The past three years have been nothing if not a flurry of consolidation in the seed industry. Monsanto and Bayer are likely days away from integrating, Dow and DuPont are now known as Corteva Agriscience and Syngenta is owned by ChemChina.
“This recent series of mergers and acquisition events have been the broadest, most impactful ever in the ag crop input industry,” says Garrett Stoerger, partner at Verdant Partners. “While Bayer and BASF continue to adopt the conglomerate approach to participating in ag, DowDuPont has elected to create a pure-play ag entity, while ChemChina is on its way to being the world’s largest industrial chemical company.”
Top of mind for farmers is access to seed choices that address the challenges and opportunities they face. Each of the integrations is at a different phase in the process, but here’s a rundown of what it means to farmers.
Even though ChemChina now owns Syngenta, it’s business as usual and farmers probably won’t notice anything different. Because there has been little change, the company hasn’t dealt with typical integration challenges, like some of its competitors. It simply changed ownership one day and continued operating as before—but with more dollars backing research and investment.
“We’re in an investment phase including seed, technology, traits, etc.,” explains David Hollinrake, Syngenta Seeds president. “We’re doubling down to drive innovation and bring more new products to the market faster to give farmers more and better options. We want to decrease development time by two years and increase new corn hybrids from 19 to 30 a year.”
Corteva Agriscience, formerly Dow and DuPont, merged Aug. 31, 2017, for an estimated $131 billion value. The companies divested products to obtain regulatory approvals, such as some of DuPont’s crop protection portfolio to FMC.
“Our combined capability in Corteva means we’ll bring better products to the market faster through more channels than we could as two stand-alone companies,” says Judd O’Connor, Corteva Agriscience vice president, North America.
The biggest change farmers will notice involves combining seed brands. Brodbeck, Curry, Doebler’s, Pfister and Prairie Brand will be integrated into remaining brands at the end of this year.
Bayer announced its successful acquisition of Monsanto on June 7, 2018. The two companies are operating separately as required by the Department of Justice until necessary divestments to BASF are completed.
“We have always believed the combination of Bayer and Monsanto would mean greater innovation and sustained choice for the farmers we serve,” says Darren Wallis, Bayer vice president, North American communications. “That hasn’t changed.”
Once divestments are completed, which should happen yet this summer, the Monsanto name will retire, but brand names such as DeKalb, Channel and Stone will remain.
“The ‘big six’ [global] pillars have been reduced to only four, citing the need to become more cost effective,” Stoerger says. “Most farmer-facing brands remain intact, having only changed ownership, so the near-term impact will be limited.
“Meanwhile, those familiar with the ‘rule of three’ in business and economics would suggest one more major transaction may still be looming.”
Opportunities for Smaller Companies
When companies consolidate, farmers are often concerned about having fewer options in the marketplace. But that’s not always the case, says Amy O’Shea, FMC North America vice president and business director.
“When companies like FMC pick up divestures from other companies that adds more choice for the grower, instead of products getting discontinued,” she says. “It helps us balance and expand our footprint around the globe.”
This past year, FMC purchased a large portion of what had been the DuPont crop protection business. The move took FMC from 13 research and development sites to 23 worldwide and expanded its staff and research capabilities.