Research Progress Report 272 January, 1967
Trends in Seed Corn Marketing
Thomas F. Funk and James C. Snyder Agricultural Economics

Introduction

This report relates some of the findings of a recent survey of the hybrid seed corn industry. Emphasis was focused on management practices and policies with respect to pricing, promotion, product line, distribution channels and concentration of firms. As such, the survey data provide important information for planning purposes.

Sales of hybrid seed corn are becoming highly concentrated in the larger firms which accounted for over 80 percent of total sales in 1965. Much of their increase has come from the sales of single cross hybrids. The small firms have also gone heavily into single crosses while the medium sized firms still rely mainly on double crosses. All the size categories studied have exhibited growth. Most of this growth for the large firms has been in areas other than hybrid seed corn, but growth of the small and medium sized firms has come mainly from production and sales of hybrid seed corn. The return on invested capital is much higher for the large firms than for either the small or medium sized firms.

The marketing mix of hybrid seed corn firms varies substantially among the different size categories. Generally speaking, the
smaller the firm the more it relies on personal selling. As firms become larger, they shift their resources to other items in the mix. Farm magazines are becoming increasingly important advertising media while use of the other media is generally decreasing.

Pricing is an issue of great concern in this industry. The price of double crosses is to a large extent determined by the large firms in the industry with the smaller firms then falling in line. With three-way and single crosses, however, there is much more variation in prices as firms act more independently in determining prices.

The principal retailing agent of hybrid seed corn is the farmer-dealer. In 1965, farmer-dealers handled 76 percent of the seed corn sold, and other channels--store dealers, direct sales, and farm supply cen-ters--accounted for the remainder. However, in the future there will probably be more emphasis on direct selling and farm supply centers.

Methodology
The survey was conducted in the spring of 1966. A sample of 20 firms representing

PURDUE UNIVERSITY • Agricultural Experiment Station • Lafayette, Indiana