What is Corn States?

By K. Sauer 12/8/2009

For the past 13 years, Monsanto has had a business called Corn States. To some, it’s an everyday term that defines their jobs or businesses. To others, it’s a complete mystery. So, what is Corn States exactly?

“Corn States is an avenue where we take our unique germplasm and trait packages to independent seed companies,” Jim Hedges, president of Corn States, said.

What this means is Monsanto licenses its technologies broadly – to approximately 200 seed companies and distributors across the U.S. – allowing them to integrate Monsanto seed germplasm and/or biotech traits into their own brands. Despite its name, Corn States licenses germplasm and traits for several crops, including corn, soybean, cotton, sorghum and canola, among others.

It might sound like an odd business model, but it takes place in numerous industries. In agriculture, the approach was not widely practiced by major seed companies in the industry until a few years ago, including companies like DuPont’s Pioneer Hi-Bred division and Syngenta. The reason companies choose to license their products varies, but for Monsanto it is to ensure one main thing – farmer choice.

“Years ago, we made the decision to look at how farmers were purchasing seed and to fit [our business] into that model,” John Raines, Monsanto vice president of customer advocacy, said. “Monsanto was investing in better improvements in genetics, as well as improvements in risk management tools like biotech traits. We felt if we brought those to the market only in our brands we couldn’t reach as many farmers with these technologies – but more importantly, this approach would allow farmers to purchase the newest technologies from the people they felt the most comfortable with.”

With that in mind, in 1997 the original Monsanto purchased Holden's/Corn States, suppliers of high quality foundation seed for the corn seed industry. The company continued the Holden’s/Corn States policy of broadly licensing elite corn germplasm and trait technologies to seed companies. While the business now operates under the name Corn States, the seed company approach to licensing remains intact today.

“[These companies] may range from a small regional company to very large seed companies, all of which have very different relationships with farmers,” Hedges said. “Through our licensing model, these companies are able to do business with Monsanto and provide their customers with the industry’s newest technologies – and everyone benefits in the process.”

Licensing seed technologies is not something unique to Corn States. In 2006, DuPont and Syngenta formed GreenLeaf Genetics, a joint venture that licenses corn and soybean genetics to U.S. and Canadian seed companies.

Additionally, the major ag companies – including BASF, Dow AgroSciences, Syngenta and Monsanto – have trait licensing agreements with various seed companies, including each other. With new trait technologies being introduced to the market every year, such arrangements allow farmers access to the products they need on their farms, while giving them the flexibility to buy the seed brands they prefer. And as these new traits have come to market, Corn States has, and will continue to, adapt to earn business from its licensees every year.

“Licensing is really important to Monsanto because it gives us a different approach to the marketplace,” Hedges said. “A lot of farmers really value the independent seed companies, and they want to buy from these companies. Corn States is proud to serve these great independent seed companies with the best germplasm and trait packages available in the marketplace and allow them to support farmers as they work to increase their profitability on every acre they have.”