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October 25, 2007
·
Global economics reshape regional seed industry
·
Florida growers suffering ‘brutal’ business climate
·
Shoot out on
biotech farm leaves two dead
·
US food agencies,
industry seek stiff import rules
· Cornell to train African plant breeders
Global economics reshape regional seed industry
(Gilroy Dispatch) –
For the past century, the Gilroy-area (California) seed industry has moseyed
along at the pace of, well, spring blooms. But advancements in technology as
well as global economic pressures are dramatically reshaping the trade.
The increasing role
of major retail chains such as Home Depot, Lowe's and Wal-Mart on seed
manufacturers, the continued consolidation of the competitive landscape and
rapid advances in genetics are keeping local seed developers fleet of foot.
Meanwhile, consumers and farmers are the ones truly coming out ahead when they
purchase a flat of geraniums, the latest broccoli seeds or give a squeeze to
those ripe tomatoes in the produce aisle.
Most of the
benefits consumers enjoy today are crafted behind the scenes along various
points of the seed industry's distribution chain.
"We can no
longer just rely on our plant breeding," said Joel Goldsmith, president of
Gilroy-based Goldsmith Seeds Inc., one of the largest wholesale breeders of
hybrid flower seeds in the world. "We need to provide support to our
brokers, our growers and, increasingly, the retailers. Our involvement reaches
much further down the distribution chain."
On the vegetable
side, the demand for taste and nutrition is driving much of Morgan Hill-based
Sakata Seed USA's breeding efforts, said John Nelson, director of sales and
marketing for Sakata USA.
"Taste and
nutrition is really becoming a factor in the U.S.," Nelson said. "Of
course the demand from the farmer is yield, yield and yield - in that order."
Retailers making
presence felt
For the past 100
years, ever since Linwood Wheeler moved west to Gilroy from Chicago to start a
lettuce seed company with John W. Pieters, the industry has worked pretty much
the same way. Seed brokers would come to the seed developers' annual trials,
choose the seeds they believed the growers they represented wanted and place
orders. Eventually the growers themselves began to attend the trials, making
sure that factors beyond the appearance of the particular flower or vegetable
were addressed.
Will all the seeds
produce uniform-sized flowers - critical to growers who depend on producing
large volumes of plants in as little space as possible? Do the seeds have good
shelf lives so growers can increase or decrease plantings as demand dictates?
Do the seeds have adequate germination rates approaching 100 percent so growers
maximize their production? And has the breeding process maximized the growth
rate of flowers so fewer chemicals - called plant-growth regulators - are needed,
which would contribute to "greener" processes as well as reducing
overhead costs?
Those were the
questions concerning Glenn and Jane Goldsmith when they founded the company in
1962. Their son, Joel Goldsmith, has far more concerns as he and two of his
brothers direct the future of the company.
Today
representatives of retail conglomerates such as Wal-Mart, Home Depot and Lowe's
attend the trials with interests that often differ from the growers. Retailers
are concerned about heartiness of the plants, enabling them to display flowers
for longer periods of time with minimal maintenance while still looking
attractive to the consumer.
Goldsmith,
recognizing the growing influence of retailers, has added a "retail
specialist" to its team of broker and grower representatives.
Another trend
driving retail demand in the vegetable seed market is the increasing ethnic
diversity, particularly in California, and the accompanying demand for ethnic
foods.
"Ethnic
diversity is blossoming and the desire for ethnic foods is growing,"
Sakata Seed's Nelson said. "The world's becoming smaller, requiring the
transfer of products from region to region."
Why the South
Valley?
Following a degree
in genetics at University of California, Davis, and further studies at the
University of California, Los Angeles, founder Glenn Goldsmith pursued a career
in seed production with several companies before he and his wife, Jane,
launched Goldsmith Seeds in Gilroy in 1962. The climate, when not facing
drought years, provides ample warm weather, good soil chemistry and an existing
agriculture support infrastructure - fertilizer and pesticide suppliers,
transportation and expertise from U.C. Extensions and county Farm Bureaus.
Similar attributes
that lured Sakata Seeds America to Morgan Hill.
"The valley is
close to transportation hubs - San Francisco for air export and the Port of
Oakland for shipping - and as a net exporter of seed, transportation is an
important factor," Nelson said of Sakata's decision to make Morgan Hill
the North American headquarters of the company.
