Founded in 1980 and headquartered in the Central Valley of California, we are
a global agricultural company. Grounded in our historical expertise and, what
we believe is our present leading position in the breeding, production and sale
of alfalfa seed, we continue to build towards our goal of being recognized as
the worlds preferred proprietary forage and specialty crop seed company. In
addition to our primary activities in alfalfa seed, we have recently expanded
our product portfolio by adding hybrid sorghum and sunflower seed germplasm,
which complement our alfalfa seed offerings by allowing us to leverage our infrastructure,
research and development expertise and our distribution channels. We believe
that such diversification will allow us to enter new markets with historically
higher margins.
Our alfalfa seed is produced under contract with growers in the Western United
States, Canada and Australia, and we sell our alfalfa seed varieties in more
than 30 countries across the globe. Historically, we have been recognized as
the leading producer of non-dormant alfalfa seed varieties that have been bred
for warm climates and high-yields, including varieties that can thrive in poor,
saline soils. Our December 2014 acquisition of certain alfalfa research and
production facility and conventional (non-GMO) alfalfa germplasm assets of DuPont
Pioneer, a wholly-owned subsidiary of E.I. du Pont de Nemours and Company, has
provided us with the opportunity to become a leading producer of dormant, high
yield alfalfa seed varieties, which are the varieties suitable for cold weather
conditions. We have licensing agreements with Forage Genetics International,
LLC, a subsidiary of Land O Lakes, Inc. ("FGI") to produce, breed
and eventually sell Roundup Ready® alfalfa seed varieties. As a result,
our alfalfa seed business now encompasses the production, breeding and sale
of non-dormant and dormant conventional varieties and the potential for future
production and sale of GMO (genetically modified organism) varieties.
Since our initial public offering in fiscal 2010, we have expanded certain
pre-existing business initiatives and added new ones, including:
diversifying our production geographically by expanding from solely producing
alfalfa seed in the San Joaquin Valley of California to initially adding production
capability in the Imperial Valley of California, then expanding into Australia
(primarily South Australia) and, most recently, adding production in other western
states and Canada;
expanding from solely offering non-dormant varieties to now having a full range
of both dormant and non-dormant alfalfa seed varieties;
teaming with FGI to develop GMO alfalfa seeds;
expanding the depth and breadth of our research and development capabilities
in order to develop new varieties of both dormant and non-dormant alfalfa seed
with traits sought after by our existing and future customers;
diversifying into complementary proprietary crops by acquiring the assets of
a Queensland, Australia company specializing in breeding and licensing of hybrid
sorghum and sunflower seed germplasm;
expanding our distribution channels and customer base, initially through the
acquisition of the customer list of our then-largest international customer
in the Middle East in July 2011, and thereafter, through certain strategic acquisitions;
expanding our sales geographically both through the expansion of our product
offerings to have product needed in regions we historically did not cover and
through an expansion of our sales and marketing efforts generally; and
implementing a stevia breeding program to develop new stevia varieties that
incorporate the most desirable characteristics of this all-natural, zero calorie
sweetener.
We have accomplished these expansion initiatives through a combination of organic
growth and strategic acquisitions, foremost among them:
the acquisition in July 2011 of certain intangible assets, including the customer
information, related to the field seed and small grain business from Genetics
International, Inc., which had previously operated in the Middle East and North
Africa ("MENA"), and which began our transition into selling directly
to MENA distributors;
the acquisition of Imperial Valley Seeds, Inc. ("IVS") in October
2012, which enabled us to expand production of non-GMO seed into Californias
Imperial Valley, thereby ensuring a non-GMO uncontaminated source of seed due
to the prohibition on growing GMO crops in the Imperial Valley, as well as enabling
us to diversify our production areas and distribution channels;
the acquisition of a portfolio of dormant germplasm in August 2012 to launch
our entry into the dormant market;
the acquisition of the leading local producer of non-dormant alfalfa seed in
South Australia, Seed Genetics International Pty Ltd ("SGI") in April
2013, which greatly expanded our production capabilities and geographic diversity;
the acquisition of the alfalfa production and research facility assets and conventional
(non-GMO) alfalfa germplasm from DuPont Pioneer in December 2014, thereby substantially
expanding upon our initial entrance into the dormant alfalfa seed market that
began in 2012 and enabling us to greatly expand our production and research
and product development capabilities; and
the acquisition, in May 2016, of the assets and business of SV Genetics Pty
Ltd ("SV Genetics"), a private Australian company specializing in
the breeding and licensing of proprietary hybrid sorghum and sunflower seed
germplasm, which represents our initial effort to diversify our product portfolio
beyond alfalfa seed and stevia.
