For some business’ in Central Europe – an interesting opportunity exists to add value to existing Corn crops, via cooperating with a seed house in order to produce registered certified seed corn. 

With corn forming an important part of rotations across Europe, many business’ have long term experience of growing both irrigated and non irrigated crops.  Putting this experience to work in growing a higher value crop, for Corn, but also Soybean, Sorghum, Canola and Wheat – in suitable soil types and climatic reasons – is a good way of managing risk (via contracted production) and lessening exposure to the vagaries of commodity markets.

Agreement Principles

The seed house will supply seed free of charge and with the grower responsible for field preparation and planting. Maintenance of the crop through its growth stages is the responsibility of the grower although the seed house will provide expert agronomy advice throughout this time period. Both harvest and transportation are dealt with by the seed house as they look to gain optimum control over the finished products quality. Typically a grower will engage in a five year commercial contract with the seed business which offers a guaranteed return per hectare during this time.

But …. There are some challenges …….

The difficulty with growing seed corn is the casual labour requirement.  The crop needs rogueing four to five times during the season which adds cost to growing the crop in terms of seasonal labour. Ensuring access to seasonal labour is therefore critical before considering entering into such an agreement. As with all seed crops,  attention to detail is paramount, with almost weed free crops required and careful use of pre-approved herbicides is a sensitive area.

Financials

There are CAPEX additions which need to be taken into account. Typically a business will need to purchase a corn detasseler to remove tassels to allow for cross pollination within the seed crop. In many circumstances the detasseling operation also requires a second pass usually carried out manually by a team of hand workers to remove tassels which the machine may have missed.

The figures in table 1 indicate typical net margins which may be expected from an irrigated seed corn crop produced in Europe alongside standard irrigated corn.

Note the increase in Direct Costs and Indirect Costs for seed corn production is primarily due to an increase in seasonal labour costs and slight increases in assumed machinery repairs and depreciation for new machinery.   

For further information on higher value cropping strategies please contact Brown & Co International to find out more:

Adam Oliver – a.oliver@brown-co.pl – +48 606 418 284

Charlie Fowler – c.fowler@brown-co.pl – +48 511 760 321