Note:
No single source exists, so the following
methodology was used to estimate U.S. seed consumption: For
maize, oilseeds, other feed grain and cereals, cotton and sugar
beets, consumption estimates were calculated on yearly cost of
production data (seed cost per acre) and area harvested. Area
planted was not used because it is not available for other
countries and the ultimate goal is to build a worldwide
database. Ignoring abandoned area could make these crops’ seed
markets underestimated by as much as 10 percent in some years.
For horticultural seeds and pulses (beans and peas), a ratio of
total seed market value to the value of total production was
estimated using the Bureau of Economic Analysis Input-Output
1997 benchmark data (the ratios are 0.05 for sugarbeets and
floraculture, 0.09 for beans, lentils and peas, and 0.08 for
vegetables). The ratios were assumed fixed and applied to the
total value of U.S. production (according to NASS and ERS) for
those crops in the years 1992-2002. Turf and forage seed
includes only Kentucky blue grass, fescue, ryegrass, alfalfa,
orchard grass and sudan grass. Production data is available from
the agricultural census of 1992 and 1997. The compound annual
growth rate was applied to the years in between. After
subtracting net exports of each kind, the remainder was
multiplied by April prices collected by NASS. Industry sources
have confirmed the magnitudes and trends produced using this
methodology and illustrated above.
The chart above is based on
estimated consumption. The United States is a net exporter of
planting seed, with annual exports and imports of roughly $800
million and $400 million, respectively. Changes in stocks are
hard to estimate, but adding net exports to the consumption data
and assuming small or no changes in stocks puts domestic
planting seed production over $8 billion. U.S. seed production
in 2002 was therefore twice as large as the value of U.S. cotton
production ($3.6 billion according to NASS), larger than wheat
production ($5.9 billion), over half the value of U.S. soybean
production ($14.8 billion) and at least a third as large as U.S.
corn production ($21.2 billion). Seed, when considered as a
distinct segment of American agriculture or as a single "crop,"
clearly ranks among the largest.
Maize seed is the largest segment
of the domestic planting seed market, valued at $2.2 billion in
2002. Maize seed has maintained the same share of the
total, about 30 percent, over the past ten years. Turf and
forage seed places second, at almost $1.6 billion, and oilseed
for planting (mostly soybean) a close third at $1.5 billion.
These last two segments appear to have enjoyed the most rapid
growth since 1992. Unfortunately, the turf and forage seed data
is the weakest link at present. The domestic vegetable and melon
seed market is believed to be worth about $685 million, up from
$506 million in 1992.
The period 1993-98 was one of
spectacular growth for the U.S. seed market, especially 1996 and
1997. The introduction and widespread acceptance of biotech
soybean seed is a major factor, as many areas switched from
farm-saved seed to purchased seed. Relatively slow growth in the
U.S. seed market since 1998 is due in large part to intense
price competition. Based on the 10-year and 5-year trends in
U.S. seed consumption and trade estimates, a domestic market
worth over $9 billion by 2010 appears to be a reasonable
forecast, and domestic seed production of around $10 billion.
U.S. seed exports represent about
10 percent of production. That proportion has not changed
significantly since 1992. Considering that international trade
in planting seed faces more phytosanitary and technical barriers
than most commodities, is subject to rules governing technology
transfer, and has been replaced by local production in many
areas due to growing concerns about genetic purity – ten percent
is no small share: U.S. seed exports represent about one-fifth
of world planting seed trade.
The importance of exports to U.S.
seed production despite high barriers to international trade is
due to strong push and pull factors. Push factors include
developments such as industry concentration, biotechnology, and
growing demands from increasingly fewer, larger and more
sophisticated farmers. The time it takes for a new seed product
to go from introduction to obsolescence has been cut in half
during the past decade even as the cost of new product
development has increased. Increased competition has translated
into a need for ever- larger markets over which to spread
expenses. The situation has also increased exports of parent
seed which is bred or multiplied overseas before returning to
the domestic market. Off-season multiplication in the Southern
Hemisphere and access to foreign sources of germplasm are
important pull factors that keep trade high relative to
production and use. The high rate of exports, especially
relative to the rest of the world, is testament to the
competitiveness of the U.S. industry in satisfying foreign
countries’ import requirements and meeting foreign demand for
high-quality, wellregulated planting seed.
Central American Free Trade
Agreement
Free-trade agreement (FTA)
negotiations are underway between the United States and five
Central American countries – Costa Rica, El Salvador, Guatemala,
Honduras and Nicaragua. In CY 2001, the last year for which data
is available, the five countries imported and exported a total
of $21 million in planting seeds. The region is about as large
in world seed imports as Chile and as large as Mexico in world
seed exports. Combined, Guatemala and Costa Rica accounted for
essentially all exports and over half of the region’s seed
imports. Flower and vegetable seeds were the most widely
imported seeds; flower and palm seed accounted for most exports.
The U.S. was the largest single supplier and market, accounting
for 65 percent of seed imports and 38 percent of seed exports.
The most impressive growth in the region’s seed trade has been
in trade with one another. Intra-regio nal seed trade grew from
just under $1 million in 1994 to $3.2 million in 2001.
With the exceptions of Costa
Rica’s import ban on palm and mango seeds and the other
countries’ restrictions on citrus, coffee and cacao, official
phytosanitary barriers appear low. None of the countries charge
import duties on seeds, other than some grain and oilseed seeds,
for which low tariffs do exist. The United States does have a
1-cent/kg tariff on flower seeds – the dominant segment of U.S.
imports from the CAFTA partners. The benefits to all
participant’s seed industries include the further integration of
the Central American markets, economic growth through increased
trade in other sectors, and stronger economic and regulatory
ties between Central America and the United States.
