimate
goal is to build a worldwide database. Ignoring abandoned area could make these
crops’ seed markets underestimated by as much as 10 percent in some years.
For horticultural seeds and pulses (beans and peas), a ratio of total
seed market value to the value of total production was estimated using the
Bureau of Economic Analysis Input-Output 1997 benchmark data (the ratios are
0.05 for sugarbeets and floraculture, 0.09 for beans, lentils and peas, and 0.08
for vegetables). The ratios were
assumed fixed and applied to the total value of U.S. production (according to
NASS and ERS) for those crops in the years 1992-2002. Turf and forage seed
includes only Kentucky blue grass, fescue, ryegrass, alfalfa, orchard grass and
sudan grass. Production data is available from the agricultural census of 1992
and 1997. The compound annual
growth rate was applied to the years in between.
After subtracting net exports of each kind, the remainder was multiplied
by April prices collected by NASS. Industry
sources have confirmed the magnitudes and trends produced using this methodology
and illustrated above.
The chart above is based on
estimated consumption. The United
States is a net exporter of planting seed, with annual exports and imports of
roughly $800 million and $400 million, respectively. Changes in stocks are hard to estimate, but adding net
exports to the consumption data and assuming small or no changes in stocks puts
domestic planting seed production over $8 billion.
U.S. seed production in 2002 was therefore twice as large as the value of
U.S. cotton production ($3.6 billion according to NASS), larger than wheat
production ($5.9 billion), over half the value of U.S. soybean production ($14.8
billion) and at least a third as large as U.S. corn production ($21.2 billion).
Seed, when considered as a distinct segment of American agriculture or as
a single “crop,” clearly ranks among the largest.
Maize seed is the largest segment
of the domestic planting seed market, valued at $2.2 billion in 2002.
Maize seed has maintained the same share of the total, about 30 percent,
over the past ten years. Turf and forage seed places second, at almost $1.6 billion,
and oilseed for planting (mostly soybean) a close third at $1.5 billion.
These last two segments appear to have enjoyed the most rapid growth
since 1992. Unfortunately, the turf
and forage seed data is the weakest link at present.
The domestic vegetable and melon seed market is believed to be worth
about $685 million, up from $506 million in 1992.
The period 1993-98 was one of
spectacular growth for the U.S. seed market, especially 1996 and 1997. The
introduction and widespread acceptance of biotech soybean seed is a major
factor, as many areas switched from farm-saved seed to purchased seed.
Relatively slow growth in the U.S. seed market since 1998 is due in large
part to intense price competition. Based on the 10-year and 5-year trends in
U.S. seed consumption and trade estimates, a domestic market worth over $9
billion by 2010 appears to be a reasonable forecast, and domestic seed
production of around $10 billion.
U.S. seed exports represent about
10 percent of production. That
proportion has not changed significantly since 1992. Considering that international trade in planting seed faces
more phytosanitary and technical barriers than most commodities, is subject to
rules governing technology transfer, and has been replaced by local production
in many areas due to growing concerns about genetic purity – ten percent is no
small share: U.S. seed exports
represent about one-fifth of world planting seed trade.
The importance of exports to U.S.
seed production despite high barriers to international trade is due to strong
push and pull factors. Push factors
include developments such as industry concentration, biotechnology, and growing
demands from increasingly fewer, larger and more sophisticated farmers.
The time it takes for a new seed product to go from introduction to
obsolescence has been cut in half during the past decade even as the cost of new
product development has increased. Increased
competition has translated into a need for ever-larger markets over which to
spread expenses. The situation has
also increased exports of parent seed which is bred or multiplied overseas
before returning to the domestic market. Off-season
multiplication in the Southern Hemisphere and access to foreign sources of
germplasm are important pull factors that keep trade high relative to production
and use. The high rate of exports,
especially relative to the rest of the world, is testament to the
competitiveness of the U.S. industry in satisfying foreign countries’ import
requirements and meeting foreign demand for high-quality, well-regulated
planting seed.