Planting a global seed corn business
June 14, 1990
One of the privileges enjoyed by the journalist is the chance, when on a story, to meet people he would never meet otherwise and to have a claim on their attention that she would never deserve otherwise. I spent an afternoon with Frank Thorp learning about seed corn, and enjoyed every minute of it.
The magazine editor mentioned below was Howard Muson, then the editor/publisher of Family Business magazine. He wanted a piece on the Thorps and I was in the neighborhood so . . . .
A magazine editor called me up a few weeks ago. Magazine editors are incurably curious creatures, and this one was eager to learn all about international agribusiness and the biotechnology revolution, and the rumored death of the family farm enterprise in an age of predatory corporatism. I told him 1 would try to find out for him—I am an incurably destitute creature—and so found soon myself in Wapella, Illinois.
Suburban Wapella, actually, at the Thorp Seed Co. complex east of town. I was there at the invitation of Frank Thorp, company vice president and a grandson of the founder of the farm from which the family seed business grew. Thorp Seed is the very image of the up-to-date agribusiness firm. There's a laboratory in the basement, an airplane in the shed, and computers in the office. Thorp is one of the five family companies that comprise Golden Harvest Seeds, one of the top five seed companies in the country, formed in 1973 so that smallish, regional companies could pool marketing and research resources and compete with the seed giants like Pfizer and Pioneer.
Frank Thorp was an affable and articulate guide. He had tenure at a big Eastern university, but gave it up for the more stimulating life in Wapella. He is by farmer standards dangerously forthright; a Golden Harvest colleague would tell me later, in effect, that college may teach a man what to say but it doesn't always teach him when.
Frank discoursed about topics from paranoid-possessive management styles to his wife's cookies while we toured the firm's 4,500-acre operation. His van reeked of mothballs. They spread naptha in the warehouses to keep the mice out of the seed bags, and earlier that day Frank had loaded the van with seed for a loyal customer who was planting and had called from his tractor to say that he'd need fifty more bags. Frank is a salesman, and if selling fifty bags means his van smells like a clothes closet for a while, well, at least he won't have to worry about moths in the upholstery.
Driving around rural Wapella with a Thorp is like touring Hyannisport with a Kennedy. Everyone you pass on the road, every person puttering in a house yard or working in a field, is a brother-in-law or cousin. Like all family businesses, the Thorps consider payback on production investments in terms of generations rather than fiscal years.
A big seed company processing works stands out on the farm skyline. Some seed companies simply market seed that's grown by others, but the Thorps grow more of the seed they sell than anybody in the seed corn business. That requires bins and dryers and huskcrs and shellers, and bagging machines and separators, plus warehouses and test plots, even a small fleet of school buses that ferry teenagers to the fields at detasseling time.
It's fairly easy to get into the farm seed business—there are well over 300 brands of seed corn sold in the U.S., most of them mom and pop operations. It isn't easy to get big. Seed corn alone is well over a billion-dollar-a-year business, and it has attracted international firms (most of them chemical companies like Pfizer, Ciba-Geigy, and Sandoz eager to complement their fertilizer and pesticide business) that bought out many of the old homegrown firms.
Those big firms arc anticipating a revolution in farming, and want to be standing at the top of the barricades when it happens. They have invested in biotech research so heavily that their fiscal officers talk bravely about the "burn rate" of R&D capital. Genetic manipulation of corn in the labs promises a better world—well, better for the chemical companies anyway, since they are looking for plants that will be more tolerant of their own weed killers.
The Golden Harvest companies invent a new corn variety the old-fashioned way—they grow it. Combined, the Golden Harvest companies boast a sizable research infrastructure—six breeding stations with labs and greenhouses and forty field stations in twelve U.S. states. It includes a winter field station in Chile, where breeders can grow two generations of soybeans during the U.S. winter, speeding the time it takes to get a promising hybrid from the lab into the bag.
Like most science, plant breeding is a blend of imagination and tedium. In what its inhabitants humorously refer to as "the mole hole" in the basement of the Thorp complex, for example, one finds all the arcana of the trade—germination cabinets with grow lights (where breeders realize every farmer's dream of controlling the weather), cold storage vaults in which germ plasm from around the globe is stored, and thousands of paper packets into which have been placed the seeds (whose genetic provenance has been meticulously noted) scheduled for field tests.
Designing the perfect plant is not cheap. A corn breeder is entitled to brag if he manages to develop one commercially profitable hybrid out of every thousand tries. As another Golden Harvest owner says, good breeders are a different kind of person.
The Golden Harvest cooperative system means that each company can offer locally adapted seeds while still enjoying the improvements otherwise possible only with large, centralized breeding operations. That kind of R&D effort is essential to long-term viability in a business in which the demand for innovation is the only thing that never changes.
Frank Thorp is not convinced that corporate-funded biotech research will drive the family firm from the field. In order to recoup their enormous upfront investment in a hurry, the biotech boys will have to get their designer genes into a lot of corn seed in a hurry, and none of their parent companies (apart from Pioneer, which is by far the industry leader) controls more than a tiny share of the total market. To reach that market, Frank argues, the big firms will have to license their new discoveries to companies like Golden Harvest, which will then produce and sell them, paying royalties to the patent holder.
I was impressed, and said so, and Frank gave me a Thorp Seed cap to take home that is made of real cloth instead of plastic. As I drove home it was impossible, given the habits of my trade, not to speculate on What It All Means. A gubernatorial candidate eager for headlines might point to the firm as a model of how homegrown Illinois firms can compete in a global agricultural marketplace. But that would be to misconstrue their success. They are making it for the same reasons successful people in any field have always made it, because they are smarter, nervier, and more ambitious than most other people—or their daddies were. They may make fertilizer in Milan and grow corn in test tubes, but in essential ways the world hasn't changed. ●
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