Building business is all about service, and service is all about recognizing opportunity. One of the fastest growing opportunities in full-service retail is the switch to bulk seed sales. In fact, it is growing so fast that in some areas, like the upper Great Plains, it may have already maxed out. However, in the heart of corn and soybean country, there is significant opportunity for growth in marketing seed in bulk bags, boxes or from bins, suggested Gary Wietgrefe, bulk equipment specialist, Syngenta Seeds.
"Bulk soybean seed sales have reached 90 percent or higher in some markets, but in the South and East, we still see something like 40 percent paper bags," said Wietgrefe. "Much of the Corn Belt has tremendous growth left, but from Kansas through South Dakota, the paper bags have only about 5 percent market share in soybeans."
Wietgrefe suggested growers accustomed to bulk handling of wheat and other small grains want the same with soy-beans. Appreciation for the ability to custom mix micronutrients and seed treatments has sped growth in bulk soybeans in the South.
"With the multiple crop rotations and diseases in the South, seeds can be treated by the field with bulk handling," said Wietgrefe. "It's easy to mix fungicicide and insecticide seed treatments and micros as needed."
Explosive growth in bulk handling through the rest of the country only makes sense from an equipment perspective. Wietgrefe noted that Syngenta introduced its TruBulk system in 1999. During the last decade, there was a dramatic expansion in equipment for seed treatment conveyer belt transfer and bulk seed tenders.
Growth in bulk handling isn't expected to slow down anytime soon, said Jake Niehues, national account manager, FarmChem. As a distributor, designer and manufacturer of handling systems, FarmChem gets involved in all levels of bulk seed systems from transfer to treatment to storage. Benefits can be seen at all levels, he suggested.
"Bulk is safer, cleaner and faster for the seed dealer and the grower," Niehues said. "It eliminates bags and boxes and reduces the chance of spillage and waste. Bulk handling provides more efficient and accurate ways to meter and treat seed with better data collection and inventory management."
Faster Seed Handling
Bigger and better equipment at the grower level is also pushing demand for faster seed handling, noted Wietgrefe. "We've seen a tremendous change in speed of planting as growers move from six- to 12- to 24- and now 48-row planters," he added. "The last thing the grower who doubles his planting speed wants to do is spend time at the end of the field. He wants his planter filled twice as fast, too."
Wietgrefe noted that the seed dealer who can deliver what his growers want will get the business. At the same time, bulk handling frees up labor and management to concentrate on service and cus-tomer relations.
"A semi of bags can take eight hours to unload, treat and load-out to growers, while our TruBulk system can do it in two hours," he said. "Every minute spent on a forklift moving bulk bags or pallets is a minute not spent with the customer."
Niehues agreed with Wietgrefe that speed is important. He pointed out that with a correctly designed bulk system, a seed dealer can treat seed at 1,600 to 2,000 units per hour. However, speed is only part of the equation. Smooth wall bins and let down ladders safely transfer seed from the truck. Cleated belt conveyers safely transport seed within the system, and continuous flow, drum design seed treaters evenly and accurately treat the seed and then gently discharge it. Such systems not only produce a quality product, but they also can add value to the relationship with the customer who sees it as extra service.
"The customer gets peace of mind that the seed is being treated accurately, that it is handled with care and that he doesn't have to wait as long for his treated seed," said Niehues.
Time to Spend With Growers
Seed dealers providing extra service to growers with bulk seed have created new opportunities for material handling equipment manufacturers like KBH. With more than 50 years in fertilizer handling equipment, KBH began to see demand develop for bulk seed handling equipment about 10 years ago. Today, it is the fastest growing segment of their business.
"Our retailer customers saw profit margin opportunities in seed treatment and more expensive seeds with added traits," said Tim Tenhet, marketing and sales, KBH. "They wanted to provide a higher level of seed service to retain those margins."
Moving to bulk allowed them to capture treatment opportunities, which required them to add bulk tendering equipment. It also required that they find ways to get bulk handling equipment into the hands of growers. Doing so has spurred new relationships between suppliers like KBH, retailers and grower customers.
"Our retailer customers have played a key role in getting our equipment into grower hands," said Tenhet. "They may buy units for their own fleet, loan to key customers or sell to a customer in exchange for a multi-year seed buying commitment."
Often times, he added, the retailer's seed supplier will have a discretionary rebate program available to the farmer through the seed dealer that recognizes increased seed sales. Some seed retailers have also become equipment retailers and simply resell bulk handling equipment to their customers as a service or close to cost.
Tenhet emphasized matching equipment to particular customers or customer segments. His company and others sell what he described as "a world" of poly augers with cupped flighting for seed handling. KBH and others also offer belt systems. Though he argued that poly augers offer safe handling of most crop seeds other than peanuts, belt systems are faster and are a more "all-purpose" system.
"The problem with poly augers is that you can't get as high a discharge rate as you can with a belt," he said. "That is particularly important with soybeans and small grains, but poly augers remain popular in corn and cotton."
From a seed integrity perspective, Wietgrefe argued for belt systems only, with corn as well as soybeans and grains. "An auger pushes and spins the seed from the bottom to the top of the auger," he said. "The more worn the auger, the more damage to the seed."
Future Sales Opportunities
Speed and quality control aside, Wietgrefe cited other factors likely to accelerate the move to bulk seed handling including seed dealers adding talc to corn seed, as recommended by many planter manufacturers, and the potential for new seed treatments. The former is another service to sell, while the latter offers future added sales opportunities.
"Companies are working on bacterials, growth stimulants, micronutrients and agents that will enhance soybean growth and seed treatments that are variety specific," he said. "The industry will transition to provide more and more services designed for individual fields."