AgroPages-DuPont discusses its Pioneer business with investors-Agricultural news

Next year will be a "challenging" one for farmers, DuPont said, flagging headwinds to its own prospects from reduced farm prosperity - although the downturn has not dulled the group's appetite for ag-sector deals.

"We do anticipate 2015 will be a dynamic, challenging year for farmers," DuPont spokesman Greg Friedman told investors, citing "reduced net cash income" prospects, as bumper world harvests depress crop prices.

And Mr Friedman noted an "increasingly challenging environment" for DuPont itself, the owner of the Pioneer seeds business, thanks to weaker farm earnings and to "pressure across the globe" on sowings of corn, a big earner for seed groups.

Prices of corn seed fell in Brazil in the July-to-September quarter, fuelling a 4% drop to $1.56bn in the group's ag sector sales, and are expected to continue lower in the current October-to-December period, offsetting growth in the agrichemicals market.

"We expect the weaker environment in ag to continue," said Ellen Kullman, the DuPont chair and chief executive.

Market share losses

The group's own performance this year has faced the extra setback of a drop in share of the North American market, which Mr Friedman said "likely" amounted to 1-2 percentage points, assuming the US Department of Agriculture is correct in pegging total sowings at 90.9m acre.

In soybeans, DuPont, which in June warned on profits thanks to lower seed sales, also estimated a reduction of 1-2 points in North American market share, citing disruption from an upgrade in its offering to new-generation genetically modified products.

However, Ms Kullman said that the crop in corn market share had followed a gain of some seven points between 2008 and 2013.

"We're confident in our future. We gained 1 point last year - this year we lost a little bit," she said.

Appetite for acquisitions

Indeed, DuPont told investors it was "confident in the long-term fundamentals" behind sustained demand growth in agriculture, which the comglomerate saw as one of two areas, with nutrition, it would prioritise for acquisitions.

Asked by one analyst over its appetite for "participating in further major consolidation" in the crop protection and seed sector, Ms Kullman said that agriculture and nutrition were "clearly a focus for us" in deal terms.

"We understand these marketplaces - we understand the competitive strengths and weaknesses, and our own.

"And if we ever see that there's an opportunity where there would be benefit to our shareholders by doing something there, we would absolutely drive it."

Actively engaged

DuPont has actually faced pressure from Trian Fund Management, the activist fund led by Nelson Peltz, to split into two, one piece, so-called "GrowthCo", centred on agriculture and industrial bioscience.

Ms Kullman said that DuPont had been "actively engaged in constructive dialogue with Trian for over a year", and was maintaining talks.

"We do it with all of our shareholders, and those conversations are private," she said.

The comments came in an investor call following DuPont's release of results showing a 20% rise in earnings to $0.54 a share for the July-to-September period, despite a 3% drop to $7.5bn in sales.

The agriculture reported a loss of $55m for the quarter, compared with a $62m loss a year before, reflecting "lower seed input costs and operating cost improvements".