The End of Glyphosate

David Frabotta
David P. Frabotta

HERE’S A PREDICTION: The crop protection industry’s $6-billion blockbuster will be half of its current value in 10 years, and Monsanto’s market-leading Roundup brand will be on the auction block in a matter of years, if not months.

As Bayer moves forward with its $66-billion acquisition of Monsanto, the German company will have some tough decisions to make about its product portfolio. Specifically, many analysts and industry sources expect regulators will require the new agriculture behemoth to divest its significant herbicide market share. That means it will need to cho
ose between keeping Monsanto’s glyphosate position or its own glufosinate brand, Liberty.

Looking at market developments, this is an easy choice: Bayer will keep glufosinate and sell its positions in glyphosate. Here are the reasons:
• Regulatory pressure: Glyphosate is the most widely used AI in crop protection, but its share is shrinking due to regulatory scrutiny. The EU re-approved the use of glyphosate through 2017 just two days before its scheduled expiry. The unusual 18-month re-approval is seen by many as a way for member states to build a case to limit or ban its further use. Brazil, another huge glyphosate market, has increasingly shown a tendency to an EU-style hazard-based system, and many regulatory observers fear the U.S. may follow suit.
• Changing seed products: Glyphosate-dependent Roundup Ready seeds are susceptible to an almost-inevitable loss in market share as new seed traits are poised for mainstream commercialization in 2017. Stacked traits that are resistant to glufosinate, dicamba, and 2,4-D will steal planted area away from the ruling Roundup Ready technology. Additionally, advances in gene editing and RNAi will continue to change the GMO dynamic around the world.
• Overproduction: Competition is fierce in the glyphosate market, which has driven profits into the ground for years. Monsanto’s Q4 earnings report warns of continued “pricing headwinds” coupled with lower demand. Overproduction has commodified glyphosate to a point where prices have remained low for five years, and there is no firming in sight. Conversely, just three Chinese companies — Jiangsu Sevencontinent, Hebei Veyong, and Sichuan Lier — were aggressively exporting glufosinate in 2015. Although more companies are producing glufosinate and the industry seems poised to repeat the mistake it made by overproducing glyphosate, glufosinate intermediates appear to be in shorter supply and therefore controllable, giving more power to large producers.
• Antitrust: When announcing the Monsanto deal, Bayer executives declined to make any assumptions about what regulators would require the combined company to divest to meet approval. Many in the industry surmise that glyphosate, combined with the fast-growing $2-billion glufosinate market, is too much of the herbicide market to remain intact.
• Data and R&D: Bayer executives made clear their interest in precision farming and the allure of Climate Corporation as part of this deal (see cover story). Just as Monsanto has done, Bayer looks to be re-adjusting the focus of its portfolio to emphasize data-based farming and next-generation seed technologies over traditional chemistries.
With Bayer’s acquisition of AgraQuest, Monsanto’s BioAg Alliance with Novozymes, and the significant investments both companies have made into precision farming and seed technologies, the combined company appears ready for a life without glyphosate.
All that being said, some companies stand to make significant revenues in the near-term on glyphosate as companies divest their interests. It’s still the world’s most widely used AI, and some notable brands will become available. Roundup could be one of them.

Contact Dave: [email protected]

Topics: , , , , , , ,

Agrichemicals

Agrichemicals

Brazil Suspends 63 Fungicides Targeting Asian Soybean Rust

Resistance of the fungus to fungicides has spread widely in the country.

Africa/Middle East

Farmers Scrutinize Costs as Acreage for Major Crops Decreases

The total planting area of eight staple crops in the United States will decline almost annually through 2026, with acreage

Agrichemicals

Syngenta CEO Expects Merger Regulatory Approval Soon – Reuters

Syngenta Chief Executive Erik Fyrwald expects regulatory approval soon for ChemChina’s proposed $43 billion takeover of the Swiss pesticides and

Agrichemicals

Embrapa, Bayer to Map Mechanism of Soybean Disease Resistance to Fungicides

The Brazilian Agricultural Research Corporation (Embrapa) and Bayer have established a partnership to study the mechanisms that cause soybean pathogenic

Agrichemicals

Jiangxi Heyi to Acquire Stake in Changlong Chemicals

Changlong Chemical’s net assets valuation reached 372 million yuan as of By Dec. 31, 2016, Dec. 31, 2016.

