Corn seed industry landscape ushers in change, industry development stands at a crossroads
A comprehensive perspective on the corn seed market
Looking across the development of China's corn seed industry, it presents the following characteristics: (1) From the perspective of market size, the corn seed market has grown rapidly, with a 9-year compound growth rate reaching 13.8%; (2) From the supply and demand side, oversupply has become the norm in the corn seed industry; (3) From the perspective of production layout, hybrid corn seed production bases have continuously concentrated toward the northwest; (4) From the perspective of commercialization rate, the commercialization rate of China's corn seed has already approached 100%; (5) In terms of price, hybrid corn seed prices have maintained an upward trend.
Variety is king——exploring the “past and present” of corn varieties
Since the reform and opening up, corn varieties have undergone six generations of replacement, and corn yield growth has also gone through two stages: (1) From the 1970s to the 1990s, per-unit yield increased considerably, with an increase of more than 50%, but the increase in planting area was relatively small. The rise in total output was mainly due to increased per-unit yield, and the breeding and promotion of new varieties became the first factor driving the increase in per-unit yield; (2) From 2000 to the present, the growth rate of per-unit yield has declined somewhat, while sown area has increased rapidly. Among the driving factors for higher total output, sown area has played the dominant role.
We believe that the corn seed industry today is at a crossroads of change, specifically: (1) From the perspective of R&D entities, integration of breeding, propagation and promotion has become the trend, and R&D entities are gradually shifting from past research institutes to enterprises; (2) From the perspective of R&D objects, the technological renewal of corn variety products is relatively slow, the promotion area shows obvious polarization, and variety types are also gradually moving away from the situation in which Zhengdan 958, Jundan 20 and Xianyu 335 dominated as a trio. At the current stage, the market urgently needs new elite seeds; (3) From the perspective of variety approval, in recent years nationally approved varieties have been relatively scarce, but the green approval channel has begun to be implemented, and seed industry approval is moving toward marketization.
Corn seed enterprises——wrestling among varieties
At the macro level, drawing on the development path of the international seed industry, we believe that mergers and acquisitions in the industry will be the general trend.
On the one hand, this is due to enterprises' consideration of variety complementarity; on the other hand, it is a strategy for enterprises to rapidly become bigger and stronger.
However, from the micro level of enterprises, the scarcity of new elite varieties and the slowing growth of first-tier varieties have caused clear divergence in the performance of domestic corn seed enterprises in recent years. Denghai Seed Industry has maintained an absolute advantage in both the quality and quantity of self-bred varieties, and its performance is naturally noticeably better than that of other corn seed enterprises.
The vast horizon of corn seed: new varieties rising with the trend VS genetically modified crops unfolding a grand vision. We believe that the corn seed industry is gradually entering a transitional period, and the future corn seed market will welcome changes in two major directions: (1) New varieties rising with the trend. With a certain foundation in promotion area, second-tier varieties that have already passed market testing have an absolute advantage; (2) Genetically modified crops unfolding a grand vision. According to policy direction and successful foreign experience, corn may in the future become the first field genetically modified crop to achieve commercialized planting.