Gilroy, Morgan
Hill, and the Hollister and San Juan valleys have been historic prime growing
regions, and with the Salinas Valley 20 minutes south, seed breeders have a
literal salad bowl of options. Sakata is the No. 1 broccoli seed company in the
world and a developer of brocollini, an increasingly popular hybrid of brocolli
and Chinese Kale, and the South Valley and the Salinas Valley are major
brocolli growing regions, Nelson said. Sakata maintains a 40-acre
research-and-development farm in the Salinas area.
More seeds,
fewer companies
Seemingly
everywhere you turn the seed industry is consolidating, and several local
companies are in the middle of it. Fischer, a privately held German company
that sells flower cuttings germinated from Goldsmith Seeds' products (sold
under the marketing name of Goldfisch) was recently acquired for $67 million by
agricultural chemical maker and seed breeder Syngenta AG, also a German
company.
And just to make it
a cozy community, Syngenta, with 2006 global sales of $8.05 billion, also
operates a seed processing facility in Gilroy - which makes Syngenta and
Goldsmith kissing cousins as well as neighbors.
Vegetable seed
maker Seminis Inc., which has a research-and-development operation on Lucy Brown
Road in San Juan Bautista, is a global leader in seeds for commercial fruit and
vegetable growers and supplies more than 3,500 seed varieties to more than 150
countries. In 2005 the company was acquired by the multinational seed, chemical
and equipment maker Monsanto Inc., which posted sales for the three months
ended Feb. 28 of more than $2.6 billion.
And in 2005, Sakata
Seeds USA acquired Calusa-based Qualiveg and its subsidiaries. Sakata Seeds USA
is a subsidiary of Yokohama, Japan-based Sakata Seeds Corp, with 2006 sales of
nearly $380 million. The Morgan Hill headquarters oversees operations in
Canada, the U.S., Mexico and Central America, as well as its research farm in
Salinas.
"The pressure
on a small company for resources to compete in the global marketplace is
enormous," Nelson said. "Research and development costs require a lot
of capital, and if the capital is not there, the small companies will look to
partner up."
In some segments of
the market, for better or worse, more of the world's seed supply is being
developed by fewer and fewer companies. The four largest corn-seed companies,
for example, account for nearly 70 percent of all U.S. corn seed sale,
according to 2004 studies by the U.S. Department of Agriculture, the most
recent figures available. The four largest cotton-seed companies accounted for
90 percent of U.S. sales in 2004.
Global markets
But while
consolidations might seem like the world is closing in on small seed
developers, it is also opening up huge new markets and the ability to develop
seeds in myriad climates and environments.
Goldsmith, for
example, has the lion's share of its production in Guatemala, with additional
acreage in Kenya, Africa. Guatemala, in addition to having lower labor costs
for the 2,000 people Goldsmith employs there, provides a year-round growing
climate. Worldwide, Goldsmith employs 4,000 people on three continents.
"[Guatamala's]
constant, year-round temperatures, reduce the cost of providing heaters in
greenhouses," Goldsmith said.
Goldsmith has
production acreage in several locations, dictated by altitude - nature's
temperature control.
The relationship
between Goldsmith and Guatemala can serve as a model for other seed growers. In
both Guatemala and Kenya, the company maintains health-care clinics for employees
and their families. In 1997 the Guatemalan government presented family
patriarch Glenn Goldsmith with the Guatemala Peace Medallion for retaining seed
production farms there despite the longest civil war in Central American
history.
Meanwhile, Sakata
operates facilities on every continent on the planet, with the exception of
Australia.
The global
marketplace can be a double-edged sword: As seen in the technology industry and
the outsourcing of jobs to aspiring economies such as India, Asian nations can
be major competitors. But they can also be major customers.
The two biggest
markets for Seminis' seeds are China and India, said spokeswoman Mica Veihman.
And roughly three-quarters of the produce grown in the world is grown in Asia.
"The luxury
today is seeing year-round produce in the supermarket," Veihman said.
"More vegetables are coming in from Chile, and we're even seeing Indian
mangos. China and India are exporting a lot, just like they are in the grand
scale."
All of which open
large and lucrative markets for home-grown seed companies.
Frankenstein
plants?
Despite highly
publicized outcry over so-called genetically modified food, seed producers
today are attempting to stay out of that fray. Joel Goldsmith is adamant about
being a seed "breeder," taking cuttings from one plant with desired
traits and cross-breeding it with another - the same way growers have been
developing hybrids for centuries.
At Seminis' San
Juan Bautista R&D operation, genetics are used, but not for genetic
modified produce that its parent Monsanto has perfected with soybeans and corn.
