What Is a Seed Stock?

Seed stock refers to stocks issued by publicly traded companies that operate within the agriculture industry. These companies specialize in plant research and development (R&D). Most R&D has the aim of producing higher yields from crops.

Companies may develop and market specialized seeds, which have been engineered to withstand certain conditions, such as drought or the presence of pests. These companies also often hold patents for specific seeds and genes.

Key Takeaways

  • Seed stock refers to companies involved in seed production for the agriculture industry.
  • These companies typically modify or engineer seeds to have certain traits.
  • Seed stock is not be confused with seed capital. The latter is money used to start a company.

Understanding Seed Stock

Seed stock is often issued by companies that create seeds for industrial-level agricultural production. These crops include soy, corn, rice, and cotton. Each of these crops has a large global market for the engineered seeds.

Seed companies may also engineer crops for specific purposes. For example, a company may develop seeds for a breed of corn intended only as livestock feed, and another exclusively designed for the production of ethanol. These seeds would be necessarily different from corn seeds intended for human consumption.

In recent years, growing concerns about genetically modified foods (GMF) have brought attention to engineered food crop seeds. GMF are seeds produced from organisms that have had their genes engineered to introduce traits not created through natural selection.

Seed Capital vs. Seed Stock

Seed stock may also be used to refer to the startup capital a company raises to establish itself. This is more often referred to as seed capital, and often comes from the founders' assets, friends, or family. At times, a company will sell a limited number of shares to investors to finance initial operations and growth. Investors then have a stake in the company based on their investment at the outset.

Examples of Seed Stock Companies

Examples of seed stock companies include U.S.-based Bayer Crop Science (formerly Monsanto), Switzerland-based Syngenta, and China-based Origin Agritech.

Bayer holds more than hundreds of biotechnology patents, the most of any U.S. company. Activist organizations concerned with the proliferation of genetically modified crops have centered much of their focus on Bayer. The documentary film, Food, Inc., profiled what was then known as Monsanto. Monsanto responded to their portrayal in the film with a media statement and direct responses to questions from viewers and consumers. Bayer AG acquired Monsanto in 2018.

Syngenta, another prominent global seed company, manufactures some neonicotinoid products. In April 2018, the European Union banned the use of these products except within greenhouses. The European Commission determined that neonicotinoids, which Syngenta uses to coat seeds to protect them from pests, are a threat to bee populations. Syngenta responded by stating it did not believe that the commission’s decision was the "right outcome for European farmers or for the environment."

Origin Agritech (SEED) was founded in 1997 in Beijing and trades on the Nasdaq. It is China's first seed company. The company specializes in crop seed breeding and genetic improvement.