Ethanol mandates will strengthen demand for genetically modified seeds
Los Angeles, CA (PRWEB) March 15, 2012
The Seed Production industry consists of large corporations that develop and supply genetically modified (GM) seeds to corn, soybean and cotton farmers. GM seeds allow farmers to enjoy larger harvests, since the crops they grow are better adapted to the environment. During the five years to 2012, the federal government enacted the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007. According to IBISWorld industry analyst Nikoleta Panteva, “these acts created demand for ethanol and other renewable fuels, driving the most significant industry growth.” In 2007, revenue jumped 16.4%, supporting the five-year average increase of 8.7% from 2007 to 2012.
Global weather conditions in 2010 and 2011 also pushed revenue upward. Shortages of key commodities like wheat and cotton drove the price of these crops up and increased the world's reliance on US farmers. Demand for seeds also rose, pushing industry revenue up. The lingering high prices and demand are expected to support revenue growth of 10.5% in 2012 to reach $12.3 billion by the end of the year. Further, Panteva says that “market share concentration is expected to increase as an ongoing pattern of merger and acquisition activity continues.” For example, industry leader Monsanto acquired seven companies for its seed operations between 2007 and 2009, including Delta and Pine Land Company, De Ruiter, Cristiani, Agroeste, Aly Participacoes and WestBred. Likewise, in 2010, Syngenta acquired US-based Golden Harvest and Garst seed businesses as well as Maribo Seed International ApS and a field station in Chile to support development projects in its seeds division.
Going forward, the Seed Production industry can expect a more subdued growth pattern. GM crops are largely the norm, with about 90.0% of planted acreage of corn, cotton and soybeans containing GM seeds. Additionally, the rising popularity of organic farming will likely create some roadblocks for seed developing companies. Farmers who grow organic crops do not typically purchase their seeds from suppliers, but they reuse their own after each growing season. Still, federal mandates for increased ethanol production will likely keep industry revenue growing over the five years to 2017.
For more information visit IBISWorld’s Seed Production in the US industry page
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This industry primarily produces seeds for crops, including grains, oilseeds, vegetables and fruit, flowers and miscellaneous crops. Large agricultural companies participate in the industry through their supply of genetically modified (GM) seeds.
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