Bayer Tells Investors It Sees No Financial Hit from Hurricane or Dicamba

From Bayer's glyphosate plant in Louisiana being idle for nearly six weeks to a possible change in planting plans due to input challenges and other market factors, Bayer told investors on Tuesday the company sees no impact on its full-year guidance.

Bayer's glyphosate plant was offline for more than five weeks after taking a hit from Hurricane Ida in late August. As growers across the U.S. are faced with higher prices and possible short supplies of products such as glyphosate and glufosinate, the production problems only fueled concerns. Bayer told Farm Journal just last week the plant was finally back up and running again. 

"We lost five weeks of production. This will, of course, involve some cost that will have an impact on sales, but nothing to any degree that would impact our full year guidance for this year," Liam Condon, president of Bayer's agricultural unit, told investors on Tuesday, Oct. 19.

Bayer also announced what it's calling "continued progress" in delivering customer-focused, sustainable agricultural innovation in an update with investors. Bayer points to its R&D pipeline as how both Bayer and farmers are shaping the future of agriculture.

“As the leader in agricultural input sales, profitability and R&D investment, we have delivered on commercial milestones that will advance our leadership, further increasing confidence in our ability to achieve our goals,” Condon said. “Our leading commercial portfolio, digital platform and unmatched innovation are driving significant value for our grower customers. We are confident the convergence of our technology platforms to drive more customer-centric solutions will deliver above market sales growth and leading profitability as we look out to 2024.”

Bayer also pointed to strong market positions through products such as the Roundup Ready Xtend Crop System in North America. Bayer says it defended its positions as the No. 1 soybean weed control system provider.

However, farmers in states such as Missouri and Illinois saw flooded-out fields in late June and early July, with many forced to replant soybeans. Due to EPA guidelines and the Dicamba label, those farmers didn't have the option to use dicamba as a weed control tool that late in the year. 

So, could that impact planting decisions for 2022? Investors asked Bayer if rising commodity prices could push more farmers to plant corn instead of soybeans. Condon said he doesn't expect the commodity price picture to impact overall soybean seed demand. 

"Most farmers have a fixed rotation between corn and soybeans. They usually look at what they what they had in the past season and aim to rotate to keep the soil fertile," he answered.

There's another wrinkle in what farmers may plant next year: Input availability. From fertilizer to herbicides, supplies are extremely tight. Some economists think input availability may drive planting decisions for next year.