The Seed Industry

Recipient Organization
USDA/ERS
1800 M STREET NW
WASHINGTON,DC 20036

Performing Department
ECONOMIC RESEARCH SERVICE

Non Technical Summary
This project's goal is to examine the long-run trends on seeds as an input to U.S. agriculture and the seed industry (and other institutions) that contribute to provide such inputs.

Animal Health Component

90%

Research Effort Categories

Basic

10%

Applied

90%

Developmental

(N/A)

Classification

Knowledge Area (KA)	Subject of Investigation (SOI)	Field of Science (FOS)	Percent
605	5240	3010	100%

Knowledge Area
605 - Natural Resource and Environmental Economics;

Subject Of Investigation
5240 - Seeds and other plant propagules;

Field Of Science
3010 - Economics;

Goals / Objectives
This project's goal is to examine the long-run trends on seeds as an input to U.S. agriculture and the seed industry (and other institutions) that contribute to provide such inputs. This information will focus on major crops and includes: (i) the seed industry: a historical perspective; (ii) seed as an input and agricultural productivity, including time series information on farm seed expenditures, seed prices, quantities of purchased seed, seed purchased vs. seed used, and crop yields; (iii) new varieties released and the adoption of new seed varieties; (iv) the evolution of the structure of the seed industry for major crops: market share by firm for corn, soybeans and cotton; (v) trends on research and development expenditures by the seed industry (by crop); (vi) the long-run effect of seeds and genetic improvement in U.S. agriculture; (vii) the regulatory framework; (viii) industry structure and competition in the seed industry, (ix) the international seed market, U.S. imports and exports of seeds

Project Methods
Wherever appropriate, econometric and statistical models will be used to estimate economic relationships.

Progress 06/15/02 to 03/30/04

Outputs
The project was completed with the publication of the two major outputs: AIB-786 and Amber Waves Feature, both in February 2004.

Impacts
Over the past 70 years, yields of all major field crops in the U.S. registered remarkable increases. More than half of these yield gains are attributed to genetic improvements achieved by plant breeders. The U.S. is the largest seed market worldwide, followed by China and Japan. Seed expenditures by U.S. farmers more than doubled in real terms between 1960 and 1997. Much of the increase is due to increases in the share of seed purchased from commercial sources, The U.S. is a net exporter of seed. In 1996, U.S. seed exports totaled $698 million. Seed imports totaled $314 million. Until the 1930s, most commercial seed suppliers were small, family-owned businesses who depended almost exclusively on plant breeding research in the public sector. Hybrid corn varieties, developed and widely adopted in the first half of the 20th century, provided the private sector with a natural method of protecting plant breeding investments. Combined with strengthening legal protection of intellectual property rights in the second half of the century, this brought about significant change in the seed industry, particularly in research and development (R&D) and industry concentration. Private R&D expenditures on plant breeding increased 14-fold in real terms between 1960 and 1996, while real public R&D changed little. R&D on corn varieties began shifting from public to private in the 1930s, while soybeans followed in the 1970s. Private sector R&D for improved wheat varieties has been limited, so farmers still rely on public sector wheat varieties for new sources of seed.

Publications

Fernandez Cornejo, J., King, J., Heisey, P., Jonathan Keller, Davis Spielman, Mohinder Gil, 2004, The Seed Industry in U.S. Agriculture, Agricultural Information Bulletin, AIB-786, Economic Research Service, U.S. Department of Agriculture, February, 71 pp.
Fernandez Cornejo, J., Schimmelpfennig, D., 2004, Amber Waves, U.S. Department of Agriculture, February, 6 pp.