Monday, October 13, 2008

Mikkel Pates

The region has a wide variety of about 20 to 25 primary crops and seed sources vary significantly.

Seed cost is historically only 6 percent of the total cost of growing wheat, 14 percent of the cost for growing corn and 17 percent for soybeans, but is a competitive business.

Ken Bertsch, North Dakota state seed commissioner, and his deputy, Steve Sebesta, lead a state seed department that certifies more acres of seed than any similar agency in the United States, and they offer these observations about the industry.

Spuds and beets

Potatoes and sugar beets are two signature crops for the Red River Valley, both with unique seed systems.

For potatoes, the seed business is less dominated by national or international companies, and most of the crop is grown from public university breeding programs.

Sugar beet seed was the headline news in the region in 2008, with Roundup Ready technology. Legal since 2005, Roundup Ready beets allowed for production on a broad scale only this year. Nationwide, more than half of the acres grown to beets this year were planted to the herbicide-resistant varieties.

The price of beet seed stayed roughly the same, but a "technical agreement" with Monsanto costs extra. The extra cost then is offset by less herbicide cost, as well as fewer trips across the field and less labor.

All sugar beets in the valley are grown for two cooperatives (American Crystal Sugar Co., Minn-Dak Farmers Cooperative), which are major players on the national scene in sugar marketing. The co-ops approve a list of varieties, and growers are allowed to plant beets from within that list. Parent companies all are based in Europe. That`s largely because the industries started in Europe where beets traditionally have been a larger crop than in the United tates.

It may be surprising that no sugar beet seed is grown in the Red River Valley.

Beets are a "biennial" crop, meaning they produce seed only once every two years. Red River Valley farmers never see the seed grown because they harvest beets in their first "vegetative" year. Beets for seed are planted in the Klamath Valley of Oregon in August and September, then overwinter without freezing, only to "bolt" for a seed crop the next year.

About half of the Red River Valley beet is grown from "raw" seed and the other half in round "pellets" of a sawdustlike inert material. Much of the beet seed comes in seed "count boxes," that may contain 400,000 or 500,000 seeds, but some comes in "mini-bulks."

Potatoes are another outlier - the only crop grown from tubers - technically a "vegetative" source, and not seed production. The region grows potatoes for making into French fries (Simplot; Cavendish Farms, Lamb Weston) as well as potatoes for the "fresh" market (Ryan Potato Co., Associated Potato Growers among them) and chipping (Barrel O`Fun, Old Dutch Foods).

The North Dakota State Seed Department has one of the few tissue culture operations left in the nation. The lab takes officially "named" varieties and clones them. Small seed "cuttings" are produced in a test tube and transplanted in the greenhouse, where plants are harvested for "minitubers." Most of this "nuclear" seed goes to Grenora, N.D., where a specialized farm plants them as so-called Generation-Zero, or "G-Zero" minitubers.

The Grenora farm then harvests them as "G-1" seed and they go to a handful of other specialized and isolated seed farms, especially in the Cando, N.D., area. There are three primary "mid-generation" seed producers, who produce mostly G-2 and G-3 seed for sale to commercial growers. Even G-4 and G-5 are planted as seed.

Some very large producer networks own their own system for propagating seed, but all depend heavily on the varieties generated by university programs.

Cereal crops

Spring wheat and barley: these are the two largest-acreage crops grown in the region, and are called "small grains" simply for the size of their seed. (Corn and bean seeds, for example, are larger.)

About 12 million acres of spring wheat alone are raised in North Dakota, South Dakota, Minnesota and Montana. This "dark northern spring wheat" is so-named because it is seeded in the spring.

Spring wheat, typically higher in protein, is marketed (by the state-owned North Dakota Mill, among many others) and is famous in the marketplace as a premier mixing wheat to make bread flour. It`s a specialty crop compared with the nation`s massive winter wheat production to the south. Durum wheat is another story - ground into semolina for making into pasta (locally by Dakota Growers Pasta Co., Noodles by Leonardo and others).

Barley typically is raised to become "malting barley," which is germinated and toasted for making into malt (Anheuser Busch, Cargill, Rahr Malting Co., among the companies).

Seed for all of these grains typically has been developed in breeding programs at North Dakota State University and other institutions in the surrounding states. Each of the beer makers has their own secret recipe, but four main barley varieties are significant to all of the "maltsters." Two are Busch varieties, the rest public varieties.

