With Bayer AG’s proposed $66 billion (U.S.) purchase of Monsanto Co., the company that invented Aspirin is poised to take on one of the world’s biggest corporate headaches. A potential cure: dropping the Monsanto name. The German drug and chemical conglomerate is considering that move to avoid sullying its reputation, according to people familiar with internal discussions at Bayer who asked not to be named because the talks are private. No decision has been made, and Bayer’s managers will have some time to think: thanks to antitrust reviews in some 30 jurisdictions worldwide, the purchase isn’t likely to be completed before late 2017. Even if the deal goes through as proposed, merging the two companies into the world’s top maker of seeds and crop chemicals will be a challenge. Bayer will need to integrate a company known for making the herbicide Agent Orange for use in the Vietnam War and tangling with environmental groups over genetically-modified crops. One possibility would be to market Monsanto products such as seed corn and Roundup herbicide under the Bayer CropScience name, said Joachim Kregel, who represents independent investors at the German shareholder association SdK. Bayer, after all, brought Aspirin to market in 1899, and in May it topped a ranking of the world’s most reputable pharmaceutical brands from the Reputation Institute, a marketing consultancy. “If anyone can do it, it’s Bayer,” Kregel said.
Negotiations between Bayer AG and Monsanto Co. are advancing toward a deal after the companies made progress on issues including the purchase price and termination fee, people familiar with the matter said. Bayer Chief Executive Officer Werner Baumann and his U.S. counterpart Hugh Grant have had a series of constructive meetings in recent weeks, said the people, who asked not to be identified because the discussions are private. The companies, in talks to create the world’s largest producer of seeds and pesticides, could reach an agreement in the next two weeks, said the people, who cautioned that negotiations could still fall apart or be delayed. Leverkusen, Germany-based Bayer has been examining Monsanto’s financial accounts as it weighs a new offer, people familiar with the matter said earlier this month. Monsanto in July rejected Bayer’s improved $55 billion bid, describing the $125-a-share proposal as “financially inadequate.” An agreement would end months of back-and-forth that followed Bayer’s initial offer in May. Representatives for Bayer and St. Louis-based Monsanto declined to comment. Shares of Monsanto rose 3 percent to $107.60 at 10:09 a.m. in New York, giving it a market value of about $47 billion. Bayer gained 0.6 percent to 96.51 euros in Frankfurt, valuing the company at about $91 billion. Antitrust Race The global agricultural industry is being reshaped as farmers, hurt by lower commodity prices, spend less, pushing seed and chemical makers to consolidate. Dow Chemical Co. and DuPont Co. announced a plan in December to merge and then break into three entities, including a Monsanto-sized agriculture company. China National Chemical Corp. on Monday received approval from U.S. national security officials for its takeover of Swiss agrochemical and seeds company Syngenta AG, seen as the biggest regulatory hurdle that the $43 billion acquisition faces. Approval for ChemChina’s purchase of Syngenta from the Committee on Foreign Investment in the U.S. has given fresh impetus to Bayer’s pursuit of Monsanto. Given that all three agricultural deals will need antitrust approval, there’s an incentive not to be the last one seeking clearance as the market will already have been consolidated by the other deals. Dow and DuPont face months of haggling with European Union regulators who opened an in-depth probe to check whether the combination may reduce competition in areas such as crop protection, seeds and certain petrochemicals. Syngenta said yesterday it’s working closely with “numerous regulators around the world,” and discussions remain “constructive.” Offer Price Baumann, who became CEO in May after more than 20 years with Bayer, remains convinced of the rationale of the combination and is intent on getting the deal done despite initial disagreements with Monsanto over the price, people familiar with the matter had said. Monsanto may be willing to come to the table for $130 a share, Argus Research analyst Bill Selesky said in June. Analysts at Sanford C. Bernstein said the company may decide to sell if Bayer raises its offer to $135 a share. The German company’s promise to pay Monsanto $1.5 billion if the deal doesn’t pass muster with regulators may also not be enough, analysts, including Jeffrey Zekauskas of JPMorgan Chase & Co., have said.