Veihman explained
that Seminis uses genetic "markers" to identify desirable traits in
vegetable plants, most notably higher yields for farmers and better taste for
consumers.
"We used to
look at the characteristics we wanted - growing tall, high yields, superior
taste - but that would take a long time," Veihman said. "Today we can
go in and look at the DNA blueprint of that plant and identify the gene that
correlates to that color, taste and nutrition level."
Dennis Taylor is
the Business Editor for South Valley Newspapers. Reach him at (408) 847-7097 or
at dtaylor@svnewspapers.com.
Florida growers suffering ‘brutal’ business climate
(Brandon.com) – In the next decade, two or three more large Palmetto or Ruskin (Florida) tomato packing operations can be expected to join Taylor & Fulton and drop out of the tomato business.
This "shifting and
shuffling" process must occur because not all will be able to survive the
tomato business' current brutal climate, said Reggie Brown, executive vice
president of the Florida Tomato Exchange and manager of the Florida Tomato
Committee.
Brown's comments came three days after Taylor & Fulton announced its first
major switch in philosophy since it started in 1953. The company said it will
embark on a new agriculture venture.
"I believe Manatee County will remain the largest tomato production area
in the state in the foreseeable future, but it won't be as large an industry as
in the past," Brown said this week. "In 10 years, four to five of the
current eight packing houses in Palmetto and Ruskin will remain."
With Taylor & Fulton dropping out of tomatoes, the Big Eight packing houses
are now seven - West Coast Tomato, Classie Packing, Pacific Tomato, DiMare
Farms, Harllee Packing, Woody's of Palmetto and Tomatoes of Ruskin, Brown said.
Tony DiMare, vice president of DiMare Farms, said the forces that probably
persuaded the Taylor brothers, John and Jay, out of the tomato business and are
impacting the other seven include:
- Labor supply and cost
- Food safety
- The North American Free Trade Agreement
- Petroleum costs, which impact diesel fuel and nearly all the plastics that farmers use
- More spray-resistant pests
- Pricey new pest chemicals to replace those which have been banned
- Water restrictions
- Drought
On top of this, the market for field-grown tomatoes is
shrinking because some customers prefer greenhouse brands, DiMare said. "I
hate to sound pessimistic, but I can't think of one positive thing right
now," DiMare said. "If you graph the number of farms, which have gone
out of business because of NAFTA, it's unbelievable. Taylor & Fulton is
just another example. I hate to lose a family operation like that."
Pacific Tomato is going to be a survivor in this game of musical chairs,
insists Billy Heller, the company's chief executive officer. But Heller
acknowledges there are rapids ahead.
"I see further contraction," Heller said. "The entire industry
is under fire from a bunch of directions. We fully intend to be here in 10
years, but that does not mean we are not constantly examining how we can stay
profitable. It's something we do after each crop."
The tomato industry in Manatee County is going to go through a changing time
like many industries had to undergo, Heller said. "Someone used to
manufacture buggy whips," Heller said. "Now, there is no demand. If
they are still around, they had to adjust."
Part of the problem is supply. There are just too many tomatoes being grown.
Florida is churning them out as well as Mexico. There are also greenhouse
tomatoes coming from Mexico and Canada, Heller said. Big houses like Pacific
must reinvent themselves to capture a share of the market.
"It's gonna change, without a doubt," Heller said. "Because
there will be fewer of us, the prices will be stabilized. Supply side must come
into balance with demand so we can get paid for what we are doing."
To show how weak the local tomato market has been, in the fall and spring of
2006-2007, Manatee County recorded an average wholesale price per 25-pound box
of tomatoes of $7.39, Brown said. Break-even for the farmer is $8 to $10, Brown
said.
"In the last six years, that's the lowest crop value recorded in Manatee
County," Brown said. "And, by far, it will also have the highest cost
for growing that crop. Those two numbers - crop value and crop cost - are
moving rapidly in opposite directions."
The problem, Brown and others said, is that this storm of extra expense is
hitting at a time when the retail market is awash in tomatoes. There are
tomatoes coming at the consumer from everywhere.
"There has been a significant shift to greenhouse," Brown said.
"They are cosmetically pretty. The are predictable in availability. They
are perfectly red and round and raised on water. They don't have the solids to
them that a field grown tomato does. They are widgets. They are manufactured,
not grown."
