THE MARKETING OF SEEDS

How We Get Seeds of Vegetables and Flowers

WILLIAM B. CARTER AND EDWIN P. BUGBEE, JR.

VEGETABLE and flower seeds are produced by a few companies, mostly in special areas, but they follow many paths from the producer to the planter.

Most of our vegetable seeds are grown in the Western States by firms that produce a full line or by specialists who concentrate on a few species.

Some seed companies own land on which they produce a part of their needs. Such farms offer the advantage of complete control, but they do not provide the economic safety of a more diversified farming operation.

The usual practice is therefore to contract production with independent farmers. Most seed contracts are of the bailor-bailee type, wherein the seeds-man is the legal owner of the crop, and all of it is delivered to him.

Contract growing permits the selection of particular areas and even farms that are best adapted to the species. It also facilitates contraction and expansion of acreage as demand fluctuates. It is popular with farmers because it provides a sure market at a definite price, and payment is often made early enough in the fall to help defray harvesting costs for other crops. Furthermore, many seed crops, especially legumes, fit nicely in rotations.

Contract crops are supervised by the seedsman's fieldmen. They advise the farmer on fertilization, irrigation, control of pests, harvesting, and other cultural matters, in order to bring in the best yield of high-quality seeds.

In their peak season, fieldmen may be up at 3 a.m. to direct dusting for insect control. Then they are out checking fields until sundown, about 9 p.m.

They also have the responsibility of writing the acreage contracts and maintaining good relations between the farmers and the company.

The fall months are the busy ones for the producers. Cleaning operations begin when the farmers bring in the harvested crops. Activity in the processing plant soon works up to a fever pitch and continues, perhaps with two or more shifts a day, until all the crops are cleaned.

Many tools and techniques are available for removing dirt, weed seeds, and any other impurities. They include airblasts, gravity separators, flat and cylindrical screens, indented disks, velvet rollers, the fractionating spiral slides, magnetic separators, washers, handpicking belts, and electronic machines that sort seed by color.

Seeds of most species are harvested between September and December and are needed in trade channels almost immediately. Fall planters in the Deep South and wholesalers who must package for distribution to dealers require seeds as early as they can be made ready.

Because of this seasonal pressure, seedsmen must have enough plant and equipment to process almost their entire year's product in just a few months one reason for the relatively low ratio of sales to capital investment that characterizes the seed business.

The commercial grower may receive his supplies of seeds through one of several channels. Some full-line producers solicit business directly from growers and own retail stores in places of concentrated vegetable growing. The stores carry inventory and are a base for sales operations.

The harvested seeds are assembled at central points for packaging and reshipping in combination loads to the retail stores or branch warehouses. This system keeps the seedsman in close touch with the consumer, but it requires heavy investment and commitment to overhead expense.

Other full-line seedgrowers also do central packaging and sell mainly under their own brand, but only through franchised distributors and dealers. They thus take advantage of the greater potential saturation of the market that can be made by firms with a broad range of agricultural products to sell.

The seedsman's salesmen are technical advisers. They make periodic trips with the distributor's men and bring them and their customers up to date on developments. Available capital thus can be spread farther and the rate of turnover can be increased.

A third system is used by certain full-line and specialty seedgrowers who sell bulk, unbranded seeds to wholesale and retail firms that package and sell regionally under their own brand. Here, the seedsman's identity does not become known to the consumer, and his reputation resides within the trade. A great deal of the seed has moved through such outlets in the past 50 years, but the modern trend favors the nationally advertised brand. Its advantages include consistency and uniformity of quality and the use of new merchandising techniques. The middle of the loth century may be the transition period between the dominance of private, regional brands and the general use of the seedgrower's nationally known brand.

Dealers and distributors normally place advance bookings at definite prices with their suppliers. The orders are subject to pro rata delivery in case of short crops but otherwise are firm. Commercial growers (except very large ones) usually buy their seeds just before planting time.

The growers base their estimates of the year's sales partly on orders they receive before planting time, but they must guess what their subsequent sales will be. For beets, carrots, turnips, and other biennials, the guesses must be made 2 years in advance.

