Five Points, California
November 11, 2013
The November 2013 issue of Hay & Forage Grower, distributed November 10, 2013, included an article titled “Weather Tightens Alfalfa Seed Supply” which discusses weather issues that have impacted seed production and inventory levels in the non-dormant alfalfa seed market, possibly resulting in a below normal supply of alfalfa seed in 2014. The article was based on interviews of industry executives from several alfalfa seed companies, including S&W Seed Company (Nasdaq symbol “SANW”).
Mark Grewal, president and chief executive officer of S&W Seed, is quoted in the article saying, “About 20% of the alfalfa seed acres were ‘wiped out’ in California’s Imperial Valley, a major production area. All the major alfalfa-seed-producing companies were affected in some way. The common seed market got hurt the worst because it was the last to be harvested. For the last two to three years, there hasn’t been any inventory for non-dormants. S&W is okay, but we’re only okay because we have an Australian operation also. It was a decent harvest year there. It wasn’t a bumper crop; they just finally had a crop after two back-to-back poor years.”
In April of 2013, S&W acquired Seed Genetics International, the largest alfalfa seed producer in the Australia. The vast majority of non-dormant alfalfa seed sold in international markets is produced either in California or Australia, which are in opposing hemispheres and therefore have opposing growing seasons. S&W believes that this year round production and geographical diversity, greatly reduces the risk of individual weather events, which by definition are localized. Based on S&W’s supply diversification, and contrary to what other companies may be experiencing, the Company believes that its current inventory of seed is more than adequate to meet anticipated demand, due to the strength of production in Australia during the 2013 harvest season.
The entire article can be found at hayandforage.com/alfalfa/weather-tightens-alfalfa-seed-supply or at www.swseedco.com/investors/.
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