subject: S&W Seed Company Helping to Create Farms of the Future (NASDAQ: SANW) [print this page] S&W Seed Company Helping to Create Farms of the Future (NASDAQ: SANW)
Alfalfa is a flowering, high yield plant in the pea family that is widely used as forage for cattle and mostly harvested as hay. The plant grows in cooler climates and can live up to 20 years, growing to about 3 feet. Medicago Sativa also exhibits an auto-toxicity property which makes growing new alfalfa where alfalfa has already been, very difficult. Often fields where the plant is grown are rotated with other crops in the off season. Another benefit is that the plant induces lactation upon consumption, a vital property when raising some forms of bovine.
In a world of decreasing arable land and difficult weather conditions, the demand for enhanced seeds is becoming more apparent. Through the use of selective breeding, S&W Seed Company has created high saline tolerant, warm climate growing, high yield alfalfa grass seed. The company has a wide product range, the leading varieties of which are 10 Dormancy: SW10, 9 Dormancy SW 9270 and 8 Dormancy: SW8718. SW10 has recently won the award of highest yielding alfalfa in the University of Arizona forage trial of 25 varieties at Tuscon. All of these new breeds fight Fusarium Wilt, Bacterial Wilt, root rot, and are resistant to a plethora of parasitic insects.
On June 16th SANW reported third quarter results noting an increase in net income for the nine months ended March 31st 2010 totaling at $739,556 up 14% from the same period a year ago. Revenues also increased quarter over quarter by 9%. In other SANW news, the company received a purchase order on June 14th for 40,000 pounds of seed in Sudan. Genetics international was the purchaser and the product is expected to ship in July 2010. According to the press release, the Australian seed producers have dominated the Middle Eastern markets for quite some time, but these new high heat and saline resistant seeds could provide a better alternative for production in this emerging market. The Sudan is rumored to be the new "bread basket" of the Middle East, and although the region is turbulent, it is the largest land mass in the region and has the most fresh water.
Richard Penner President of Genetics International commented: "Genetics International has a strong local distributor and good brand recognition among the farmers in Sudan. After our many years of selling high quality vegetable varieties and, more recently, a grain variety, we have over 1 million acres of plantings in 2010 under our Three Circles brand. I think that farmers in Sudan will be eager to adopt our alfalfa seed varieties. They are extremely well suited to local climate and soil conditions."
SANW will be able to penetrate markets through the use of distributors who have already established brand awareness. Especially in the Middle East, where relationships are of utmost importance, this business model will allow them to build trust and sell product internationally.
Currently, S&W Seed Company is trading at $3.71, unchanged for the day.
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