June 12, 2006

 

Megaseed seeks 20 percent of Argentina's wheat area by 2016
 

 

Megaseed, an Argentine seed-maker, has launched an ambitious plan to get farmers to plant 20 percent of Argentina's wheat crop with its seeds by 2016, its chief executive Walter Cellario said in an interview.

 

Megaseed produces naturally modified wheat seeds that offer higher-than-average yields and protein content. The seeds are different from genetically engineered seeds because they have been altered through naturally occurring mutations.

 

Founded in 2004, Megaseed aims to make money not by selling seeds, but rather by buying the wheat produced with its seeds back from farmers and then processing it for resale as a refined good like flour.

 

"Our challenge is to take advantage of the value chain," Cellario said from his office in downtown Buenos Aires. "Our goal is for Argentina to export processed products, from flour to other refined foods, and not just commodities. This is where the added value lies."

 

Cellario says farmers will benefit from this plan because they will pay only a "minimal genetic fee" for the right to use the seeds. This will help farmers save money because buying regular seeds would cost more than paying the genetic fee, which Cellario declined to reveal. Farmers will also benefit from higher yields.

 

Cellario says tests done on farms in the province of Buenos Aires show yields of the company's hard red winter seeds totaling between 7 and 16 tonnes per hectare. Tests conducted in the subtropical climate of Argentina's northern Salta province, where yields are usually lower, produced an average yield of 3.5 tonnes/hectare, which is still 25 percent above the world average of 2.8 tonnes.

 

Cellario expects the average yield on his seeds, known as MegaTrigo, to settle at around 9 tonnes/hectare over the next few years. If the forecast holds, it would put Megaseed's yields above the current global high of 7.84 tonnes that the US Department of Agriculture has forecast for British farmers this season. The USDA's average yield forecast for US yields is 2.73 tonnes while it is 2.54 tonnes for Argentina.

 

Yet while yields are key, Cellario says the quality of MegaTrigo is of even greater value.

 

"The most important thing here is quality of the wheat," he said. "Our seeds produce wheat with very high industrial yields. That is, very high protein content."

 

The average protein content for Megaseed wheat surpasses 15 percent, according to Cellario. That means farmers can sell the wheat for a premium because it easily beats the average 9-11 percent content level in the local market.

 

Megaseed is also working on developing other high-yield seed products, though Cellario declined to discuss them.

 

Megaseed already is conducting tests on MegaTrigo in France, Germany and the U.K. Cellario says the seeds in Germany are doing well under 50 centimeters of snow and will be harvested this summer.

 

In Argentina, farmers will plant around 4,000 hectares of 2006/07 wheat with Megaseed. That's much less than 1 percent of the nation's planted wheat area, which is expected to total around 6 million hectares this season.

 

"We had farmers offer to plant up to 25,000 hectares," Cellario said. "We aim to have 1.2 million hectares planted within the next 10 years."

 

If things go well for the company, the odds may be good.

 

"We have no competition in Argentina," he said. "We're passing from the experimental stage to the mass production stage. And the world needs this type of wheat."

 

Megaseed has filed for patents on MegaTrigo in the European Union and the US

 

Argentina is the world's fifth-ranked wheat exporter.