For most people, launching a new cottonseed company during one of the most severe downturns in the ag economy in decades would be challenge enough. But not for Noal Lawhon.

Not only is Lawhon, the owner of McCrory, Ark.-based Delta King Seed Co., starting a new cottonseed company, but he is also planning to sell varieties under his new label, Beltwide Cotton Genetics, in his first year of operation.

And to top that, he expects to sell new picker varieties to stripper cotton growers on the Texas High Plains. Taken together, those three challenges are enough to make veteran industry observers wonder if Lawhon has taken leave of his senses.

Lawhon, who built Delta King from a small local seed company to one of the top five suppliers of soybean and wheat seed in the Mid-South in 10 years, just shakes his head and smiles. He says he and his management team kept asking themselves that same question in their discussions about beginning the new venture.

But he says they decided they needed to get into the business for one over-riding reason. “Growers need more options in the commercial cottonseed business,” says Lawhon, president of Lawhon Farm Services in McCrory and owner of the recently established Beltwide Cotton Genetics, L.L.C. “Growers need more players in the game.”

Lawhon says he faced a similar situation when he began Delta King Seed Co. in 1992. “We built Delta King because farmers were looking for a different player in the soybean market; a different player with a different attitude.”

The fact that Beltwide Cotton Genetics will be offering seed under its brand in 2003 is the result of a situation that can only be called serendipitous.

“We thought it would take at least two or three years to acquire germplasm and set up a breeding program,” says Lawhon. “But an opportunity presented itself that we just couldn't pass up.”

The opportunity was that of acquiring Texas Originator Cottonseed (TOC), an established and respected cotton-breeding program operating out of Harlingen, Texas. TOC cotton breeder Tom Kilgore has earned a reputation for developing picker varieties with superior yield and fiber quality for the Rio Grande Valley and the Texas Plains.

“I think that Tom would tell you that his first love is cotton breeding, not marketing or running a seed business,” said Lawhon. “We talked about what we had done with Delta King and came to an agreement for a new venture.”

“We think it is a good marriage,” said Rick Rice, marketing and sales director for Beltwide Cotton Genetics. “We think we can start in Texas with those varieties, grow the business there and build back into the Mid-South.”

Rice, who was Southern Region marketing manager for Monsanto before joining Beltwide Cotton Genetics, says the new company will try to continue to build demand in the RGV and Coastal Bend areas for its varieties but concentrate on the Texas High Plains where millions of acres of cotton are grown.

Beltwide Cotton Genetics will introduce three transgenic and two conventional cotton varieties into west Texas in 2003. All three will carry the Roundup Ready trait under a licensing agreement that Kilgore worked out with Monsanto.

Kilgore's varieties were on the market in Texas as TX 24R, TX 28R, TX 30 R, TX 245 and TX 295 in 2002. In 2003, they will be offered as BCG 24R, BCG 28R, BCG 30R, BCG 245 and BCG 295.

“Seed availability for the 2003 production year will be approximately 50,000 bags, which will plant 120,000 to 150,000 acres,” says Rice. “These varieties have proven the most adaptable for the irrigated acres in west Texas. While yields on the variety are outstanding, fiber quality has been even more enticing.”

Gin reports from 2002 field trials of the varieties in west Texas indicate the cotton consistently fell into the premium micronaire range of 3.7 through 4.2, says Rice. In each case, the lint value exceeded the base loan rate of 51.65 cents per pound.

Lawhon acknowledges the company is taking a risk in trying to market picker varieties on the High Plains, an area that has been 98 percent stripper varieties. But he and Rice note the traditional High Plains resistance to picker varieties is beginning to change.

“Growers are seeing the potential for higher yields and higher quality with picker varieties,” says Rice. “Our goal is to go in and help farmers make more money, not by changing cultural practices, but by changing varieties.”

Those varieties could work their way back to the Mid-South in the next two or three years.

“We figure we may have cut three years off the standard breeding program with these new varieties,” says Lawhon. “We have had all three of the transgenic varieties in the Mid-South university trials for one year already. Next year, we will ask consultants to place them in small field trials.

“So far, everything looks good for them. But we don't want to shoot ourselves in the food by introducing them too early.”

flaws@primediabusiness.com