Food Plot Preparation Why Use Coated Vs. Non-Coated Seeds

January 16, 2016

I have been in the seed industry for 24 years and have sold both coated seed and uncoated seed. The industry has seen a movement in the sales of coated seed. Why is this? There are numerous articles and many of which involve enhanced germination and improved stands. Many of these articles are from companies who sell coated seed or University studies where there is some "bias" vs non-coated seed.

 

Why is there so much coated seed in the market? Competition for sales!!! So many people buy based on price per bag and aren't educated as to tag reading. If you talk to companies that sell coated seed, off the record they will all say "price point" is the reason verses increased germination and improved stands. I've never heard anyone in the industry "verbally say"s they are pushing their seed because of that. So, why coated seed? Let me walk you through the economics.

 

So grower xyz has a SEED LOT of clover. They would charge me or any buyer $3 per pound for that seed. Note that seed could be inoculated verses raw seed. If the grower is told by the purchasing company that they want it coated, the grower will ship the seed down the road to a "SEED COATER."

 

Now that 2000 lb  LOT of seed is at the coater and the coater adds seed coating to the seed, so that there is now 2700 lbs of total materials sitting on the floor. (2000 lbs of seed and 700 lbs of coating materials)

 

The 2000 lbs of clover seed at a cost of $3 per lb totals $6000

The cost to coat that ton is .05 per lb. ($100)

You now have $6100 in product + coating costs. That makes the product cost $6100 for 2700 lbs of material.

 

so uncoated, inoculated seed costs the buyer $3/lb or $6000 per ton

35% coated seed costs the buyer $6100 for 2700 lbs of coated seed, which is $2.26 per pound

 

So if the buyer retails that seed in 50 lb bags for $200 a bag, here is their profit comparisons:

uncoated seed cost of $150 per 50 lb bag would make them $50 profit (25% margin)

coated seed costing $112.50 per 50 lb bag would give them $87.50 profit (43% margin)

 

Lastly, some companies, including the biggest wildlife company in the world have some mixes with up to 50% coated seed. Now that you know what profit margins are for 35% coated seed, see how 50% coated seed makes a companies profit margin look.

 

 

 

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