Competition is heating up in the lucrative U. S. corn market, as seed industry leaders Monsanto Co. and DuPont Co.’s Pioneer Hi-Bred race to win over farmers with an array of new seed products.
For both, corn is king. It is the largest crop grown in the United States, and is a critical component not only of food, but also of animal feed and the alternative fuel ethanol.
Monsanto, which is seeing revenue erosion in its long-standing herbicide business, is eager to expand its corn business and has set aggressive growth targets.
“Corn is a cornerstone of our seeds and traits business,” Brett Begemann, execut ive vice-pres ident of Monsanto’s global commercial business, told the Reuters Food and Agriculture Summit in Chicago on Wednesday.
Likewise, DuPont, which has seen Pioneer’s historic leadership position in corn slip amid competition from Monsanto, is renewing efforts to build market share.
DuPont is launching new products, enhancing distribution and sales efforts and forming alliances with small, independent seed companies.
“We’ve committed to grow market share in corn one to two points globally this year,” said DuPont’s group vice-president for agriculture Jim Borel.
The company has a series of new corn seeds positioned to roll out in the next few years, including those with enhanced tolerance of weed-killing treatments and insect resistance. These traits will boost yields, increase farming efficiencies, and reduce negative environmental impacts of farming, the company said.
Pioneer is also researching ways to develop corn with sturdy stalk and root structures which can withstand wind-storms.
Releasing a drought-tolerant corn is a key competitive move for both companies. Pioneer plans to roll out a non-transgenic type of corn that needs less water than normal as early as 2010. A genetically modified drought-tolerant corn is also planned in the next five to seven years.
Pioneer president Paul Schickler said the drought-tolerant corn slated for 2010 or 2011 would offer growers a five-to 10-bushel advantage compared with other products.
Monsanto also is pushing drought-tolerant corn to market. The company made regulatory filings this month in the United States and Canada for such corn, developed with Germany’s BASF and planned to launch in 2012.
Monsanto is hoping its new corn products will help boost market share from the current level of about 36 per cent in the United States. It sees corn as a key crop to help the company meet its goal of more than doubling gross profit from 2007 through 2012.
DuPont, which last year saw more than a quarter of its $30 billion in revenue derived from its agricultural and nutrition business, likewise sees corn improvements as part of a strategy to boost U. S. market share from 30 per cent in 2008, which is down from a decade ago when Pioneer controlled more than 40 per cent of the lucrative sector.
DuPont is hoping moves in corn and in the larger platform of agriculture and nutrition will translate to revenue growth of six to eight per cent per year over the next five years.
“They have been the big guys. We have been trying to take share from them,” Monsanto’s Begemann said of Pioneer. “But they are a strong competitor.”