Commodity commissions, PCAs, dealerships, pesticide regulators, agricultural inspectors.
Over the past 12 months, Corteva Agriscience, Bayer CropScience, and FMC — which together represent about half of global pesticide sales — have each announced plans to restructure their businesses.
Corteva and Bayer, in particular, were born during a period of consolidation, based on a genetics-chemicals pipeline pioneered by Monsanto in the 1990s. The logic seemed sound at the time: if you could tightly integrate crop trait development with chemical input requirements, you could extract value from the entire crop production cycle.
Instead, each of these companies has struggled over the past six years, with disappointing financial results and indifference among farmers toward the "digital ag" solutions developed by these manufacturers. Moreover, these companies have key patents that are set to expire in the coming years. Without continued investment, their competitive edge will continue to be blunted, but at the same time, their current financial performance
Corteva appears to be furthest along in its effort to spin off its seed segment, while Bayer and FMC have yet to make more definitive announcements.
Now is a good time to examine how this new period of shifting corporate priorities could affect crop producers, other members of the food value chain, regulators, and the public.
The crop protection divisions of these companies (along with Syngenta/Chem China, BASF, and smaller/niche players) can be broadly divided into two categories: row crops, which are focused on herbicides, and specialty crops, which are more heavily focused on fungicides, insecticides, and miticides.
Analysis of the product portfolios of each company (and other manufacturers and suppliers) and specialty crop exposure to changes in corporate strategy that could affect pricing and availability of these products in the near and long-term picture.
- Where are the key products are manufactured?
- How are human resources and knowledge capital allocated to specialty crop markets?
- What are the overlaps between row and specialty crop protection products?
- How will digital agriculture, which can play a key role in environmental management of crop protection products, play out in this new industry alignment?