Créateur et coordinateur du rapport Cyclope qui analyse chaque année le marché des matières premières, Philippe Chalmin n'est pas optimiste. Le titre de l'édition 2016 de son ouvrage, « À la recherche des sommets perdus », est assez éloquent. « Rarement, la tendance sur les marchés mondiaux des matières premières et de commodités aura été aussi marquée qu'en 2015, écrivent les auteurs. Pratiquement tous les marchés se sont inscrits en baisse, et celle-ci est en général très forte. » Les cours de nombreuses matières sont ainsi revenus fin 2015 au niveau de 2004 ou 2005. Un terme est mis « au cycle de fortes tensions qui avait justement débuté à cette époque et qui aura duré un peu moins de dix ans, soit à peu près le temps de l'investissement », signale l'ouvrage. Pas de facteur de reprise visible Aucun facteur ne laisse penser qu'une vraie reprise aura lieu en 2016. Cyclope envisage donc une nouvelle baisse de presque toutes les matières premières, à quelques exceptions près comme le sucre, dont les cours profitent d'un déficit mondial, ou le riz. Pour les spécialistes de Cyclope, l'un des problèmes réside dans l'entêtement des producteurs à augmenter la production indépendamment des signaux du marché, et dans leur capacité à encaisser les baisses de prix. Le fret en est un exemple. L'indice du Dry Baltic index, qui évalue la santé du vrac sec, a atteint en 2015 son plus bas niveau depuis 1984. Les coûts opérationnels d'un bateau ne sont plus couverts, mais « il n'est pas certain que le vrac sec ait encore atteint son plancher », estime le rapport. La flotte mondiale pourrait donc conserver ses effectifs en 2016. En blé comme en maïs, le contexte n'est pas si différent. Cyclope prévoit des récoltes mondiales globalement encore excédentaires, alors même que les stocks sont très élevés. Le maïs pourrait en plus souffrir de la baisse de la demande chinoise, le pays cherchant à limiter ses importations. En soja, la Chine devrait continuer à importer, mais les bonnes perspectives de récolte en Amérique latine ainsi que la libéralisation des exportations argentines sont de nature à tirer les prix vers le bas. Difficile de se réjouir, à moins de changer de point de vue : " cette année encore, la faim et la pauvreté ont régressé dans le monde », indique l'édition 2016 de Cyclope.
Depuis le mois de juin, le prix du porc au Québec accuse une réduction de 21 %. Ce qu’on qualifie de baisse saisonnière des prix arrive beaucoup plus tôt que d’habitude. « L’été a été court », constate le président des Éleveurs de porcs du Québec, David Boissonneault. Celui-ci rappelle que les prix enregistrent traditionnellement …
The U.S. agricultural firm Monsanto was only too keen to show off its latest technology this week at its investors day conference. But the glitzy event wasn’t just about impressing investors – it seemed also to be targeted at German chemical giant Bayer, which has made a $64 billion (€56.5 billion) takeover bid for the company. Monsanto has rejected the $125 per share bid, saying it substantially undervalued the company. In the meantime, chief executive Hugh Grant and his team have been keen to highlight how far the company had come this year, amid difficult trading conditions. At the conference, Monsanto touted its digital agricultural subsidiary, The Climate Corp., as a “game changer” that can revolutionize future agro business. The San Francisco-based company uses weather, soil and field data to help farmers develop crop strategies, especially regarding the potential impacts of climate change.
