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]