Living In Interesting Times

An old Chinese proverb says “may you live in interesting times.” While most listeners would view this as a positive state of affairs with unlimited potential for growth and prosperity, others see it as a curse, with “interesting” being another word for “dangerous.”

At the 50th anniversary gathering of the Mid America CropLife Association (MACA), both views were on display. According to , founder, president, and CEO for ABG, ag has never been in a time like this.

“We are at an interesting inflection point in the evaluation of the industry, broadly,” said Jackson. “Right now, there are things going on here that weren’t here two years ago and are not forever kind of things such as $3.50 a bushel corn. Then again, two years in this industry is kind of almost forever.”

Market Differences

In particular, Jackson cited several examples of how today’s ag market differs from that of the one a few years back. For instance, the value of the crop protection market was rapidly declining, to around $5.5 billion. In 2007-08, however, the value increased back to $5.7 billion. Meanwhile, seed and trait values have grown to more than $12 billion. Likewise, anhydrous ammonia could be had for $200 to $300 per ton back in 2006. Today, that same amount costs more than $1,000.

“In particular, retailers are facing incredible price risk on crop nutrient purchases, and need to have increased working capital requirements to keep supplies up in this area,” said Jackson.

Still, the future is bright, according to other speakers. “As world population grows and urban areas expand, the quantity and quality of land available for agriculture declines,” said Monty Bayer, U.S. marketing director for Dow AgroSciences. “By 2020, there will be just over 0.2 hectares per person for animal and crop production, compared with almost 0.4 hectares back during the 1970s.”

Todd DeGooyer, Northeast regional director for Monsanto, agreed with this view. “In fact, we were issued a challenge by our CEO Hugh Grant to double yields for corn and soybeans by 2030,” said DeGooyer. “This would mean increasing today’s yield of 150 bushels per acre for corn to 300 bushels and soybeans from 40 bushels per acre to 80 bushels.”

Brad May, strategic business entity lead, seed treatments for Bayer CropScience, added that the need to address alternative fuels and climate change would have an impact on the future direction agriculture takes. “There will be increasing demand for renewable energy and biofuels, not to mention the yield losses through weather conditions and the need to reduce greenhouse gas emissions,” said May. “This will lead to acreage competition between food, fuel, bio-energy crops, and fiber.”

At Monsanto, this quest involves introducing an ever-expanding array of seed traits for growers to pick from. “In 2009, Monsanto plans to launch our YieldGard BT Pro trait,” said De­Gooyer. “This will offer growers multiple modes of action and could help them reduce the amount of crop refuge needed from today’s 50% down to 20%. This added 30% should help them to increase their crop yields.”

Seed Treatments Ahead

Over at Bayer, May said the opportunities for seed treatment are rapidly growing. For example, in soybeans, the marketplace has expanded from $45 million in sales during 2007 to more than $65 million this year. Furthermore, seed treatments are running the gambit of options, from insecticides and fungicides to inoculants and film coatings. “Seed treatments are known to provide better emergence, healthier plants, and disease/insect control,” said May. “But they also contribute to increased yields and complementing the traits themselves.”

Finally, at Dow, the focus is on improving crop protection products to take advantage of the overall industry trends. As Bayer pointed out, crop protection products won’t be disappearing in the near future despite the advances being made in seed traits. “Ag chem will always have a place because Mother Nature always wins out in the long term over our efforts to control it,” he said. “Therefore, we believe there is a strong future for these products.”

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