S&W Seed Company (S&W and S&W Seed) operates as a global multi-crop, middle-market agricultural company that principally engages in breeding, growing, processing and selling agricultural seeds.
The company is leveraging its camelina seed technology in its partnership with Equilon Enterprises LLC (doing business as Shell Oil Products, or Shell) in the United States to demonstrate how agriculture and energy can work together to lower carbon emissions by producing domestically sourced sustainable...
S&W Seed Company (S&W and S&W Seed) operates as a global multi-crop, middle-market agricultural company that principally engages in breeding, growing, processing and selling agricultural seeds.
The company is leveraging its camelina seed technology in its partnership with Equilon Enterprises LLC (doing business as Shell Oil Products, or Shell) in the United States to demonstrate how agriculture and energy can work together to lower carbon emissions by producing domestically sourced sustainable biofuel feedstocks.
The company operates seed cleaning and processing facilities located in Texas, New South Wales, and South Australia. Its seed products are primarily grown under contract by farmers. The company's current focus is on growing sales of its proprietary and traited products, specifically through the expansion of Double Team for forage and grain sorghum products and new trait introductions, including the second generation of Double Team and Prussic Acid Free, or PF, improving profit margins through pricing and operational efficiencies, and developing the camelina market via a partnership formed in fiscal 2023.
The company's seed platform develops and supplies high-quality trait and germplasm designed to produce higher yields for farmers worldwide. In fiscal 2024, the company sold over 650 seed products in more than 30 countries. The company maintains an active product pipeline and expects to introduce over 10 new sorghum and alfalfa products during fiscal 2025 in North America.
Strategy
The company’s strategy is to focus on key products that address unmet market needs; and develop licensing strategy business model to enhance customer experience.
Crops
Sorghum
The Sorghum Market: With the persistence and concern of drought conditions, the company expects sorghum to become more prominent in the coming years. The company’s primary markets for sorghum are in the United States, Mexico, and South America.
S&W’s Sorghum Portfolio: The company sells approximately 200 commercialized sorghum seed products, which include both forage and grain sorghum.
The company's focus moving forward is on its trait-laden products. In fiscal 2025, the company plans to commercialize two to four new homozygous Double Team hybrids. Since its initial commercial launch in 2022, the company has seen increased market adoption, as farmers are realizing the value of its proprietary trait technology. After a successful commercial launch of Double Team forage sorghum in fiscal 2024, the company anticipates a fiscal 2025 launch of its second generation of Double Team forage and grain sorghum. The second generation of Double Team will provide non-GMO tolerance to broad spectrum grass herbicide with increased spray flexibility. The company also plans for a fiscal 2025 commercial launch of its PF hybrid in collaboration with The Agricultural Alumni Seed Improvement Association, Inc., an affiliate of Purdue University in West Lafayette, Indiana. PF sorghum removes naturally toxic metabolites from stressed forage sorghum, resulting in safe, worry-free grazing and hay. The company is anticipating a commercial launch in fiscal 2028 of a stacked trait, containing Double Team grain and forage sorghum plus PF. The company continues to reduce its conventional sorghum product portfolio to ease inventory management and devote more resources to its trait-laden products.
Alfalfa
S&W’s Alfalfa Seed Portfolio: The company sells approximately 75 commercialized alfalfa seed products, which includes both non-dormant varieties, which grow year-round, and dormant varieties, which have adapted to cold climates by going dormant during periods when frost or snow conditions would otherwise kill them. The company’s specialty is high-yield alfalfa varieties with a wide range of adaptation across many growing environments. The company’s alfalfa seed products include varieties that exhibit the traits that farmers most value, such as high yield, root rot resistance, lodging resistance, salt tolerance, drought tolerance, leafhopper resistance and stem nematode resistance.
Camelina
In fiscal 2023, the company entered into a partnership with Equilon Enterprises LLC (dba Shell Oil Products, or Shell) called Vision Bioenergy Oilseeds LLC, or Vision Bioenergy, an entity in which it currently retains a 34% minority interest. This partnership intends to develop camelina and other oilseed species from which oil and meal can be extracted for future processing into animal feed, biofuels, and other bioproducts. With a limited supply of arable land, camelina provides a long-term opportunity to maximize farmland food production.
On February 14, 2024, Vision Bioenergy announced it had been granted a global license to certain proprietary varieties of camelina from Yield10 BioScience, Inc., or Yield10, a leader in the development of camelina. Yield10 is supplying Vision Bioenergy certain camelina varieties, including varieties exhibiting herbicide tolerance to spray application of the broadleaf herbicide glufosinate. In calendar year 2024, Vision Bioenergy plans to sample this herbicide tolerance system with some of its key camelina growers, while simultaneously building planting seed supply to support a potential commercial launch in calendar year 2025.
Stevia
S&W’s Stevia Program: The company’s stevia research and development program focused on developing stevia into a U.S.-grown crop from 2009 to 2023. In fiscal 2023, its stevia program was paused, as management has elected to focus its attention on its primary crops, specifically Double Team sorghum. The company continues to look for either a strategic partner in the food industry or a potential buyer for its viable stevia germplasm.
