EDITOR'S NOTE: The cottonseed business has shrunk, in one sense, over the past few years. Buyouts and mergers have left fewer companies serving the industry. And most of the business goes to a few large corporations that have swallowed up many of the smaller, independent seed suppliers. But a few independents remain, bucking the trend and maintaining healthy competition that makes the entire industry stronger.

Below, the fifth in a series on cotton breeding features the challenges and opportunities an independent seed company faces in this competitive market.

The cottonseed business has undergone significant change over the last decade with mergers and acquisitions whittling what was once a robust number of companies down to a handful of large corporations.

Independents have found some hard going as they tried to carve out a niche in a highly competitive market.

Buz Poage, manager and CEO of All-Tex Seed of Levelland, Texas, says plenty of challenges face independents, but he also points to a few advantages.

“We can respond to market situations faster than the big boys,” he says. “On the other hand, we can hold back a bit on new technology and learn from their mistakes.”

All-Tex Seed Inc., has served the Texas South Plains since 1974. “Four different delinting plants owned All-Tex at one time,” Poage recalls. “Levelland Delinting now owns the seed company. We're small compared to Stoneville, Delta and Pineland, and some of the other big seed companies. But we're the biggest of the independents and we captured about 11 percent of the market share for our area last year.”

Hanging onto or adding to that piece of the pie demands constant attention to market factors and customers, Poage says. “Independents have to do a lot of creative thinking to hang onto the market.”

His current conundrum consists of deciding which way to take the company over the next few years. West Texas cotton farmers have recently switched some acreage to picker-type varieties instead of the more storm-proof stripper varieties they've depended on for years. And they've converted most of their acreage to transgenics, mostly Roundup Ready.

Multiple breeding

“Our challenge is to maintain multiple breeding programs,” Poage says, “one for conventional varieties and one for transgenics and perhaps one for picker types.”

They've incorporated Roundup Ready genetics into their lines for several years. “We've had some help from Monsanto. One thing we wanted was to put transgenics into storm-proof stripper cotton.”

He says “Atlas RR [a stripper variety with Roundup Ready traits] got us into the transgenic market.”

He's not convinced the switch to picker-type cotton will last. “It's been here before and left,” he says. “Sooner or later, we'll get a September freeze and a lot of cotton will be damaged. Long-staple cotton needs to be planted in late April or early May. If farmers have to delay planting, I don't know what they'll do.”

In the meantime, his quandary is whether to change his breeding program to long-staple picker varieties instead of stripper cotton. “We could change the breeding program and then get an early freeze that turns farmers back to stripper types. So, we'll try to do a little of both and put transgenic traits in stripper and picker cotton varieties.”

He says imminent technology introductions also create a breeding program dilemma.

“In 2005, Monsanto will introduce Flex Roundup. I don't want to be caught with a big inventory of Roundup Ready cotton when Flex comes out. But I also wonder how the market will respond if Flex Roundup is extremely expensive. Dryland producers, for instance, may not go to Flex.”

He's also preparing for Bollgard II. “We will offer our Bollgard II very soon. Adapting new technology helps us compete with the big guys, though it is getting harder to do.”

Current products

Regardless of the technology coming, Poage stands by current products. “We have a good storm proof stripper cotton with transgenic traits that will compete with anybody in the market,” he says. “Our Atlas RR and Xpress RR have proven to be as vigorous and dependable as our well-known conventional Atlas and Xpress varieties. Our Xpress RR is the quickest maturing Roundup Ready variety currently on the market. If a producer wants a top-quality picker bred for this area, our Top-Pick is a good choice. Top-Pick will be available with transgenic traits in the next few years.”

Poage says cotton breeding, especially for small independent companies, has been hampered in recent years because less germplasm has been available from universities. He says universities seem to collaborate less than they once did. “We used to have access to more but now we have to pay for patents, royalty fees and so forth. And small companies like All-Tex can't afford to go to South Africa to get a second crop each year. We do everything here on our farm. But I'll know what a new variety will do under West Texas conditions. I may get it a little later than a big company would and it's hard to make up market share, but we'll get there.”

At one time Poage did all the breeding work for All-Tex and he still takes a personal interest in how each new product will perform under the often harsh conditions of West Texas. He says customer loyalty, although not as certain as it once was throughout agriculture, remains strong.

He believes being independent, local, and committed to his farmers will make up for anything he might lack in size.

e-mail: rsmith@primediabusiness.com