Mapping Power in the Seed Value Chain: Who Wins, Who Loses, and Why

Index:

1. Introduction

2. Cornered Resources

3. Germplasm

4. The Seed Value Chain

5. Commoditize the Complement

6. Gene Editing Company Hurdles

7. Monsanto vs. Pioneer

8. Potential Avenues for Value Shifts?

9. Final Thoughts

Introduction

Last month, I wrote about The Four Forces Reshaping the Crop Protection Industry, and the month before that I wrote about the The Danger of Dominant Logic and Pioneer’s Blind Spot.

It’s interesting to bring that together with a question to the Corteva executive team on their recent earnings call from an analyst:

The question to me represents an opportunity to unpack the components of the seed industry and how that impacts where competitive advantage comes from in the segment.

Cornered Resources

One of the most renowned books on strategy is Hamilton Helmers 7 Powers.

Helmer’s framework boils strategy down to a single core outcome: durable returns.

The book suggests that strategy is about identifying and building structural advantages that competitors can’t easily replicate. Helmer calls this “power.”

He defines power as any mechanism that sustainably raises a firm’s long-term profitability, then categorizes the landscape into seven forms:

1. scale economies

2. network economies

3. counter-positioning

4. switching costs

5. branding

6. cornered resource, and

7. process power

Seed companies can likely cite several areas within those seven that give them a competitive advantage, but I want to focus on one: cornered resource. 

A cornered resource is an asset that others can’t access on comparable terms and that exclusivity translates into strategic advantage. It can be a proprietary technology, a long-term licensing agreement, unique data, or anything structurally difficult to acquire or substitute. That means, competitors can see the value but can’t replicate the resource at any reasonable cost.

Germplasm

Elite germplasm is a cornered resource in the seed world. Gene editing companies usually do not have access to it, at least not high quality germplasm.

Germplasm is the genetic base of seeds, breeding lines, and genomic libraries. It is the foundation behind every crop variety. Its value compounds over time because improvement is cumulative and path dependent, shaped by decades of breeding decisions, field trials, and data integration. Elite corn germplasm, for example, doesn’t materialize over night, it emerges from crossing inbred lines, evaluating hybrids across environments, and continuously refining traits like yield, standability, and stress tolerance. This process compounds over generations.

Pioneer Hi-Bred, now part of Corteva (and soon to be stand alone again), has been at it since 1926, building a library of corn genetics that companies cannot readily recreate, especially in a traditional venture cycle.

We see this reinforced with the consolidation in the seed industry, particularly in the 90’s and early 2000’s. Companies actively acquiring disparate lines and companies to not only build out germplasm, but distribution:

Why is germplasm so valuable?

First, time is a barrier.

Developing competitive germplasm takes years and cycles, with failure rates high due to environmental variability, which also makes it regional.

The other aspect is that while elite germplasm is not “winner take-all,” it is winner take most. Farmers frequently make seed decisions based on an incremental ~3% yield potential, which means if germplasm is not at the same level, it is very easy for it to be overlooked.

Second, scale and data moats.

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