Shoot out on biotech farm leaves two dead
(ENS.com) – Two people were shot dead when activists in Brazil were confronted by armed men as they invaded a Swiss-owned farm that has been a flashpoint in the debate over biotech crops, authorities and the company said this week.
A security guard and an activist were killed by gunfire Sunday at the research farm owned by Syngenta AG, a global company with a heavy focus on genetically modified seeds.
Details of the
clash were still unclear, but the Parana state government said seven guards
were arrested, facing possible homicide charges. Police were standing guard
outside the farm Monday to prevent more violence, the state government said in
a statement.Activists, including members of Brazil's Landless Workers Movement
and the peasants rights group Via Campesina, shot off fireworks as they entered
the farm, and a bus arrived later with gunmen, the Landless Workers Movement
said in a statement.
A shootout ensued,
though Syngenta's contract with its security company required the guards to be
unarmed, Syngenta spokesman Medard Schoenmaeckers said. He described it as
"a quite dramatic and violent confrontation where we understand that
indeed there were some deadly injuries."While Brazil's national government
allows use of genetically modified seeds for some crops, Parana's state government
recently outlawed genetically modified corn and has tried repeatedly tried to
shut down the Syngenta farm.
Landless Workers
Movement spokeswoman Maria Mello said the Syngenta invasion was part of a push
to target "multinationals in the agribusiness sector whose presence in
Brazil delays the swift implementation of agrarian reform."The group also
wants "to bring an end the evil effects of genetically modified products
and their growing presence in Brazil," Mello said.The landless group, a
strong political force in Brazil, uses invasions of private property to
pressure the government to redistribute land to the poor. Via Campesina says it
represents poor farm workers and indigenous communities in 56 nations.About 300
activists first invaded the farm in March 2006, breaking down the gates and
setting up tents to publicize their claim that research there into genetically
modified soy and corn is illegal.They stayed until July, when Syngenta won a
court order to expel them.
The company,
Schoenmaeckers said, "never did anything wrong or illegal in Brazil"
and is still in the process of deciding the farm's future. He said no Syngenta
workers were at the farm when the clash erupted.Syngenta was created in 2000
when Novartis AG and AstraZeneca PLC merged their agribusinesses. The company's
Web site says that 60 percent of its corn and soybean seed has genetically
modified traits. The clash at the Syngenta farm came just days after at least
1,000 Landless Movement activists blocked a railway used to export iron ore
from a massive mine complex.
US food agencies, industry seek stiff import rules
(usinfo.state.gov) – U.S. agencies charged with overseeing
food import safety are expected to forward to President Bush in November
recommended actions that food producers, distributors, importers and regulators
should take to strengthen food safety.
The recommendations will focus on developing more scientific and analytic tools
to allow better identification of potential risks, to monitor the effectiveness
of prevention measures and to increase use of information technology for
inspection and surveillance.
The recommendations also will aim to reduce the time between detecting and
containing a food-borne illness, David Acheson, assistant commissioner for food
protection at the Food and Drug Administration (FDA), told a House
Appropriations subcommittee in September.
The food industry's largest trade group, the Grocery Manufacturers Association
(GMA), has unveiled its proposal for more regulation. It reflects awareness
among industry leaders that U.S. companies, as imports rise, face increasing
challenges to ensure the quality and safety of food sold to U.S. consumers.
The GMA proposal would require all U.S. food importers to adopt a foreign supplier
quality assurance program and verify that imported products meet FDA food
safety requirements.
GMA President Cal Dooley said industry wants to work with government to
strengthen and modernize the U.S. system of regulating the safety of food imports.
Working in partnership with government, "industry can apply its vast
knowledge and practical experience along the entire supply chain to prevent
problems before they arise," he said.
Some companies, such as retail giant Costco, long ago added their own
specifications to the current government regulations, based on consumer
expectations for quality and safety, said Craig Wilson, Costco's vice president
of food safety and quality. He said Costco's food suppliers are located all
around the world so that the company can get supplies of fresh fruits,
vegetables and meats in any season.
Since 2006, U.S. food safety agencies have increased information sharing –- and
thus prevention and intervention efforts -– through an international trade data
system maintained by the Bureau of Customs and Border Protection.
The U.S. Department of Agriculture's Food Safety and Inspection Service (FSIS)
is responsible for ensuring that U.S. imports of meat, poultry and eggs are
safe and properly labeled. It is a "regimented process" of sending
inspectors to countries and establishments in those countries to determine if
their safety standards are equivalent to those of the United States, FSIS
Administrator Alfred Almanza told USINFO.
