S&W Seed expands alfalfa seed production

S&W Seed Company said it has commenced farming the company's leased farmland in Kern County, California. While the company continues to contract a majority of its alfalfa seed production from farmers in the San Joaquin Valley of California, farming its own alfalfa seed allows S&W greater control and flexibility.

According to the USDA, alfalfa is trading at record high prices due to shortages. In June 2011, the national average was $180 a ton, compared with $119 in the previous year. The company believes the shortage of alfalfa hay, coupled with record prices, will result in expansion of alfalfa production by farmers in the fall of 2011 and future years.

Mark Grewal, president and chief executive officer of S&W Seed, said, "We are very pleased with the rapid development that is taking place to convert our leased land in Kern County into farming production. The strategic initiative put in place by this management team and Board to become vertically integrated, and to be able to quickly adapt to the growing demands for our alfalfa seed varieties is now in the early stages of coming to fruition. In reviewing the alfalfa seed purchasing patterns this season, in conjunction with the accelerating price of hay, and our expectations for the 2012 harvest based on the data available to us, we believe the accelerated production of this land could yield substantial future returns. We are excited with the opportunities ahead."

The property, which is initially leased through September 2014, is in Kern County located in the southern Central Valley of California, approximately 65 miles from S&W's certified seed cleaning and processing facility in Five Points. The Company was particularly interested in leasing this farmland due to the fact that the acreage has a robust water supply, providing for reliable, consistent irrigation of crops even in years of water shortages. To date, S&W Seed's team of agricultural professionals has laser-leveled the land, commenced installation of irrigation capabilities and planted sorghum on over 200 acres to prepare the land for higher value seed cropping. S&W anticipates being able to commence alfalfa seed production for the 2012 harvest in the coming quarter. The property also provides the company added flexibility for expanded stevia production, as it deems necessary, to meet the growing global demand for the all-natural sweetener rebaudioside-A (Reb-A), which is derived from the stevia leaf.