Five Points, California, USA
June 26, 2014
S&W Seed Company (Nasdaq: SANW) today announced the first shipments of dormant alfalfa seed varieties to the People's Republic of China (PRC). This is especially important for S&W, since it is both the Company's first shipment to the PRC, and also the first commercial export of its dormant alfalfa seed. The PRC is a new and potentially large market, representing a multi-million dollar opportunity for S&W Seed Company in coming years.
Mark Grewal, president and chief executive officer of S&W Seed Company, commented, "We are extremely pleased by this eventful day in the company's history. For the last 30 years, S&W Seed Company has focused on the 'non-dormant' alfalfa seed market, comprised of warmer areas where alfalfa hay cuttings are done on a near year-round basis. This shipment into China marks the first time that we offer our 'dormant' alfalfa seed product on a commercial scale, providing the company with a significant growth opportunity."
Last year, S&W announced the initiation of alfalfa hay trials for five of its dormant alfalfa seed varieties in the PRC at four different locations. The purpose of the trials was to evaluate the capabilities of the various S&W dormant varieties, with respect to factors including forage quality, yield and persistence, in certain important growing environments in China. The trials, while essentially an ongoing process, have to date, shown strong results.
The PRC is one of the world's fastest growing markets for dairy products. As the world's most populous nation, with more than 1.3 billion people, the PRC is underserved by its domestic dairies. As the dairy industry continues to grow in China, the nation's ability to meet the nutritional needs of the expanding dairy herd has been hampered due to lower quality and lower yielding alfalfa varieties traditionally grown in the country. Hay exports from the U.S. and other countries to China have hit record levels to meet these shortfalls in feeding the PRC's growing herd of dairy cows. Recent reports suggest a nearly eightfold increase of alfalfa hay being exported to China since 2009.
Mr. Grewal added, "Chinese demand for alfalfa hay has grown significantly over the last few years. The country's farmers are looking for varieties to grow that can maximize the available resources, including diminishing arable land and water. S&W's naturally-bred, dormant varieties are some of the highest yielding varieties in the world. We believe that China has the opportunity to be a significant customer for our unique dormant varieties for years to come and we are excited about this initial sale into the market."
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