The use of seeds fluctuates with weather, the demands for vegetables, and other things. Therefore, and because of the uncertainty as to yields of the seed crops, the amounts harvested by seedgrowers often fail to match their needs. Surpluses and shortages are common in the business.

The situation becomes acute among companies that sell seeds to canners and freezers. Food processors use a lot of seeds and must have particular varieties. Their growing and selling operations are highly competitive. If a canner needs Tendergreen beans to satisfy his growers and his customers and that variety is scarce, he cannot substitute Landreth Stringless, as a home gardener could.

Processors usually place preplanting orders to protect their supplies of certain varieties. But because markets for canned and frozen foods may become glutted, a reduction of the planned production may become necessary. Then the seedsman usually offers to help by agreeing to defer delivery of the contracted seeds for a year.

Another and better approach than acreage reduction is special industry-wide promotion by the food processors to move the surplus off the shelves.

Canners buy their seeds mostly from seedgrowers or large distributors that specialize in vegetable seeds. Delivery normally is made in the spring, shortly before planting time for the crop. The canners charge their growers approximately at cost for the seed as they issue it.

Careful credit management is important for seedsmen serving commercial growers and the processors. The hazards of farming and fluctuations of markets sometimes act to drain off reserves of ready cash in the hands of users of seeds. Credit losses in the business probably are similar to those in other agricultural supply lines, but well above the average of all industries.

Commercial growers, food processors, and their suppliers of seeds have close relationships. They frequently meet with plant scientists of the Department of Agriculture and State agricultural experiment stations to discuss problems of the food industry.

FLOWER SEEDS bought by commercial users are distributed and handled in much the same way as vegetable seeds. Some firms specialize in serving the needs of growers of bedding plants and cut flowers and florists. Other firms maintain separate distributing divisions, whose staffs know the technical requirements of these customers.

Because the income of the commercial user depends to a great extent on the quality of the seeds he plants, the seedsman and the commercial user of flower seeds work together in developing new varieties and improving supplies of seeds to meet the needs of these markets.

Seeds of such flowers as stocks, snapdragons, and sweetpeas are popular with greenhouse growers of cut flowers. Petunias, marigolds, sweet alyssum, and zinnias are important to growers of bedding plants for sales to home gardeners for transplanting.

When a commercial user gets a supply of seeds that perform well, he wants the exact item again until he finds something better. Strict control is needed in all stages of production to assure that seeds for his next purchase will be identical. The place they are grown, the parent stock, and the method of harvesting and cleaning are factors of moment.

The commercial user of flower seeds usually places contract orders for large quantities with distributors to make sure that a crop will be grown for him. Even so, a poor crop may cut down the amount available and force him to look for a substitute.

So also the grower of bedding plants or cut flowers, who insists on seeds from lots that have done well in the past. He may look to one distributor for some flower classes and to other seedsmen for his other requirements. He is reluctant to change his supply of seeds unless he is assured the seed will give similar performance. A slight change in the number of days until maturity, color, or height, can affect his income.

As new strains and varieties are developed, the seedsman wants them tested and tried by the commercial user. If the tests prove that the new item is better, the distributing seeds-man can look for an order. The entire purchaser-supplier relationship is built on cooperation and confidence.

Many pounds of flower seeds are purchased each year by parks, institutions, and estates. These markets are handled much the same as are the commercial growers' market. Several distributing firms prepare catalogs and literature for this trade. Either by salesmen or through direct-mail contact, the seedsman keeps his customers informed of technical advances, techniques, and recommendations. Purchases are usually made on a spot-order basis, but large quantities may be quoted and sold on a bid basis.

Drug companies are large users of certain seeds in their manufacturing or experimental operations. Their requirements are so specialized that each purchase is the product of direct negotiations between the drug company and an experienced grower located in the most advantageous area of production.

The home-garden market for flower and vegetable seeds has been expanding because of the move to the suburbs, the trend to outdoor living, and the increase in population. Distribution of seeds to home gardeners takes many forms.