Mpi and supply analysis wheat course 270912
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1) The document discusses a market potential index for improved maize seeds in Mexico. It analyzes five dimensions - market size, penetration, capacity, intensity and receptivity - to determine the market potential and ranking of different maize production regions. 2) The Pacific Lowland Tropics region has the highest market potential index at 3.6 based on its scores across the five dimensions. The Bajio and Middle Input regions also have high potential with indexes of 3.2 and 3.3 respectively. 3) The index is intended to help identify priority areas for seed companies to target their marketing and distribution of improved maize seeds in Mexico.
Mpi and supply analysis wheat course 270912
- 1. Market Potential Index and Supply Analysis of Improved Maize Seeds in Mexico Laura Donnet, Ciro Dominguez, Dámaris Lopez y Jon Hellin Advanced Wheat Improvement Course 2012 September 27, 2012 CIMMYT, Texcoco
- 2. Objectives for today Discuss about work of SEP Discuss about MasAgro Note: this is work in progress
- 3. IMIC, objectives Focus is on rainfed production areas in Mexico 1. Raise average maize yield from 2.2 to 3.7 t/ha 2. Increase maize production from 13 to 20 million tones 3. Increase adoption of improved materials in 1.5 to 3 million additional hectares 4. Production and distribution of additional 70,000 t of high quality seed 5. Increase the competitiveness of national companies that target small producers
- 4. Maize yield in Mexico 4 10 9 8 Maize yield (t/ha) 7 6 5 4 3 2 1 0 2004 2006 2008 2010 Maíz amarillo riego Maíz amarillo temporal Maíz blanco riego Maíz blanco temporal
- 5. IMIC, approach Focus is on seed delivery o The diversity of maize production conditions determines specific demands for improved seeds that can be served by the IMIC consortium / network / supply chain o Success depends on involving seed companies in the delivery and distribution of seed innovations o The interaction is in the field of public-private partnerships through agreements between CIMMYT and seed companies 5
- 6. IMIC, conceptual IMIC is a supply chain moving both germplasm and information about performance and remuneration Public R&D (Cimmyt, Inifap, ColPos) Germplasm performance Inbread lines in trials and basic seed R&D remmuneration Seed firms (El Trébol, Bidasem, El Caudillo) Germplasm Commercial performance on seeds producer’s fields Firms’ remmuneration Maize producers 6
- 7. IMIC, market studies Initial assessment of the market demand for improved seeds Initial assessment of the market supply Identification of quick impact areas
- 8. A market potential index for improved seeds A representation of the market size and market profiles of improved maize seeds o Preliminary assessment of the market demand for improved seeds o Identification of quick impact areas Based on five key dimensions of the market demand for improved seeds. A marketing management tool for MasAgro stakeholders 8
- 9. Research questions 9 1. What is the market potential for improved seeds in Mexico in the different production areas? 2. How much improved seed needs to be produced? 3. What are the different market profiles in Mexico?