Now that grain prices have dipped below the break even mark, the next cost to decline is rental ground. That was one of the major findings in a report out by Rabobank Aug. 16. The report said that rent values need to begin dropping in 2017-2018 in order to balance with lower commodity prices over the long term. This will mean the value of land will also fall lower. If rental costs don’t fall, then the land assets will face deeper devaluation because farmers will cut and abandon nutrient and crop protection programs. Rental rates need to decline From 2006-2013, an increase in commodity prices drove rental costs to increase. This was a result of the cost of inputs growing at a slower pace than commodity prices, according to Rabobank. However, by 2015, the farm level price for agricultural commodities had dropped below the cost of inputs. According to Rabobank, land rents have not fallen because many farmers still had ample working capital from the profits made in 2006-2013. The availability of cash in the farm business and farmers’ desire to control land in the longer term, combined with land owners’ reluctance to accept reduced income have to led to bidding wars which has kept rental values above breakeven levels. As working capital dries up it will mean an end to the bidding wars for land at rates above the breakeven marks. Land is the primary asset in the production of grains, the cost of land must reflect substantial long-term changes in profitability. In the past funding from government programs helped to sustain breakeven margins with land rentals. However, lower government programs if any are expected. This means that without the government program funding, farmers will not see the same rental price support as in the past. For grain production to continue on the land, land rent levels must decline. Rental cost reduction can be negotiated or rationalized Landowners are going to have understand that either rental costs decline each year of a lease or the farmer could be forced to cut the cost of production inputs which will result in the depletion of nutrients or increased pests which will result in the degrading of the land value. Another result could be that if the rent price remains too high then the landowner may be forced into taking all of the risk of farming the land through custom farming agreements. According to Rabobank, what needs to happen is that landowners must realize the farming economy and negotiate appropriate rental agreements which share risk, such as cost and crop-sharing agreements and help the farmer to avoid long term negative margins. Crop acreage expected to fall The report out by Rabobank states that farmers must reduce the acreage they are farming in order for commodity prices to reach a sustainable level. Currently, only soybean production needs to grow slightly in order to meet demand. The report expected many farmers to shift acreage to soybeans from corn and wheat. However, without adverse weather, the shift in soybean acreage will result in too big of a supply for the demand. No bubble- so far According to Rabobank, the declines in land value over the past two years continue to support the argument that there is a low probability of a bubble in 2016. However, as the fundamental driver of gross margins generated by the land declines, land values will also need to decline, or equity requirements for the buyer will need to be increased in order to compensate for the potential increase of loan amounts relative to market value. Three factors farmers need to keep their eye on when it comes to land values is weather volatility. This year, farmers may see even bigger losses because of the bumper crops expected in corn and soybeans which will mean low land values this year. Another concern is interest rates. They are the most significant threat to land values. A substantial interest rate increase would drive mortgage payments higher and require land values to decline in order for farmer to make a profit. The final factor is the aging farmer and their impact on agricultural land values. As more farmers reach retirement, more will be pressed to sell their land because they won’t want a declining net worth and decreased annual income from rental payments. This would increase the supply of commodity land for sale is likely to depress land values.
Rain causes wheat crop disaster in France * Damage feared in Germany, Poland * EU wheat export supplies reduced HAMBURG, Aug 11 Rain this summer has fallen at the worst possible time for west European wheat farmers, disrupting the harvest and hitting ripe grain plants, which could sprout and lose grain quality, experts said on Thursday. The rainfall is keeping thousands of combine harvesters idle across France, Germany and Poland. In France, the EU's largest wheat producer and exporter, this year's weather-hit wheat harvest could be the worst in around 30 years with poor quality likely to reduce global sales by the EU's largest wheat exporter. The final size and quality of France's crop is still unclear as harvest progress in north France remains slow after repeated rain since July. French analysts Strategie Grains has slashed its estimate of France's soft wheat crop by over 6 million tonnes to 29.9 million for it what called a "disastrous" harvest. Other estimates put the crop at 28 million to 30 million tonnes, down from a record 2015 crop of almost 41 million. Strategie Grains said there were very poor readings for specific weights, one measure of grain quality, but high protein content. Traders said wetness in the north could cause last-minute problems with Hagberg falling numbers, another quality measurement. A third of France's wheat area remained unharvested on Aug. 9, agricultural group InVivo said. In Europe's second largest producer Germany, showers fell on ripe wheat every day this week, raising fears of a last minute loss of both harvest quality and size.
