Seed World

How to Adapt Your Seed Supply Chain for Earlier Planted Soybeans

Gro Alliance

A third-generation seedsman, Jim Schweigert grew up in the family seed business and was exposed to industry issues at an early age. He earned a Bachelor of Arts in public relations from the University of Minnesota and worked for corporate public relations firms in Minneapolis, Chicago and Atlanta before joining the family business full time in 2003. He has since been active in the American Seed Trade Association, the Independent Professional Seed Association and earned his master’s in seed technology and business from Iowa State University. As president, Schweigert manages client contracts and crop planning, as well as business development and new market opportunities. His unique background and experience make him one of the seed industry’s leaders in innovation. As such, he was honored as Seed World’s 2009 Future Giant and currently serves as chair of the board of directors for Seed Programs International.

Share Post:

If there’s a trend that you are surely aware of, it’s that farmers are shifting to earlier planted soybeans. This change affects every aspect of the soybean supply chain.

Farmers are planting earlier but taking seed delivery later. Farmers are reluctant to hold the seed for an extended period of time which risks damaging the bags and takes up valuable shop or shed space. This puts pressure on seed company warehouse capacity and the distribution team at a time when finding trucks is incredibly challenging.  

Further complicating the situation is that warehouse construction costs are historically high. Additionally, insurance companies are also more likely to require fire suppression systems like sprinklers or fire walls than in the past due to rising claims and higher replacement costs. Simply building additional warehouse space is not a good option.

Give this situation, companies are asking: “How can I adapt?” I have two ideas:

Refresh the Variety Mix on the Floor More Often

Companies using the product wheel concept are on the right track. Putting some volume of every variety on the floor, as early in the season as possible, provides distribution flexibility. My recommendation is to package about 1/4 of the expected sales volume of the larger volume varieties as soon as possible. This puts shippable product on the floor without overcommitting on volume and retaining warehouse space. Each variety should then be refreshed monthly, if necessary, to refill product against orders and shipments.

Package Early to Ship Early

Despite farmer resistance to taking seed early, having the right mix of varieties on the floor early does allow for some early shipments. Seed companies that start shipping, even limited quantities, in November can take a significant amount of stress off the distribution system. This takes a connected effort between the sales and operations. Farmers and dealers who will take early delivery need to be identified and worked with first to get their orders confirmed. Those confirmed orders can then help fine-tune the volume of each variety in the initial and subsequent packaging runs. If the sales team and operations team aren’t in-sync on the strategy to target orders from the early-delivery farmers first, shipping opportunities can be lost.

What should you take away from this? 

There’s no doubt early planted soybeans are disrupting the supply chain. But, by connecting the sales and operations team in an aligned strategy to get the right product on the floor so it can be shipped to the right dealers and customers early in the season, your distribution model will be ready for it!