Five Points, California, USA
March 5, 2012
S&W Seed Company today announced that it has secured approximately 360 additional acres for production of S&W's proprietary alfalfa seed varieties. The additional acreage, which will be harvested in calendar 2012, is comprised from contract growers. Today's announcement brings the total secured acres to over 4,664, representing an approximate 95% increase from the 2,400 acres harvested in Fall 2011.
To date, of the 4,664 acres secured for the fall 2012 harvest, the company plans on producing its proprietary alfalfa seed varieties internally on 1,621 of those acres, representing 35% of the company's planned 2012 harvest. By producing a portion of its alfalfa seed internally, through farming on leased land, the Company hopes to obtain a consistent supply of alfalfa seed that is potentially at a lower cost than the average cost of contracted seed.
Mark Grewal, chief executive officer of S&W Seed Company commented, "Our ability to continue growing revenues begins with increasing our seed production. Today's announcement, where we are effectively doubling our seed production capabilities, puts S&W in a position to capitalize on the increasing demands for the company's proprietary alfalfa seed varieties and becomes an indicator of the company's future revenue opportunities. As evidenced by the strong growth in seed sales during the first half of fiscal year 2012, we are excited about the future of our alfalfa business."
According to the USDA, alfalfa hay is commanding record prices due to shortages and increased global demand. In December 2011, the USDA reported that the national average price was $199 per ton, compared with $121 per ton in the previous year. While not a direct correlation, with the significant increase in price for alfalfa hay, S&W expects increased demand for hay production in the future, which will, in the opinion of the management of S&W, also increase the demand for S&W's proprietary varieties.