I got the phone call Tuesday - you know the one you always want, but aren't sure you should accept. Marshall county extension educator Bob Yoder called and asked if I was around home. After an affirmative reply, he asked if I was willing to do an interview alongside him for one of the local TV stations. Hesitantly, I agreed. He said great, they would be at my place in about half an hour. The interview focused on the dry weather and its impact on crops. As always, after it’s over and the dust settles, there are things you wish you had said. I think we did a good job conveying the importance of normal precipitation to the grain crops. (We should have included forages as well.) With that in mind, here is what we wanted to convey:
Les exploitations céréalières françaises sont dans le rouge : la moisson n’a jamais été aussi mauvaise. On les pensait à l’abri. Les céréaliers ont longtemps été considérés comme "les seigneurs" de l’agriculture face à leurs collègues éleveurs ou laitiers. Mais depuis quelques années, la situation s’est dégradée. L’été 2016 avec sa moisson catastrophique est en train de les plonger dans la crise. Selon le cabinet Agritel, le rendement ne devrait pas dépasser 5,5 tonnes de blé à l’hectare, soit une chute de plus de 30% par rapport à l’année dernière. Conséquence : la France va, pour la première fois de son histoire, perdre sa place de leader européen de l’exportation de blé au profit de l’Allemagne. Que s’est-il passé ? Alors que la récolte s’annonçait plutôt bonne, les conditions climatiques ont finalement douché les espoirs des céréaliers. "Plusieurs choses se sont conjuguées", explique à Europe 1 Philippe Pintat, le président de l’association générale des producteurs de blé et autres céréales (AGPB). "On a eu peu de luminosité, donc la photosynthèse n’a pas fonctionné et on a eu de l’eau de façon très abondante". Pour ce dernier, "75% du territoire est concerné", avec une situation particulièrement inquiétante en "région centre, en Bourgogne, dans le Grand Est et le bassin parisien".
DuPont Pioneer researchers are reporting the results of scientific studies demonstrating the potential of CRISPR-Cas as an advanced plant breeding technology to increase the productivity and sustainability of agricultural products. This week, Plant Biotechnology Journal features a Pioneer manuscript describing the first application of CRISPR-Cas to improve a corn plant’s own ability to withstand drought stress.
Monsanto Co's Climate Corporation is building a network of in-field sensors to expand the scope of soil, weather and other data flowing into its digital agriculture tools that help farmers increase crop yields and reduce costs, the company said on Wednesday. San Francisco-based Climate also said it will open up its software infrastructure to third-party developers, enabling them to create new applications that enhance the data-fueled services it currently offers. Climate announced a deal with a Kansas-based soil sensor company on Wednesday but did not disclose terms. The goal is to build an Amazon.com-like network of agriculture products and services that the company says will speed innovation and bolster the capabilities of its Climate FieldView platform. "We see it as the Amazon of agriculture, where we're bringing additional apps up onto that platform and where the best apps win," Hugh Grant, Monsanto's CEO, told investors gathered for an investor event in St. Louis on Wednesday. Agriculture companies have spent hundreds of millions of dollars on technologies that capture and analyze detailed data about plants, soil and weather to help farmers increase yields and lower costs. The companies hope to capitalize on what they believe is the biggest step forward in agriculture since biotech seeds. But many farmers, squeezed by tightening farm profits, have not fully embraced the big data offerings. The strategy of opening up the software platform to developers goes beyond the existing data transfer agreements between Climate and other companies, Climate's chief technology officer, Mark Young, said. Monsanto has spent more than $1 billion in recent years on expanding its digital platform, which has not yet grown into a big revenue generator. The seeds and agrochemicals company says data science is the key to its long-term growth and the "glue" that connects its breeding, biotechnology, chemistry and microbes offerings. FieldView services are used on about 92 million acres of U.S. farmland currently, mostly in free services such as field-specific rainfall totals. Only about 13 million acres are enrolled in the platform's premium services.
SAO PAULO, Brazil --The reduction in the Brazilian soybean production on the 2015/2016 crop and the economic crisis have made the soybean processing industries hit the brakes on the second semester of this year. Recently, the processor of agricultural goods Louis Dreyfus Company declared to Successful Farming Brasil that it will temporarily suspend its bean processing activities in two of its units in Brazil, in Jataí (GO) and Ponta Grossa (PR). According to the company, the decision was made due to the market’s current supply and demand status. There are rumors that Cargill is also halting its soybean operations. Aedson Pereira, analyst from Informa Economics FNP, stated that some companies, which he cannot name, are already planning temporary halts for the coming weeks or months in the states of Mato Grosso and Goiás. “Companies are paralyzing their activities due to the moment we are facing, especially with sparse supply and difficulty for buying. This is common in this scenario,” says Pereira.
