What’s next for Corteva Agriscience

One of three companies created by the “merger of equals” between Dow and DuPont, Corteva Agriscience is the one that’s solely devoted to agriculture as of June 3, 2019. 

 

So what can farmers expect to see from the new firm? A May 2019 meeting between Corteva Agriscience executives with stock market analysts who cover the firm and the agricultural seed/chemical market indicates some of what farmers may see in the future from Corteva Agriscience. 

 

• A more integrated approach between the seed and chemistry components of the former agricultural divisions of Dow and DuPont. DuPont’s agricultural division assets were tilted more to seeds, while Dow’s was tilted toward crop protection. The new firm will have around 67% of net revenues in seed, with 33% in crop protection, says Jim Collins, Corteva Agriscience chief executive officer.  (Its businesses also included its digital agricultural business, Granular.) 

 

• New products are on the way.  “We have launched 14 new products since we announced the merger,” says Collins. These include a fully launched Enlist Weed Control System, as the Enlist E3 seed component was approved by China last January. 

 

This also includes its Qrome corn platform, through which corn insect traits like corn rootworm-resistant ones will be launched. 

 

• Fewer but more efficient regional seed companies. Pioneer is still the firm’s flagship brand, signifying premium service and products, say Corteva officials. The firm, though, has revamped its regional brands, going from 10 to five.

 

While phasing these out:

 

“We had a tremendous amount of overlap across geographies, and a tremendous amount of inefficiency,” says Judd O’Connor, president, U.S. commercial business for Corteva Agriscience. In response, Corteva Agriscience officials trimmed the brands from 10 into five geographically-anchored, focused, and segmented brands, he says.

 

“When you disrupt brands to that degree, there is a big risk,” says O’Connor. “We planned on having some volume loss. We knew there were some folks who didn’t want to make the trip, who were wearing a red shirt and wouldn’t have interest in putting on a blue one. But we are extremely happy with the results we have seen at this point in time.” 

 

Of the 40% points of sale impacted by a brand change, Corteva Agriscience held 85% retention of dealers and points of sale during the change, says O’Conner. 

 

“We had a rapid product line transition, moving them (remaining brands) into stronger Corteva germplasm,” he says. “In 2020, there will be 80% new Corteva germplasm into those brands. We have been able to drive tremendous production efficiencies by leveraging our integrated operations and our seed production footprint that we’ve already got in place with the other brands and the previous Pioneer organization.” 

 

• Digital agriculture will play a big role in Corteva’s strategy, by combining its use with seed and crop protection products. 

 

“There are instances where satellite imagery can guide growers on how to apply crop protection products and see much better results than if they were really just trying to do that on their own without a digital tool,” says Sid Gorham, CEO of Granular, Corteva’a digital agriculture business. 

 

He says Granular takes this into account while designing agricultural software packages that key farm profitability. “Ultimately, what creates substantial value is when a grower makes a different decision than he would have without Granular products,” says Gorham. 

 

Granular’s competitors include firms like The Climate Corporation, Farmers Business Network, Indigo, and others, says Gorham. Gorham says Granular’s competitive advantage comes from Corteva’s broad portfolio that enables Granular tools to link up with Corteva products.

 

One of its products – AcreValue – can also help farmers with land purchase decisions, he adds. 

 

“It’s like Zillow for farmland, where farmers can go online and research any piece of farmland valuation and start to think about how it would work in their operation,” he says. “It is already the most trafficked website in agriculture.” 

 

• Corteva is ramping up the seed portion of the Enlist Weed Control system.

 

So far, Corteva has formed around 100 licensing agreements with seed companies for its Enlist E3 soybeans, says O’Connor. 

 

“We are absolutely entering this space and doing it in a big way,” he says. 

 

O’Connor says both Enlist and Xtend varieties have excellent yielding germplasm.  Studies indicate, though, that there is less potential for off-target movement — if applied according to label directions — with the 2,4-D choline component of the Enlist system than with dicamba, he says. This may make the Enlist technology a better fit for sensitive areas, such as for those growers who farm next to orchards. 

 

“We see a role for both programs from a resistant management perspective, where they can apply different chemistry on different weeds in a rotational program to protect and preserve the access to these chemistries,” says Tim Glenn, Corteva Agriscience chief commercial officer.