How Are PGG Wrightson Seeds doing?
Quote:
Originally Posted by
Snoopy
Huge changes since the last time I looked at PGG Wrightson, The world class global seeds business has been sold to DLF Seeds A/S of Denmark.
PGG Wrightson Seeds are no longer owned by PGG Wrightson, the business unit being sold on 1st May 2019. But having opposed the demerger, I can't help asking myself the 'what if' question.
Buyer DLF Seeds A/S of Denmark are a privately owned co-operative and so there is no public annual reporting. They do issue regular newsletters though, and here are some of the comments about New Zealand since the takeover.
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https://www.dlf.com/about-dlf/news-a...=News&PID=1905
Strong half-year result in DLF 25-02-2022
"The Danish seed harvest was above normal in 2021, whereas other seed producing countries in Europe did not reach their normal yields. The New Zealand seed harvest is impacted by rain and looks to be lower than standard. This is also the case in South America where the crop has suffered greatly from dry conditions"
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https://www.dlf.com/customer-support...5market-update
Global pressures keep grass and clover prices high 10-05-2022
"Global issues are affecting production costs for grass and clover seeds."
"More recently, the New Zealand harvest experienced a huge failure, especially in perennial ryegrass and white clover.
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https://www.dlf.com/customer-support...e-driving-seat
Inflation and production costs are in the driving seat 18-10-2022
"A tough economic situation coupled with increased costs for energy, wages, fertilisers, packaging and logistics are pushing up prices for grass and clover seed. In addition, good production prices for other ag-commodities, such as wheat and rapeseed, are making it harder to contract the planned multiplication acreage for grass and clover seed at a competitive price."
"In the southern hemisphere, the January to March harvest was below average, especially in New Zealand where perennial ryegrass and white clover yields were low."
"We’re finding it difficult and expensive to contract new seed production fields for this species. For similar reasons, the usual third-party production from New Zealand also appears to be quite challenging."
"Clovers are short in general. White clover harvested well in Denmark, but increased demand for European mixtures coupled with a continuing shortage in supplies from New Zealand have lifted prices to an all-time high."
"In this era of economic pressures – increasing cost prices and inflation driven by energy and food prices – it’s vital to work with secure and reliable production partners. Since agricultural commodity prices are competing at farm level with grass and clover production, it’s becoming harder to maintain the balance between farmer production prices and an acreage that will cover future demand. Climate change doesn’t help. Dry springs, summer droughts and periods of heavy rainfall make future demand more unpredictable."
"Contracting of new production for the 2024 harvest remains difficult. We expect to see a drop in European acreage for the harvest years 2023 and 2024 caused by production costs and the lure of alternative crops. That means we see firm or further firming prices ahead of us."
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https://www.dlf.com/about-dlf/news-a...bar-in-oceania
New forage grass raises the bar in Oceania 27-02-2023
"Our latest tetraploid perennial ryegrass, Vast, distinguished itself with a high yield in the last part of the season. This variety is ready for launch in spring 2023 and is the first extremely late-heading perennial ryegrass on the market in Oceania. Vast has genetics from the Southwest and Northern Europe as well as New Zealand and stands out due to its fine and dense plant density, strong winter production, good disease tolerance and extremely low aftermath seed head production. These characteristics mean that it continues to produce quality forage even when the quality of most other ryegrasses is declining. This adds significant value for farmers, as late grass production helps to slow the decline in post-peak milk production in dairy systems, and the timing of Vast’s forage production is also ideal for flushing and mating ewes and for beef and lamb finishing."
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It looks like after a tough year in 2022 (ryegrass and clover prices are good, but if you don't have the production you can't get those prices) all that R&D that we PGG Wrightson shareholders paid for in the past might be rising to fruition? A "Vast" improvement coming through?
SNOOPY