Some maltsters grow only under contract, or with various "identity preserved" programs.

For wheat and barley both, the seed development system is similar, with seed described at four classes, tending to increase in quantity.

• Breeder seed is - as the name implies - developed by breeders, in a process that can take a decade and can involve selection in winter nurseries across the world, and has strict purity standards.

• Foundation class is grown from breeder seed, andis controlled by the owner, whether NDSU or a private company.

• Registered seed is grown from foundation seed.

• Certified seed is grown from registered seed and is never more than two generations removed from foundation seed.

In the "public" programs, seed is developed at the university and distributed to county crop improvement associations, where it is meted out - first, to a select group of growers and then to the community at large.

There are 600 to 900 producers of certified seed in North Dakota, producing seed for 25 crops and a total of 400 varieties. Some of these growers are under contract with a company. Some grow a large amount of a particular crop. Others are small producers, who grow under contract for regional seed processing companies - often farmers who grow seed and sell it in bulk.

The North Dakota State Seed Department is involved in certifying acres that are grown for seed production.

The self-funded department (through fees) certifies 150,000 to 200,000 acres of wheat for seed, which in turn can plant 3 million to 4 million acres of commercial wheat. There are about 6.5 million acres of wheat grown in the state, so that implies that 30 percent to 40 percent of seed is certified.

The majority of acres?

Those are grown from "farmer-saved" seed, Bertsch says. Some 60 percent of the seed for the state`s largest-acreage crop that is not purchased, but saved.

Seed prices generally follow commodity prices, Bertsch say. In 2007, for example, when wheat prices hit $15 to $20 per bushel, wheat seed prices increased, too. This year, with the commercial market in the $7 to $8 per bushel range, seed likely will be relatively less expensive in the marketplace.

Bertsch, who of course is in the business of certifying seed acres, says certified seed is a "bargain" because this seed provides a historically average 3-bushel-per-acre yield difference over "bin-run" seed - $24 an acre if wheat is at $8 per bushel. Seed producers typically need $2 to $4 per bushel extra to produce seed, Bertsch says, noting that it requires significantly more labor and clean-out for equipment than does ordinary crop production.

Unlike corn and soybeans, genetically modified wheat and cereal crops are not yet commercialized, because of philosophical differences within the industry. Some want the "transgenic" technology to solve specific problems (weeds, drought, disease) while others fear the integrity of conventional genetics and the markets that prefer them.

Row crop biggies

Corn and soybeans are the two elephants here, and both are influenced heavily by large companies (Pioneer, Monsanto, Syngenta among them), often with biotech-enhanced hybrids or varieties. These are international companies and often associated with manufacturers of crop protectants.

Part of this dominance is because the companies have a more sophisticated system of dealers, financial resources for research, and for volume discounts and early-pay discounts that the public programs can`t offer.

Soybeans have become ubiquitous in North Dakota in the past 15 to 20 years, with Cass County now touted as the No. 1 soybean acreage county in the nation - this, despite the state being hundreds of miles from the traditional corn and soybean "belts," which start in southern Minnesota, Iowa and Nebraska.

Companies that develop corn and soybean technology, however, are based in places such as Iowa, where the crops first developed. North Dakota and Minnesota only recently considered "fringe" areas for the growing of these crops, even though they have become quite common here.

Public institutions still produce conventional (non-GMO) soybean varieties. But in corn, public breeding programs don`t produce finished hybrids.

Corn, of course, is a hybrid, so farmers can`t raise it from saved seed. This makes specific traits easy to "enforce" with producer-customers. Seed production is largely farther south, to avoid a possible disaster with early frost.

Soybeans typically are developed and grown in private companies, with seed production farther south to avoid "the big players have taught the industry about technology protection - that technology agreements are to be abided by," Bertsch says. A significant part of the seed sold here is produced in this area.

While the state seed department certifies some soybean seed for private companies, it is generally for the export market. And here, the department does contract work simply checking fields to make sure they meet the "quality assured" standards of a company.

Sunflower is a hybrid as well, so is only grown from purchased seed.

"There is not much sunflower seed production in North Dakota anymore," Bertsch says. "Most of that is done in Texas and California."

The big companies in this game are Mycogen, Monsanto and Pioneer, but also regional companies.


© 2008 Forum Communications Co.