DuPont sees growth as farmers seek drought-hardy corn
U.S. farmers are clamoring for more drought-hardy corn seeds as the spring planting season nears and soils remain parched across large swaths of key growing areas, the head of one of the world's largest seed companies said on Friday.
DuPont Pioneer, the seed and genetics arm of chemical conglomerate DuPont, is seeing such a rapid pace of orders that it expects to double the area that its drought-tolerant corn is planted on this year to roughly 5 million acres, said Paul Schickler, president of DuPont's Pioneer Hi-Bred unit, known also as DuPont Pioneer.
Pioneer, which saw total sales of $7.3 billion in 2012, sees expanded distribution in the Eastern corn belt areas with 44 different hybrids after focusing on the Western corn belt the past two seasons, and is accelerating seed production for similar growth in 2014 as expected this year, said Schickler.
"We've got a good read of what the demand is," Schickler said in an interview with Reuters. "Farmers are becoming a little bit more conditioned...concerned about drought. We will be ramping up significantly."
Yields with Pioneer's "Aquamax" seed were more than 8 percent better than many rival offerings in water-stressed environments, according to company data. And Pioneer is boosting prices to capitalize on the demand as the nation's midsection continues to suffer through one of the worst droughts in decades.
Drought cut deeply into U.S. corn production last year, leaving the average U.S. corn yield for 2012 at 123.4 bushels per acre, down from 147.2 bushels per acre in 2011. Total corn production dropped to 10.8 billion bushels in 2012 from over 12.4 billion bushels in 2011.
The U.S. Department of Agriculture projected on Friday that U.S. growers would plant about 96 million acres this spring and produce a corn crop of 14.53 billion bushels, up 35 percent from 2012, with an average yield of 163.6 bushels per acre.
Schickler said with soil moisture levels still sharply deficient, he was unsure the USDA's yield estimates would prove out.
"We have got to have a good growing season to get those kinds of yields," he said.
Schickler said Pioneer is well placed with its seed supplies, despite market talk that some suppliers are short of seed due to the drought.
Not even this week's foot of snowfall in many areas was expected to significantly replenish parched soil moisture conditions.
Pioneer rival Monsanto Co. this season is commercializing its DroughtGard corn in the Western Great Plains as the industry's first genetically altered corn designed to mitigate yield loss from drought.