Thirty-three countries are certified to export meat to the United States, and
only certified establishments in those countries can export specific foods to
the United States, Almanza said. "It’s an exciting time for those
countries that are eligible to ship to the United States. ... As long as they
meet our regulatory requirements, they can expand the number of customers,” he
said.
All food coming into the United States is inspected at a port of entry to
ensure the contents of the shipment match information contained on the
accompanying document. Certain products are inspected a second time for such
pathogens as listeria, E. coli and salmonella, and for residues in the food.
These include ready-to-eat products, such as packaged salads, and products from
a country or establishment with some history of noncompliance with U.S.
standards or from countries experiencing an outbreak of a disease.
If a shipment is found to be suspect, a sample of its contents is sent to one
of four FSIS laboratories around the country for analysis. FSIS and FDA, part
of the Department of Health and Human Services, also host delegations from
trade-partner countries interested in seeing the stages of the food safety
system, from farms, to processing and packing plants to food transportation
companies, Almanza said.
In addition, U.S. agencies are working closely with state governments to adopt
more uniform regulations. FDA also has signed an agreement with the European
Food Safety Authority to cooperate on food safety assessments.
Cornell to train African plant breeders
(Cornell University)
– In its latest venture in Africa, Cornell will support a new doctoral program
at the University of Ghana to train African plant breeders to tackle issues
relating to maize, cassava, sorghum, millet, tomato, cowpea and other crops
vital to Africans' diet.
Funded by a $4.9 million grant from the
Alliance for a Green Revolution in Africa (AGRA), a partnership between the
Bill and Melinda Gates Foundation and the Rockefeller Foundation, the program
aims to address the serious shortage of professional African plant breeders
skilled in breeding indigenous plants. Cornell will receive an additional $1.7
million from AGRA to provide academic and technical support.
This is the second announcement in recent days
of a Cornell-supported program in Africa. Earlier this month Cornell signed a
memorandum of understanding with Bahir Dar University in Ethiopia to offer its
Master of Professional Studies (MPS) degree in international agriculture and
rural development, to be taught as a pilot by Cornell faculty who will travel
to Ethiopia. It will be Cornell's first degree program in Africa.
In Ghana, starting in January 2008, the West
Africa Centre for Crop Improvement (WACCI) program, located at the University
of Ghana in Legon and supported by Cornell, will train 40 Ph.D. students from
West African countries in plant breeding and genetics, with eight students
admitted each year for the next five years.
"When Africans come to study in the
United States, they are drawn to the problems that their supervising faculty
have, which may be unrelated to the challenges at home. So they graduate with
an education that is out of context, and they may have relatively little
incentive to return home," said Ronnie Coffman, international professor of
plant breeding and genetics and director of International Programs in Cornell's
College of Agriculture and Life Sciences. "African donors are tired of
supporting this kind of training because they feel they are not getting
sufficient return on their investments. This is an effort to train plant
breeders in the African context."
Cornell plant breeding professor Vernon
Gracen, who is also associate director of WACCI, will spend six months in Ghana
annually to help upgrade the curriculum, supervise student thesis research and
help in management of the center. Plant breeding and genetics professor
Margaret Smith, who serves as principal investigator of the project for
Cornell, will provide leadership in planning and evaluating thesis research, through
electronic communication with the University of Ghana.
Stefan Einarson, director of the
Transnational Learning Program in the College of Agriculture and Life Sciences,
will travel frequently to Ghana to provide technical assistance to WACCI.
Resources from Cornell's Mann Library will be available to students
electronically. Also, all of Cornell's plant breeding courses, which are
available on video, will be either streamed over the Internet or provided on
DVD for use in Ghana. Ghanaian faculty and students and Cornell faculty also
will be in contact via video conferencing to review student proposals and
theses.
Students will devote the first two years of
study to gaining a standardized foundation in genetics related to plant
breeding, biotechnology, plant microbial interactions and disease control,
plant stress physiology and more. As students move on to years three to five,
they will conduct thesis research projects based in the students' home
countries, aimed at solving problems faced by local farmers.
"This collaboration with WACCI provides
engagement for our faculty and gives us experience in the challenging problems
of Africa, some of which could become global problems," said Smith. For
example, she said, "Many plant diseases and pests are worldwide problems
as exemplified currently by the new race of wheat stem rust fungus that
recently originated in East Africa and is spreading around the world."
End Transmission