Company does not expect a material negative impact on 2014 harvest
FIVE POINTS, Calif.,Â Feb. 3, 2014Â /PRNewswire/ –Â S&W Seed Company (Nasdaq: SANW),Â isÂ the world’s largest producer of non-dormant, alfalfa seed varieties. S&W produces alfalfa seed in theÂ San JoaquinÂ and ImperialÂ Valley’sÂ ofÂ California, as well as inÂ South Australia. As of today, it does not appear to S&W that drought conditions inÂ CaliforniaÂ will have aÂ materialÂ negative impact on the Company’s calendar 2014 seed production.
Mark Grewal, chief executive officer of S&W Seed Company commented, “I do not believe that ourÂ alfalfa seed productionÂ willÂ be curtailed in any significantÂ way by the drought. OurÂ CaliforniaÂ production comes from theÂ Imperial Valley,Â which is watered from the Colorado River, and from theÂ San Joaquin Valley, where our seed farmersÂ have access to well water for irrigation. None of our domestic farming is ‘dry land farming’ that relies on rain. Obviously, theCaliforniaÂ drought is totally irrelevant toÂ Australia, where a majority of our seed tonnage is produced.”
Mr. Grewal added, “Achieving good alfalfa seed yields in irrigated fields requires less water compared to other crops. Rain anytime during the cropping season can be a detriment to high yields in alfalfa seed production.Â We are confident that even if there were many more weeks or months of no rainfall, that our yields for the upcoming season would not be materially affected by the current lack of rain.”
Mr. Grewal continued, “As has been reported in various press articles, we would anticipate that the drought conditions will have aÂ negativeÂ effect on ‘alfalfaÂ hay’ production in CaliforniaÂ as well as wheat, corn silage and other forages. This will likely drive the price ofÂ alfalfaÂ hay up. Â Fortunately for S&W,Â the vastÂ majority of our seed customersÂ are based outside ofÂ California; in fact onlyÂ a small percent of our seed sold last year was toÂ CaliforniaÂ customers. Â Higher domesticÂ hay prices often leads to more Imperial Valley farmersÂ growing hay, instead of shifting to growÂ non-certifiedÂ common seed in July and August, making the supply of seed we have to compete against just that much smaller.”
Mr. Grewal concluded, “All of us at S&W are deeply saddened by the punishing effect that this drought is having on manyÂ CaliforniaÂ farm families, amongst whom we share many close friendships. Our deep-felt prayers go out to all of those affected. Despite this tragedy, however, S&W does not anticipate that the drought will have a material adverse impactÂ on either the farmers with whom we contract for alfalfa seed Â or on our own in-house production.”