World Agriculture
We believe that one of the biggest challenges of the 21st century will be to
expand agricultural production so that it can meet the food and nutritional
demands of the worlds growing population. According to World Population Prospects:
The 2015 Revision, Key Findings and Advance Tables, published by the United
Nations, Department of Economic and Social Affairs, Population Division, the
world population is estimated to reach 8.5 billion in 2030 and to surpass 9.7
billion by 2050.
Improvements in farm productivity have allowed agriculture to keep pace with
growing food demand. Yield-enhancing technologies such as mechanization, hybrid
seed and crop protection chemicals have enabled farmers to meet the ever-growing
demand for food. Because of decreases in the amount of arable land and shrinking
worldwide fresh water resources, further increases in agricultural production
must come from improvements in agricultural productivity. We address this need
by breeding high-yielding alfalfa seed that is tolerant to inferior, saline
soils, thereby allowing farmers to make marginal soils with inferior water quality
potentially as productive as superior soils.
Alfalfa Seed Industry
Alfalfa seed is primarily used for growing alfalfa hay, which is grown throughout
the world as "forage" for livestock, including dairy and beef cattle,
horses and sheep. It is most often harvested as hay, but can also be made into
silage, grazed or fed as greenchop to ruminant livestock. The alfalfa industry
(and therefore the alfalfa seed industry) is highly dependent on the dairy industry,
which is the largest consumer of alfalfa hay. As markets around the world continue
to expand to a more westernized diet with high-protein consumption, the demands
for alfalfa production around the world continue to increase.
Stevia and the Sweetener Industry
Stevia is a relative newcomer in the estimated over $50 billion global sweetener
market. According to a report released by analysts at Technavio on May 26, 2016,
this market is forecasted to grow at a compound annual growth rate of 4.78%
during the period between 2016 and 2020. Although this market is still dominated
by sugar, sugar substitutes continue to increase in market share as consumer
concern over sugar intake continues to increase. Stevia leaf and its refined
products constitute a natural, non-caloric high intensity sweetener, estimated
to be 200 to 300 times sweeter than sugar. Its taste has a slower onset and
longer duration than that of sugar. It has the advantage of not breaking down
with heat, making it more stable for cooking than other sugar alternatives.
In the U.S., approximately 70% of all new products formulated with stevia are
beverages, with the remainder split between diverse categories, including dairy
products and baked goods.
The stevia plant is indigenous to the rain forests of Paraguay and has been
used as a sweetener in its raw, unprocessed form for hundreds of years. In recent
years, it has been grown commercially in Brazil, Paraguay, Uruguay, parts of
Central America, Thailand, China and the U.S. Currently, the majority of global
commercial stevia production occurs in China.
Sorghum Industry
Sorghum comes in two types, forage and grain, and is considered one of the
indispensable crops in the world. It has traditionally been used for livestock
feed, as well as ethanol, but is gaining increasingly in popularity in food
products in the U.S. due to its gluten-free characteristics, as well as its
antioxidant, high protein, lower fat, high fiber and non-GMO properties. Consequently,
sorghum is becoming a desired substitute for wheat, rye and barley. Additionally,
the pet food industry increasingly utilizes sorghum for its nutritional benefits
and enhanced digestibility.
The U.S. Department of Agriculture (the "USDA") estimates the world
sorghum production for 2016/2017 will be approximately 64 million metric tons.
Industry experts estimate the 2016 U.S. sorghum crop to encompass between 7
million and 8 million acres with the majority of the worlds sorghum grown in
developing countries, primarily in Africa and Asia. Similar to alfalfa, sorghum
grows well in poor soil and drought conditions, thanks to its hardiness, market
versatility and high-quality seed. Sorghum requires less water to grow than
many other crops and is generally used as a replacement for corn and other grains
in areas where water is scarce. In Africa, sorghum can be a food staple for
human consumption.
Sunflower Industry
Sunflowers have multiple specialty uses including oil, birdseed and human consumption.
Our current sunflower seed focus is on the oil market. Sunflower oil is light
in taste and appearance and supplies more Vitamin E than any other vegetable
oil. It is a combination of monounsaturated and polyunsaturated fats with low
saturated fat levels.