ForbesCan This Man Feed the World? Billionaire Harry Stine's Quest to Reinvent Agriculture -- Again
By Alex Morrell
This story appears in the April 14, 2014 issue of Forbes.
On one of the windiest days in recent memory Harry Stine, the richest man in Iowa, cranes his neck to examine the elevator shaft inside the 110-foot steel observation tower next to his garage. “The cables look awfully frayed. Who knows if it will last one more time?” he chuckles. Nonetheless, we hop into the elevator cab, he flips the switch to get it moving, and up we go as the wind rips into us at 40mph.
Stine, the 72-year-old founder and owner of Stine Seed, the largest private seed company in the world, built this tower back in 1987 so he could get a good view of his empire, some 15,000 acres of frozen Iowa farmland. Aside from a small, glass-walled house, it’s his only visible indulgence. Once home to his father’s hardscrabble cattle-and-crop farm, Stine has, without attracting any widespread notice, developed some of the most valuable agricultural products on Earth here. With more than 900 patents, Stine sells his coveted soybean and corn seed genetics to agri-giants like Monsanto and Syngenta, nabbing estimated annual sales of more than $1 billion with margins in excess of 10%. Along with his four children, Stine owns almost 100%.
It is a good reminder to those tempted to confine “innovation” solely to the world of Silicon Valley that some of the most impressive and fundamentally important advances on Earth are occurring today in agriculture, and the global epicenter is America’s heartland. The seed market–a $44 billion worldwide industry that supplies crop growers with the essential element they use to plant, harvest and sustain the world’s food supply–is expected to double in the next five years as crops fortified with more resilient genetics improve yield and efficiency. That’s good news since the world’s population continues to grow by about 85 million every year, while arable land remains scarce.
With a combined market value of $320 billion, five publicly traded conglomerates own most of the action: Monsanto, DuPont, Syngenta, Dow and Bayer. Then there’s Stine. Based in Adel, Iowa (pop. 4,000), the dozen or so companies under Stine’s umbrella form an unlikely titan at the heart of the market, directly or indirectly generating revenues from almost 50 million acres of crops in the U.S. each year.
Stine Seed does business with all of the heavyweights and has for more than three decades, primarily because it has something everybody else needs: the best-performing soybean seeds in the business. Through plant breeding, a roughly 10,000-year-old technique that’s not unlike creating Thoroughbred horses or show dogs, Stine has been perfecting the genetic makeup of soybean seeds–primarily used in animal feed and to produce vegetable oils–since the 1960s. The basic technology may be ancient, but an innovative, data-savvy strategy, married with shrewd leadership and a classic midwestern work ethic, has made Stine’s operation best in class. He isn’t bashful about what his small-town company has accomplished.
“Our germplasm–our genetic base here–is the best in the world,” says Stine. “We dominate genetics in the industry.”
Today 60% of all U.S. soybean acreage is planted using genetics developed by Stine’s companies, which also have a strong presence in South America and other international markets. FORBES estimates that Stine’s company–which, among other things, also breeds corn genetics, creates plant traits in its biotech lab and has a small but growing commercial seed sales operation–is worth nearly $3 billion.
While rivals scoff, he now thinks he can double the world’s output of corn, the most popular crop on Earth. By breeding corn seeds genetically predisposed to thrive when planted in high densities, he thinks he can supercharge the engine generating animal feed, biofuels and food for the whole planet. “We’re going to be able to double corn yields very easily,” says Stine. “And apparently a lot of people working in the same industry can’t see that…. They think, ‘How can this be? And furthermore, how can this little farm kid out here be doing this?’”
After seven years of genetic tinkering he’s won plenty of converts. “It’s an insight that will revolutionize the corn industry,” says Dermot Hayes, a professor of agribusiness at Iowa State University. If it works out, it won’t be the first time this farm kid, unknown outside his industry, has changed the world.
A tall man partial to Levi’s and blue button-downs with pens in the pocket, Stine stands on the burnt-orange carpet in his office–a little-changed artifact of the Reagan era littered with the nuts, berries and, especially, mushrooms he likes to forage for (he has a handwritten log detailing when and where he’s found each of the 32,000 morel mushrooms he’s nabbed in recent years). He’s waving several reams of paper, filled with three years of yield results that drive Stine’s corn euphoria. At almost every location they plant them, he says, his seeds outperform any other variety.
The secret to Stine’s golden corn? Efficiency. In the early 1930s, prior to the Dust Bowl, 7,000 corn plants per acre were grown in the U.S., yielding about 27 bushels per acre. Seeds were planted in rows 42 inches apart so horses could traverse the fields. Now 35,000 plants and 150 bushels per acre is common–nearly five times the yield–thanks to modern tractors, fertilizers, pesticides and seeds genetically modified to resist insects and herbicides. But while genetic modification–using biotechnology to insert a genetic trait into a seed–grabs headlines (and stokes health fears, despite overwhelming scientific evidence of safety), traditional breeding programs by seed developers have done just as much to raise yields.
Stine noticed that corn plants hadn’t changed much in generations. Tall has always been sexy for corn, even though less than half of the plant is actually harvested. That means most of the biomass is using valuable resources that don’t necessarily improve a farmer’s yield. The conventional spacing of corn rows has also largely persisted at 30 inches or more in modern agriculture, with narrower rows in use on less than 5% of corn acres in North America as of 2012, according to rival DuPont Pioneer.
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