Drought-hardy Corn Seed Sales to Jump

16.09.2012 -

Syngenta, the world's largest agrochemicals firm, expects to significantly ramp up sales of its drought-tolerant corn seeds in the United States as a historic drought ravages the nation's grain belt.

Chief Executive Michael Mack said Syngenta was targeting about 400,000 acres planted in 2013 with the firm's Agrisure Artesian variety after a limited roll-out this year on about 15,000 acres.

Syngenta says Artesian seeds improve yields by about 15% over non-drought tolerant corn varieties. But this year's launch has coincided with the worst drought in more than half a century, which has slashed nearly 5 billion bushels off the U.S. corn crop, or about $40 billion-worth at today's prices.

Mack was cautious in offering any indication on how the variety has performed, particularly since the crop was still in the ground, and pointed to the intensity of the drought.

"This year is such an extraordinary year, it serves a purpose to raise the topic but it doesn't serve a purpose to think that you can just drop in some technology and it can withstand such a situation," he said in an interview.

"It just won't."

Chicago Board of Trade corn futures hit a record high of $8.43-3/4 per bushel last month as the worst drought in 56 years across the U.S. Midwest scorched corn in its key yield-determining pollination phase.

Dwindling corn stocks and soaring prices have sparked global concerns about a repeat of the food price riots in 2008 that brought down governments.

French President Francois Hollande has launched a global campaign to win support for creating strategic stockpiles of agricultural commodities, he said on Tuesday, one of the boldest measures yet to tame volatile food prices.

Syngenta, among the world's top four seed firms, says Agrisure Artesian corn uses water more efficiently and can better withstand drought-stress, minimising crop losses.

GM seeds not a silver bullet

Seed companies, including Monsanto, have focused on developing drought-tolerant crop varieties, particularly GM corn and soy, as the planet heats up and food demand grows.

Monsanto won approval late last year to sell GM drought-resistant corn in the United States.

"It is still too early to know how well the drought-tolerant corn varieties fared this year as harvest has only just begun," said John Baize, president of John Baize and Associates, a U.S. agricultural trade and policy consultancy in Virginia.

"I assure you farmers will buy the drought tolerant varieties if they are found to have been successful," he said in an e-mail. "This will allow corn to spread more to the west in areas that receive less rainfall."

That could help Syngenta expand its Artesian acreage. This year corn was planted over 96.4 million acres, the highest in 75 years.

It is a mistake to see GM seeds as the total answer to coping with extreme weather or boosting yields, Mack said.

"Many people think it's a silver bullet. It isn't," he told Reuters during a brief visit to Singapore.

"Drought-resistance technology is real today but is real to the tune of 10 to 15%. It's not real to the tune of 200 and 300% (yield). It's incremental technology."

The real lesson from the 2012 drought was the speed at which bad weather wreaked havoc on corn yields, just months after initial predictions of a record crop, Mack said.

Increasing weather volatility would probably lead to higher food prices by affecting more growers, he added. Solutions included better trade, better technology and an end to national food self-sufficiency policies that block trade.

"We need to promote more trade so that the bad weather in one place is offset by the good weather in another," Mack said.