Algae blooms are nothing new in southern Ontario. Last summer a number of harmful blooms resulted in beach closures and brought to the forefront an alarming trend, as phosphorous runoff turned portions of Lakes St. Clair and Erie into a toxic blue and green mess. The Lower Thames Valley Conservation Authority, along with a number of organizations under the Thames River Clear Water Revival umbrella group, are trying to reduce blooms by 40 per cent. According to Colin Little, Agricultural Program Coordinator with the LTVCA, the blooms are dangerous at their current level but beneficial in moderation. “Forty per cent is where they figure they can reduce blooms so it’s not a risk to our water source,” Little said. “Essentially they’re part of the natural process, algae growth … but at the level they’re releasing right now, there’s an element they’re releasing [that is] toxic – not good for us.” There are a number of causes for algae blooms, including nutrient runoff from farmland. Phosphorous is an ingredient in fertilizer which can drain into major waterways like the Thames River. It’s a problem the Clear Water Revival group wants to address without disrupting farming operations. “Best management practices (BMPs) are needed to manage phosphorus,” wrote Brad Glasman, Conservation Services Manager with the Upper Thames River Conservation Authority. “On agricultural lands, these BMPs could be a suite of practices such as cover crops, or erosion control structures including berms and waterways.” BMPs are not regulations. Rather, they are a set of suggestions meant to help soil development and nutrient retention while limiting phosphorous runoff. Some of these suggestions, like off-season cover crops, are beginning to gain traction in farming circles. “Cover crops is definitely one of the solutions,” Little said. “Having living crop on the field all year around … the root system will retain nutrients. And as an important note, we want to see the crop survive over the winter.” Cover crops vary from ryegrass, to red clover, to tillage radish. Each provides different benefits to farmland and though rarely sold for profit they protect and enhance the soil itself. “It really depends,” said Little. “You can retain more nutrients in your profile. Or you can harvest different cover crops in the spring.” Blake Vince is a farmer near Merlin and a staunch advocate for cover crops. “It’s not just environmentally [beneficial] but financially sound,” Vince said. “A few of the species in my blend have the ability to fix their own nitrogen … and deposit nitrogen in the soil.” In other words, he said, farmers can rely partly on their cover crops for nitrogen instead of depending entirely on applications. “We don’t have good data to support our practices,” Vince said. “And I want good data … because I really believe farmers are not the full culprits of phosphorous. But if it’s contributing to the problem, then we have to sit up and take charge. And if we’re not doing everything we can we have to step up and do better.” The Clear Water Revival will also reach out to local First Nations groups, to help inform water management decisions. Tara Tchir, Project Manager with the Clear Water Revival, wrote about the importance of coordination in a press release sent out Aug. 17. “This is the first time that First Nations have been able to participate in a Thames River management plan,” Tchir said. “The Clear Water Revival is helping us build partnerships that we haven’t had before.” The final step for the time being is monitoring progress. Conservation groups and farmers alike have been encouraged to collect data in terms of Best Management Practices to see how effective they are in dealing with the algae blooms. “Essentially … just like any other industry, these are practices you should be using,” Little said. “To improve soil quality, to improve on yields. I think an important thing to realize … this has been something in discussion for a long time.”
SAN FRANCISCO, CALIFORNIA, U.S. — The Climate Corp., a subsidiary of St. Louis, Missouri, U.S.-based Monsanto Co., on Aug. 17 unveiled what it is calling “an unprecedented advancement in digital agriculture”: the development of the industry’s first network of in-field sensors to relay data on crop conditions back to farmers. According to Climate Corp., the new sensor network will create a true digital agricultural ecosystem to support agronomic decisions farmers make each crop season to protect and increase yield.
Le cabinet Agritel prévoit une diminution drastique des exportations françaises de blé tendre vers les pays tiers pour la campagne 2016-2017. Il table sur 5,1 millions de tonnes (Mt) contre 12 Mt en moyenne. L’Allemagne ravit à la France sa place de leader, avec des disponibilités estimées à 6,6 Mt.
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