MAY 1996
MCIA Forms New Seed Company
LibraryHome
E-Mail
Back
Prairie Grains is the
official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain Growers Association,
South Dakota Wheat,
Inc., and the
Minnesota Barley
Growers Association.
Although the regional seed enterprise will operate like other privately-held seed companies in the Midwest, it intends to concentrate on developing and marketing crops with specific characteristics or end uses.
"We want this to become more of a specialized company that will focus on differentiated, value-added crops," says Gary Beil, MCIA's president and CEO.
Forming a new company is an unconventional step for an association. The MCIA is a non-profit trade association comprised of nearly 1,000 members in the seed business, with traditionally two major functions: 1) to certify the purity and genetic identity of seed produced in Minnesota, and 2) to increase new lines released from the Minnesota Ag Experiment Station in Minnesota and neighboring states.
However, conditions in the seed market-including changing varietial release policies and declining certified crop acreage-were signaling that to remain viable in the foundation seed business, the MCIA and its members needed new opportunities.
"We were seeing a lot of members getting out of seed certification, particularly soybeans. The profitability of public soybean varieties was decreasing, and it was becoming apparent that seed growers have fewer viable products to certify and sell. These same conditions apply to other crops as well, including small grains," says Beil.
There is a definite need for the public varietal development infrastructure, as well as the primary services of the MCIA, Beil maintains. But NorthStar Genetics offers a route in which seed producers can capitalize more fully in the private sector. "Last year we certified more private than public varieties of spring wheat," he says, "and in the 1995 yield performance trials, four of the top varieties in spring wheat were privately developed."
Although the most immediate opportunities for NorthStar Genetics lie in canola and soybeans, the company plans also to acquire and distribute alfalfa, wheat, and other crops. For wheat, the marketing opportunities may lie in varieties with special characteristics as high yield, high protein, disease resistance, or special milling and baking qualities.
Joining the MCIA in forming the new company is the Minnesota Seed Producers and Promotion Association (MSPPA), which promotes the sale and distribution of public seed certified by MCIA under the brand name MPS seed.
NorthStar Genetics now has an interim board of directors comprised of MCIA and MSPPA leaders, with Biel providing executive direction under contract. The company will eventually operate separately with its own management structure. It will be owned by its investor members, with services such as certification provided by the MCIA.
The company will be capitalized through an initial offering of 1 million shares of stock to MCIA members who reside in Minnesota. The stock price is $1 per share, with a minimum purchase of 10,000 shares. Selected soybean and wheat varieties will be increased in 1996 and commercial quantities of seed will be available for sale for 1997 planting.