Product Development
The company develops the first product type, which is based on good agronomic performance, in its breeding programs at multiple locations in the United States and through collaborations in South America. These programs utilize state-of-the-art equipment, experimental design, and data analysis for field evaluation, and track important agronomic traits using molecular genetic markers. Developing improved genetics for agronomic performance can take 5 to 15 years, depending on the species and specific genetic improvement targets.
The company develops the second product type, which emphasizes valuable and unique traits, both in-house and through exclusive collaborations. Its Double Team product was developed entirely in-house through its DNA and Tissue Culture Lab in Texas. The company’s PF trait, expected to have a pilot commercial launch in fiscal 2025, was developed through an exclusive arrangement with The Agricultural Alumni Seed Improvement Association, Inc., an affiliate of Purdue University in West Lafayette, Indiana. The company's lab and technology personnel are focused on maintaining a continuous pipeline of traits that can be used to build value by increasing market share in both company and private label seed brands and by out-licensing to other seed companies on a royalty basis. For example, the company completed its first out-license of Double Team technology to Mojo Seed in June 2022.
Sales, Marketing and Distribution
The company's principal markets for sorghum and alfalfa sales are the United States, Mexico, and South America. Today, the company primarily sells its seed products under the S&W brand or other brands it owns, such as Sorghum Partners. Private-label and licensing are important parts of the company's distribution strategy going forward.
The company's customers are primarily distributors and dealers. Its distributors and dealers, in turn, sell to farmers. The company selects dealers and distributors based on shared vision, technical expertise, local market knowledge, and financial stability. Over the years, the company has built dealer/distributor loyalty through an emphasis on service, access to breeders, ongoing training, and promotional material support. The company limits the number of dealers and distributors with whom it has relationships in any particular area in order to provide adequate support and opportunity to those with whom it chooses to do business.
Both farmers and dealers use pest-control advisors who recommend the varieties or hybrids that will produce the best results in a particular location. Therefore, a key part of the company's marketing strategy is to educate the consultants, as well as the farmers, about the benefits of its seed varieties and hybrids. The company continues to place advertisements in trade journals, agriculture publications, and throughout social media. The company also continues to participate in seed industry conferences and trade shows and engage in various other educational and outreach programs as it deems appropriate.
The company's sales efforts also involve significant in-person interaction with potential customers and distributors, as well as alternative approaches, including video conferencing and similar customer interaction models.
Seed Production
The company produces seed in the Western United States and certain other locations under contract with select third-party contract growers. Its network of growers has the expertise needed to successfully grow high-quality seed products. The company has worked with many of the same growers on a long-term basis and believes that it has strong relationships with them. The company allocates its seed production among its growers so that it can purchase the proper mix of seed each year. Its contracts with growers have terms ranging from one to seven years, depending on the crop and the production area. The company's global, but localized, production capabilities allow it to produce close to the customer to ensure that the seed product is developed specifically for the conditions and requirements of that region and is produced at the lowest cost.
The company conditions and packages seed primarily in its own facilities located in Texas; however, in some markets (for example, California and Idaho), it uses third-party processing services.
Seasonality
The company contracts with growers based upon its anticipated market demand. The company mills, cleans, and stocks the seed during the harvest season and ships from inventory throughout the year (year ended June 2024). However, the company's seed business is seasonal. In the Northern hemisphere, production and harvest occurs from March through September while processing and shipping finished goods primarily occurs from October through May.
Competition
The company’s principal competitors by crop include:
Sorghum: In the U.S. market, the company’s principal competitors are Pioneer, DeKalb (a subsidiary of Bayer) and Alta (division of Advanta). In the Latin America market, its principal competitors are Nuseed, Brevant (a division of Pioneer), Dekalb (a subsidiary of Bayer), Advanta, RAGT and Group Don Mario (GDM).
Alfalfa: In the U.S. market, the company’s principal competitors are Forage Genetics International (a subsidiary of Land O’ Lakes, Inc.) with their four main brands, as well as DLF through their recent acquisition of Corteva's Alforex brand and genetics, and their rights to produce the Pioneer commercial varieties for sale under DLF branding. There are also numerous private label brands that are mostly regional in marketing and distribution.
Environmental and Regulatory Matters
Internationally, the company is subject to various government laws and regulations (including the U.S. Foreign Corrupt Practices Act and similar non-U.S. laws and regulations) and local government regulations. To help ensure compliance with these laws and regulations, it has adopted specific risk management and compliance practices and policies, including a specific policy addressing the U.S. Foreign Corrupt Practices Act.
Research and Development
The company’s research and development expenses for the year ended June 30, 2024, totaled $4.1 million.
History
S&W Seed Company was founded in 1980. The company was incorporated in 2009.
The Analyst Price Target shows the analysts’ low, high, and average target at a glance.
