Cal/West Seeds
Woodland, California
http://www.calwestseeds.com/
Recipient of 2009 and 2006 USDA Value Added Producer grants.
Background
The roots of Cal/West Seeds go back to 1939 when the California Ladino Clover Association was formed by 16 Ladino clover growers. Their goal was to improve their market and put production on a stable economic foundation. The “Caladino” brand was established and the name of the organization changed to the Caladino Farm Seeds as other seeds were added to the production and marketing program.
In 1950, another group of seed men formed “Calapproved” with the help of the California Farm Bureau Federation. By 1960, they had land and an office in Modesto, California. In 1969, Caladino and Calapproved merged to form Cal/West Seeds, Inc. In 1973, they purchased a 45-acre research farm in Woodland, near the location of their corporate and research offices. They also established a winter research program in Hawaii. Land was purchased in Wisconsin to establish a Midwest research center in 1975. Caladino already had expertise in the global market, having captured 85 percent of the foreign market after the Second World War. Cal/West continued to acquire germplasm and technology by purchasing breeding programs in the United States, as well as in other countries. Today, 50 percent of the cooperative's market continues to be exported seeds, primarily alfalfa and forage seeds.
Overview of Cal/West Seeds
Cal/West has approximately 150 actively growing members, and 450 as it relates to ownership and retains. Recently, there has been a shift in their business model. In addition to diversifying into new seeds (such as Teff) they are now concentrating on their strengths in the breeding programs and innovating new products for the market place. The Value Added Producer Grant program, which provided funding in 2006, has helped them develop new products such as Hi-Gest hybrid sudangrass that receive a higher margin so they can give their growers higher prices, keeping them in business and providing customers with value-added technologies.They focus on proprietary products, which they wholesale and license to dealers. They develop new varieties that are desired in the market place and then license them to a private distributor who will private label the varieties. The co-op then bags the seed, labels it with the distributor’s label and ships it.
Overview of Producers Choice
Overview of Cal/West Seeds, SRL
Cal/West also has a wholly owned subsidiary in Argentina that distributes their branded products directly through dealers. Argentina is their second largest market. It is called Cal/West Seeds, SRL and it has about 3 million in sales. Business Practices
With the two wholly owned subsidiaries, Cal/West has 50 percent retained earnings and 50 percent retains. They are strong financially with CoBank as their primary lender. They see their bank as a business partner. Fifty million in sales is projected for 2008/09.
The co-op uses consultants for grant preparation, information technology and advertising. They have researchers and salesmen on staff, and the rest of the employees support those functions. Research is about 5 percent of sales in direct costs, while staffing is greater than 5 percent. They are currently moving in the direction of biotechnology, and the investments and risks are greater in that arena, so they proceed with caution.
The biotech research focus is primarily on drought and stress tolerance as well as improved forage quality, with the two big areas being drought and salt. They continue to do conventional breeding, with increasing investments in biotech. They are striving to create value through innovative research while still maintaining a strong classical plant breeding program in order to be in position to introduce new technologies in high-yield, well-adapted cultivars.
The co-op’s primary purpose is to create opportunities for their growers to make a good living. They focus on generating products that are good for them to grow and help them to compete in the market place. For example, StandFast ® alfalfa continues to grow in popularity with alfalfa hay growers and sells for a premium so it’s generating additional income for their producers.
They don’t go to a lot of trade shows; instead, they go to the International Seed Federation convention as well as numerous other trade meetings such as The American Seed Trade Association.
Challenges
Only a few places in the world are suited to growing small seeds commercially. In addition to California and the Pacific Northwest, Cal/West has seed production acreage in Canada, Australia and Argentina. When a drought in Australia recently hurt production, they had to turn away business due to lack of supply. California is a good seed production area, but water concerns as well as competitive pressures from high-value crops such as pistachio and almonds are making it difficult for companies such as Cal/West to put the needed seed production acreage under contract.
The co-op structure is sometimes seen as a negative because of the failures that growers have seen. Even Cal/West board members are familiar with cooperatives that failed because they were members at the time and lost significant amounts of money. But Cal/West has a long history and they are financially strong. Their loyal growers know that their member-owned cooperative will always do what is in their best interest.
For More Information:
Cal/West Corporate Office, 38001 County Road 27, Woodland, California 95695, 530-666-3331
Prepared October 2008.
