2012 Analysis of China's Domestic Corn Seed Market
Today we introduce the 2012 analysis of China's domestic corn seed market, hoping it will be of help to everyone. According to Ministry of Agriculture data, the hybrid corn seed production area in 2011/2012 was 4.1 million mu, producing 1.36 billion kg of seed, plus 400 million kg in inventory, for a total available seed supply of 1.76 billion kg. Based on a 2012 corn planting area of 500 million mu, the seed requirement is 1.10 billion kg, leaving a surplus of 660 million kg. This is a year of strong oversupply in corn seed, and the seed market will see a fierce sales battle.
Two varieties remain in strong demand
Zhengdan 958 and Xianyu 335 will still dominate this year's seed market, with their areas unchanged and possibly continuing to increase.
Zhengdan 958, with its advantage of tolerance to dense planting and high yield, has spanned a decade of the new century. In the past two years, some regions suffered natural disasters from wind, flooding and drought, and Zhengdan 958 showed relatively good comprehensive resistance and adaptability, with its area recovering somewhat. This year it will still be the variety with the largest planting area nationwide, but Zhengdan 958 has high moisture content at harvest and a relatively low grain purchase price, so in the Northeast region it cannot recover its former dominant position of previous years.
Xianyu 335 is early-maturing, dries down quickly, has a high shelling rate, good commodity quality, and is suitable for mechanized harvesting, so farmers still favor it strongly; last year its planting area was about 50 million mu. However, in parts of Jilin, wind and rain disasters caused lodging, and in some areas it was refused for planting due to poor "feeding results," so Xianyu 335's planting area is expected to decrease slightly this year.
New varieties win praise but not sales
In recent years, corn breeders have used Zhengdan 958 or Xianyu 335 as benchmarks, and variety regional trials have also used them as controls. Generally, yield must exceed them by 5% to pass approval. But exceeding this indicator is very difficult! So regional trial and approval departments each set their own rules, for example changing it to exceeding by 3%, and later simply blurring the control varieties, or lining up the tested varieties and admitting the top few, so the "outstanding ones" surfaced. But no new variety has yet been found that exceeds or replaces Zhengdan 958 or Xianyu 335. Around the Spring Festival, some companies conducted publicity and built momentum, claiming that newly approved varieties "surpass 958" and "defeat 335," falsely saying they had already been planted on several million mu. Farmers have been cheated many times by "super corn" and "ton corn" and still have lingering fears, so such new varieties win praise but not sales.
Increasing "rebates" to compete for dealers
Because years of oversupply have created a buyer's market for seed, many companies, in order to compete for customers, commonly adopt a so-called "rebate marketing" model, that is, seed multiplication companies leave a certain profit margin for distributors. A few years ago, the rebate was generally 2-4 yuan per kg of corn seed. This year seed is markedly oversupplied, and the appetites of wholesalers and distributors are growing day by day, with ever greater demands for "rebates," which have increased to 6-8 yuan per kg of seed. Some regions practice single-seed planting, with a sowing rate of about 1.5 kg per mu, and each bag (one mu) sells for 30-40 yuan, or in some areas 50-60 yuan per bag, with rebates as high as 15-20 yuan per bag. Some companies announced that reaching certain targets would be rewarded with a minivan. Wholesalers, distributors and consignment sellers are all excited and willing to sell varieties with higher rebates, even if the variety is not particularly excellent. One distributor spoke frankly: "Think about it! Annual sales volume is fixed. Selling 1 kg of high-priced seed earns twice as much money as selling 1 kg of low-rebate seed."
The terminal market stages a "gift war"
Corn seed terminals continue to sink downward. Today, in each county in the main corn production areas, there are at least 300-500 distributors, and in some cases 1,000. There are only 20-30 truly genuine varieties; most are counterfeit or mislabeled seed, from large companies, small factories, and also locally named and bagged ones. Variety names are numerous, chaotic and miscellaneous, and operators tacitly understand this. Fierce sales competition reaches townships, towns and villages. Seed sales publicity vehicles can be seen everywhere, laid out with all kinds of giveaways (overcoats, jackets, cotton-padded trousers, rice cookers, etc.) and even tables set for drinking. Sales methods have evolved from variety competition into a "gift war" and "liquor war" of profit-concession competition. Previously farmers begged merchants to sell seed; now merchants beg farmers to buy seed. Seed prices are polarized. Experienced farmers realize that "being greedy for small gains leads to big losses" and will not buy easily, waiting instead for price cuts.