Seed Producers - How Do They Justify High Cost

sandhill_farms(10 NV)August 6, 2010

I've often wondered how seed producers/sellers can justify the cost of their seeds to consumers, like us? I mean take peppers for example: A few plants with a good yield of peppers can result in hundreds if not thousands of seeds. However, when they're sold you get 10 or 15 seeds in the package for a whole lot of money. Oh sure, I know that harvesting the seeds - drying - etc. can take a little effort, but still...

I don't sell seeds but I'm certainly thinking about dabbling in it. I do know this, I wouldn't sell them for the prices I see the retail market charge. I certainly wouldn't want to hit a home run off of everyone who buys from me. I'd much rather sell a quality product at a fair price.

What are your thoughts on this...

Greg

Nevada

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nc_crn

We home consumers are a pretty small market. It has helped a LOT having seed producers provide kiosks/stand-alone-seed-holders/etc. to provide both advertising/display and not take up shelf space for better selling stuff (like lawn care).

A lot of seeds get sent straight back to the supplier...and some end up on those "99 cents a pack" places or donated to one thing or another for a tax break.

The seed companies also have to provide standards people want that may have the profit margin of nothing (or less) just to get people to buy all their seeds from a 1-stop place.

    Bookmark   August 6, 2010 at 4:13PM
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reyna1(Zone 8)

I think that in order to actually make money they have to sell them for that cost, otherwise it wouldn't be cost effective.

Those 10-15 peppers if grown out have the potential to make 10-15 pepper plants out of which that consumer will not be buying the same pepper again.

I only need 2-3 plants of one type to be set in terms of peppers and even seeds. So I honestly think its a fair price. That and many of us just trade seeds, so that takes us out of the pool to buy seeds as well.

I've seen fruit tree seeds alot more expensive than pepper seeds - as an example - I'm getting ready to buy some kaffir lime seeds (10 for $3.00 plus shipping).

Danny

    Bookmark   August 6, 2010 at 4:15PM
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tsheets(5)

How much do you spend gardening each year?

Between supplies, electricity from starting seedlings, space, time, pest/disease control, etc... it really adds up.

I don't think $0.10 - $0.40 per seed is unreasonable.

    Bookmark   August 6, 2010 at 5:12PM
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sandhill_farms(10 NV)

Please don't get me wrong, I'm not sniveling as I pay the same price as everyone else. I'm not in the seed business so I'm not familiar with the market, it's just something that I was curious about.

Greg
Nevada

    Bookmark   August 6, 2010 at 6:46PM
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farmerdilla

Take a tomato. start the clock. remove the seeds, ferment and dry. Count out 15 seeds to a pkg for one hour, seal the packs. Now figure out how much it costs per pack at $15.00 an hour. Think thats high wages, remember that for $10.00 to the laborer, you also have to pay taxes, social security, unemployment insurance, liability insurance etc. And we have not even figured in the cost of the tomato, the cost of the work space, utilities etc. You also need to pay a lab to run germination test each year on each lot of seed.

    Bookmark   August 6, 2010 at 7:18PM
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shoontok

Price of seed packet $1.99
Price of fertilizer $7.99
Misc other costs $?

Enjoying fruits of Labor $Priceless$

If i can spend 10 bucks and enjoy growing peppers all summer and only have to walk into the backyard to pick possibly hundreds of peppers, its well worth it.

    Bookmark   August 7, 2010 at 5:26PM
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heirloomchefmark(5a)

Now throw in the trouble of isolating varieties.

Growing more than a few varietes in isolation cages to maintain seed lot purity costs a bit and is a general PIA to deal with.

    Bookmark   August 7, 2010 at 6:33PM
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gardendawgie(5)

A farmer growing for seeds can make mega times more money on the seed crop then the veggie crop even selling the seeds wholesale. The markup on seeds is real high.

The seed sellers can purchase seed in bulk lots very cheaply. The cost of the seeds in a package is maybe one cent and sells for 2 dollars. There is a huge profit margin to pay expenses.

The problem is that the business requires one to start small work hard and grow slowly over many many years building up a good reputation.

    Bookmark   August 7, 2010 at 10:42PM
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melikeeatplants

"There is a huge profit margin to pay expenses."

-Then it's not profit if the cost is going to expenses, it's just revenue.

    Bookmark   August 8, 2010 at 10:36AM
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shuniata

The cost of precision machinery, for one.

Here is a link that might be useful: seed counters

    Bookmark   June 26, 2011 at 6:52AM
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sjetski(6b NJ)

Suffice it is to say that businesses are designed to make and sustain a profit.

There are often costs that are hidden to us consumers that impact the product's price and company's profit: (seed counting machines, employees, taxes, benefits, compliance costs, etc etc)

If the seed industry were to artificially lower prices, due to consumer pressure, we would have less seeds to choose from. Companies would only sell seeds to the most popular plants, and the rarer less popular plant seeds would become a lot more rare. Besides, seeds are only a tiny percentage of the cost of gardening. Dish out the $20-$30 to have all of the seed varieties you want, grow out the plants, then cull the non-hybrid seeds for next year. Pretty simple.

    Bookmark   June 26, 2011 at 12:12PM
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tn_gardening

If you are looking for a special variety, you can expect to pay more.

I am not all that picky and can usually find all sorts of seeds at the dollar stores (usually costs me between $.20-$.33 a pack). Granted, those are small packs, but I don't even need/want a dozen seeds.

This year, I found California Wonder, Jalapeno & Hungarian Wax (they had a few others) 3 for $1 at the dollar store.

    Bookmark   June 28, 2011 at 8:08AM
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JoppaRich(7b)

If people are paying for them, they're not overpriced. Thats how the free market works.

    Bookmark   June 28, 2011 at 9:04AM
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smokemaster_2007

Don't forget that seeds are also dated for freshness etc.
People buy the old seeds only if they are cheep-99cent store etc.
Seed sellers probably don't break even on a lot of stuff they grow.
How many varieties do they grow for seed that don't sell?
What was hot last year but a new variety is popular this year...
They are perishable,crop failure due to many things is a big issue too.
Weather shut down a lot of seed venders a year or so ago-Hurricanes,Tornados,rain,hail etc.
I do see what I consider a rip off going on with the Super hots these days though.50 cents and up per seed sucks.
Especially charging $1.00+ a seed for unstable hybrids.

    Bookmark   June 28, 2011 at 5:45PM
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