- 10. Market demand Framework Market potential Market potential Market forecast Market minimum Observed marketing effort Marketing effort Market potential indexes: o Systematic approach to quantifying and ranking market potential o Used by managers to determining which markets to enter and which marketing strategies to use o Examples: • Market Potential Index (MPI) of emergent countries: Cavusgil, 1997; Business Center of Michigan State University, 2011 • Market Potential Value (MPV) of a town: RK Swamy BBDO Guide to Marketing Planning, 2008; Bijapukar, 2004 o Limitations: initial assessment, variables selection, data, algorithm
- 11. Framework, con’t Major concept in Market demand potential measurement dimension Market potential indicator Description Market Maximum number of bags of improved maximum Size (Log of) maize area seeds that can be sold Product penetration Number of consumers who are not yet percentage Penetration Percentage use of improved seed part of the market Combined of farm size, farm Accessibility, acceptability and productivity and socioeconomic affordability resistance and improved Capacity level seed Percentage area with high production Feature of the market situation or Intensity potential increasing-intensity-demand Market Differential profitability with Responding to change and willingness to environment Receptivity improved seed adopt improved seed Market potential for improved seeds: Upper limit as marketing expenditures in a given marketing environment cannot further increase demand Source: Based on Kotler and Keller (2011); GlobalEdge (2011) and RK Swamy BBDO Guide to Marketing Planning (2008)
- 12. Methods 5 1 𝑀𝑃𝐼 𝑥1 , 𝑥2 , 𝑥3 , 𝑥4 , 𝑥5 = 𝑥𝑖 5 𝑖=1 Where xij is the value of the indicator i for the unit of analysis j And x1, x2 , x3, x4 and x5 are the five indicators of the index, as follows: Indicator 1: Maize area Indicator 2: Percentage use of improved seed Indicator 3: Producer capacity is a combined of farm size, farm productivity and socioeconomic level Indicator 4: Production potential Indicator 5: Change in profitability with improved seed
- 13. Methods, con’t
- 14. Methods, con’t Market Market potential Data Source potential indicator dimension Market size (Log of) maize area Area planted to maize Agrifood and Fishery Information (ha) Service (SIAP) Market Percentage use of Sales of improved seed Seed firms penetration improved seed (bags) Market capacity Combined of farm size, Index of social National Council for Evaluation of farm productivity and backwardness Social Development Policy socioeconomic level (CONEVAL) Farm size supported by Support and Services for Agricultural government program Marketing (ASERCA) Procampo (ha) Maize yield (t/ha) SIAP Market intensity Percentage area with Maize production National Institute for Forestry, high maize production potential (ha) Agriculture and Livestock (INIFAP) potential Market Change in profitability Revenue and costs of Strategic Support Program for receptivity with improved seed production with Producers in the Maize and Bean improved seeds and with Chains (PROMAF) criollos
- 15. Results MPI for improved seeds and ranking of maize production regions in Mexico Regions / Dimension Size Penetration Capacity Intensity Receptivity MPI Ranking High Valleys 4.3 4.7 2.0 1.2 4.0 3.2 3 Bajio 3.2 1.7 3.8 3.9 3.4 3.2 4 Central Valleys 2.5 5.0 1.4 2.3 1.0 2.4 10 Pacific Lowland Tropics 4.6 3.3 2.3 3.4 4.2 3.6 1 Atlantic Lowland Tropics 3.7 5.0 1.6 3.8 1.0 3.0 6 Humid Tropics 3.7 4.6 1.5 2.1 3.5 3.1 5 Middle Input 3.6 5.0 2.9 1.6 3.4 3.3 2 Northern Pacific 3.1 0.0 4.6 1.1 4.5 2.7 8 Chihuahua 2.5 1.5 3.8 1.1 4.0 2.6 9 North Central 2.0 2.7 2.6 1.1 1.0 1.9 11 Northern Gulf 1.8 1.5 2.7 4.3 4.5 3.0 7
- 16. Results, con’t Potential and current market size of maize production regions in Mexico (bags) Regions / Bags Potential Current High Valleys 954,197 120,000 Bajio* 337,233 400,000 Central Valleys 122,712 0 Pacific Lowland Tropics 1,485,272 750,000 Atlantic Lowland Tropics 518,473 0 Humid Tropics 534,279 80,000 Middle Input 513,886 0 Northern Pacific* 260,101 900,000 Chihuahua* 127,772 210,000 North Central* 58,039 80,000 Northern Gulf* 76,072 120,000 Total 4,988,034 2,660,000
