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Lancaster, OH | Zone pricing is an answer to adequate seed supply. You might ask, "why?"
Do a little math. If you have one genetics package that can have these trait options: RR, LL, YGCB, YBRW, HXCB, HXRW, Conventional. Now, do combinations such as RR/YGCB, LL/HXRW, etc. You come up quickly with 21 different combinations of genetics/traits. So, instead of having a many acres of a couple of these 21 different options, you have 21 different options on smaller acres.
Each one of these production runs will have up to 5 different seed sizes with a couple of package options--boxes or bags. So, now we have 21 products x 5 seed sizes = 105 different packages to stock.
There is no way that you could have the supply of the combination you want in the seed size you desire with production so spread out.
Therefore, the answer was to go to a fully stacked option with an attempt to price it such that the returns are "fair" for the producer based on the pressures that are in that region. By doing that, production risks are spread out and supplies are more dependable. Obviously, the realized margin on seed sales is less in some zones than other but are viewed as preferable to the supply and production costs associated with a one price system where the seed is much less acceptable over a broad area.
The argument is the "fair" question. In my little geography where we "are in a rotation and don't need RW protection" the yields for the stacked hybrids was 3-5 bushels above that without. That hardly compares to areas with more pressures where the seed would replace the insecticide application and tens of bushels was the difference. Unfortunately, with zone pricing, lines are drawn and it is "unfair" in areas around the line either too good or too bad.
I don't have a dog in this fight but that is the perspective of the seed producers to attempt to have adequate, predictable supplies of hybrids at prices that are acceptable to the customers they are selling. | |
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Zone pricing for seed. Do you agree with it? And why can't we buy anywhere?