Agrichemicals

Monsanto First-Quarter Profit Up on South America Strength

The company's higher Seeds and Genomics sales in the first quarter included a 25-plus percent increase in planted corn acres in Argentina and more than a 10 percent increase in corn acres planted in Brazil accompanied by double-digit price increases in corn germplasm in local currency in both countries.

Agrichemicals

Monsanto Unveils 2017 Updates on R&D Pipeline

R&D Showcase focuses on reducing inputs, improving grower productivity and identifying ways to mitigate environmental challenges.

Agrichemicals

Arysta LifeScience Introduces Seed Treatment for Soybeans

RANCONA V 100 PRO combines two fungicides that provide both contact and systemic activity against a broad spectrum of diseases.

Agrichemicals

CAC Continues to Expand

Q How will this show compare to last year’s show in terms of exhibitors and attendees? 18th China International Agrochemical

Africa/Middle East

Regulatory Predictability Needed for an Industry Committed to Innovation

The crop protection industry helps millions of farmers grow their crops every year. From Asia to Africa and from Europe

Flag of China
Agrichemicals

Chinese CP Market Saw Negative Growth in 2016 — Where Is the Market Headed?

For the first time in years the Chinese crop protection (CP) market is expected to experience negative growth in 2016.

Agrichemicals

The Path Ahead for M&A

Divestitures following a year of super mergers are around the corner. Know what to expect next, straight from the experts.

Flag of China
Agrichemicals

Glyphosate Price in China Likely to Continue Rising

After a long period of declining glyphosate prices in China, the current season is strengthening confidence for a rebound. The

Agrichemicals

FMC Assumes Full Ownership of FMC Suzhou Crop Care in China

FMC Corp. announced it has taken full ownership of the joint-venture operations of FMC (Suzhou) Crop Care Co., Ltd. (FMS)

Agrichemicals

Facing 2017 with a Smaller Insect-Fighting Arsenal

There’s no way around it: Loss is a central theme this year in dealing with insect pressure in the U.S.

Agrichemicals

Monsanto Shareholders Approve Bayer Merger

Monsanto Company announced that at a special meeting of shareowners held today, shareowners of the company approved the merger of

Agrichemicals

Syngenta’s Talinor Herbicide Receives EPA Approval

Syngenta announced it received Environmental Protection Agency for its Talinor herbicide for control of broadleaf weeds in wheat and barley.

Agrichemicals

DuPont Gets Registration for Luminesa Seed Treatment

DuPont recently received registration approval from the Environmental Protection Agency for  Lumisena fungicide seed treatment. Lumisena fungicide seed treatment improves

Agrichemicals

Syngenta Gets Registration for Fungicide Premix

Syngenta announced that Orondis Opti fungicide premix is now registered and approved for use on specialty and vegetable crops by

Latest News

Industry News

USDA Invests $13.6 Million in Citrus Greening Research

The U.S. Department of Agriculture’s (USDA) National Institute of Food and Agriculture (NIFA) announced four grants totaling more than $13.6

Americas

Bayer, MS Technologies Get China Approval for Balance GT Soybeans

MS Technologies and Bayer have received import approval from China for Balance GT soybeans. The new Balance GT Soybean Performance System will

Agrichemicals

Brazil Suspends 63 Fungicides Targeting Asian Soybean Rust

Resistance of the fungus to fungicides has spread widely in the country.

Africa/Middle East

Farmers Scrutinize Costs as Acreage for Major Crops Decreases

The total planting area of eight staple crops in the United States will decline almost annually through 2026, with acreage

Agrichemicals

Syngenta CEO Expects Merger Regulatory Approval Soon – Reuters

Syngenta Chief Executive Erik Fyrwald expects regulatory approval soon for ChemChina’s proposed $43 billion takeover of the Swiss pesticides and