- 17. Results, con’t Market profiles of maize production regions in Mexico High Valleys Bajio Central Valleys Size Size Size 5 5 5 4 4 4 3 3 3 Receptivity 2 Penetration Receptivity 2 Penetration Receptivity 2 Penetration 1 1 1 0 0 0 Consumptio Consumptio Intensity Intensity Consumptio n capacity n capacity Intensity n capacity Pacific Lowland Tropics Atlantic Lowland Tropics Humid Tropics Size 5 Size Size 4 5 5 3 4 4 Receptivity 2 Penetration 3 3 1 Receptivity 2 Penetration 2 0 1 Receptivity Penetration 0 1 0 Consumptio Intensity Consumptio n capacity Intensity n capacity Consumption Intensity capacity
- 18. Results, con’t Areas of greatest immediate potential Penetra Capacit Intensit Recepti Rankin Region Municipality Size MPI tion y y vity g High Valleys Yecapixtla 3.1 4.7 2.3 5.0 4.0 3.8 17 High Valleys Atlatlahucan 2.6 4.7 2.5 5.0 4.0 3.8 33 Bajio Arandas 3.6 1.7 3.8 5.0 3.4 3.5 148 Bajio Jesús María 3.8 1.7 3.4 5.0 3.4 3.5 166 Miahuatlán de Central Valleys 3.5 5.0 2.1 5.0 1.0 3.3 244 Porfirio Díaz Ejutla de Central Valleys 3.3 5.0 2.1 5.0 1.0 3.3 274 Crespo Pacific Lowland Atotonilco el 3.9 3.3 4.0 5.0 4.2 4.1 1 Tropics Alto Pacific Lowland Tepatitlán de 3.9 3.3 3.9 5.0 4.2 4.1 2 Tropics Morelos Atlantic Lowland Papantla 4.1 5.0 2.1 5.0 1.0 3.4 181 Tropics Atlantic Lowland Acayucan 3.6 5.0 2.4 5.0 1.0 3.4 203 Tropics Hueyapan de Humid Tropics 3.9 4.6 2.2 5.0 3.5 3.8 14 Ocampo Santiago Humid Tropics 3.6 4.6 2.3 5.0 3.5 3.8 21 Tuxtla Middle Input Mocorito 4.0 5.0 3.8 3.2 3.4 3.9 9 Ciudad del Middle Input 3.6 5.0 2.2 5.0 3.4 3.8 16 Maíz
- 19. MPI Features and Managerial Implications Allows comparative evaluation of potential markets: o Reduce complexity o Understand trade-offs involved o Help choice: self-select into serving specific markets To develop over time: o As market information platform: share data, analyzing scenarios, assessing collective performance o As a marketing management tool o For policy analysis: public-private joint analysis: testing opinions and hypothesis, exploring alternative viewpoints
- 20. Maize seed market in México Source: Interviews with seed firms 20
- 21. Maize seed market in México, cont’d Total seed market: 2.9 million bags Multinational companies: National companies: 2.2 million bags 0.7 million bags 24% 21 Source: Interviews with seed firms; SNICS 2010
- 22. Concluding remarks Our supply and demand studies need to become more specific in order to deliver useful information for: o Identifying niches and help develop business plans to target them o Helping the promotion of improved seeds based on information on performance and impact on profitability o Helping coordinate consistent supply of basic seed and parental inbred lines o Developing new tools and relations for germoplasm development and access 22
- 23. Thank you for your attention 23
Editor's Notes
- #5: Genetic improvement and seed product innovation have been a crucial factor in increasing the productivity of maize and the income of producers worldwide.In Mexico, however, and in particular in the rain-fed areas, the demand for improved seeds is heterogeneous and adoption outcome is uncertain.
- #9: The focus is on the development of a representation of the market size and market segments and profiles of improved maize seeds that is useful for identifying and seizing market opportunities. Our proposed MPI is based on five key dimensions of the market demand for improved seeds. The index is applied to examining the potential and limitations for increasing the use of improved maize seeds in Mexico. The possibilities and limitations of the market potential index as a marketing management tool are discussed.
- #10: In this paper, a market potential index (MPI) is proposed for evaluating the growth, opportunities and challenges of the improved maize seed market in Mexico. The MPI for improved seeds in Mexico postulates that improved seed forecasted sales are a function of the area planted to maize, the current use of improved seeds, the maize producers’ economic capacity, the land production potential for maize, and the difference in profitability from using improved seed. The calculated measure is used to examine the following research questions: What is the market potential for improved seeds in Mexico in the different production areas? How much seed needs to be produced? What are the different market profiles in Mexico?