The decision may spur a broader global discussion about genetically modified wheat as prices rise and concerns grow that more severe weather could threaten food security. Genetically modified (GMO) soybeans and corn have long been accepted on global markets, but are primarily fed to livestock rather than humans.

Brazil’s biosecurity agency CTNBio said its unanimous decision applied only to wheat flour. Millers had threatened to boycott Argentine grains and said they would seek legal recourse to reverse the flour decision.

“The decision was by a technical agency, but it is important to see what the Brazilian market wants. It looks like consumers in Brazil do not want GMO wheat,” said Gustavo Idigoras, head of Argentina’s CIARA-CEC chamber of grains exporters.

Brazilian flour milling association Abitrigo said it would ask the president’s office to convene a national biosecurity committee to review the decision. It said it was also evaluating legal options to suspend the ruling.

The group had already threatened to stop buying Argentine wheat if sales of the drought-resistant wheat were approved in Brazil, vowing to turn to other countries for supplies.

“It could mean a surge in demand for U.S. wheat if they reject buying it if they fear consumer backlash,” said Arlan Suderman, chief commodities economist at StoneX. “Ultimately, it comes down to the consumer. What is the consumer willing to accept?”

U.S. wheat futures hit their highest in nearly nine years on Thursday due to tight global supplies, while European wheat futures climbed to a 13-1/2 year peak.

U.S. Wheat Associates, which promotes U.S. wheat exports, did not have an immediate comment. The group has previously said it will support commercialization only after approval in major markets and the creation of rules for handling low levels of GMO wheat mixed in with non-GMO wheat.

Just a fraction of Argentine farms have tried out the wheat variety resistant to drought and the common herbicide ammonium glufosinate developed by Bioceres SA, whose partner Tropical Melhoramento Genetico filed the request with CTNBio.

A source at Bioceres said it would seek approval from other key markets before seeking to market the GMO wheat commercially.

Some 55,000 hectares (135,910 acres) in Argentina have been planted with the GMO wheat on an experimental basis, company disclosures show.

Argentine grains exporters have asked the government to identify which farmers are growing the GMO wheat so they could stop buying from those areas.

Santiago del Solar, who grows wheat in the bread-basket Argentine province of Buenos Aires, said the ultimate decision remains in the hands of Brazilian millers and consumers.

“It’s fine that the regulators said yes, but we sell wheat to the milling industry and consumers. If they don’t accept GMO wheat, we still have a big, big problem,” del Solar said.

Argentina exported a total of 8.424 million tonnes of wheat through Oct. 19 this year, with some 50 per cent going to Brazil, which relies on its southerly neighbour for most of its wheat imports.

Argentine farmer Francisco Santillan, who also grows wheat in the province of Buenos Aires, said he will wait to see whether other countries approve imports of the wheat variety before he starts planting it.

“I think the reasonable thing to do, no matter how much Brazil accepts it, is to wait a year to see how the issue evolves in other countries that buy wheat from us,” he said.

— Reporting for Reuters by Ana Mano in Sao Paulo, Hugh Bronstein and Maximilian Heath in Buenos Aires and Mark Weinraub and Julie Ingwersen in Chicago.

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CN now has until the end of Friday to submit a better offer or lose its deal with KCS. At stake is the creation of the first direct railway linking Canada, the United States and Mexico.

KCS’s change of heart came after the U.S. Surface Transportation Board (STB) rejected a temporary “voting trust” structure last month that would have allowed KCS shareholders to receive the $325-per-share cash-and-stock consideration under the deal with CN without having to wait for full regulatory approval.

CP has had its proposed voting trust cleared by the STB. The regulatory certainty this provided convinced KCS’s board to switch to a deal with CP, even though its offer was lower than CN’s, according to people familiar with the deliberations.

There is a silver lining for KCS. The CP offer it now plans to accept, worth $300 per share in cash and stock, is better than the $275 per share cash-and-stock deal that the two companies had clinched in March, before CN gatecrashed it and entered into an agreement with KCS in May (all figures US$).

Were CN to lose out to CP, it would receive from KCS a $700 million breakup fee and would be reimbursed for another $700 million it paid KCS to pass on to CP as a breakup fee for terminating their March deal. CP has said it will cover the cost of this $1.4 billion that KCS would owe CN.

CN has also faced pressure from some of its investors, including hedge fund TCI Management, to abandon its pursuit of KCS.

CN did not immediately respond to a request for comment on its next steps.

The STB said last month that even though the overlap of CN’s and KCS’s networks was confined to 113 km between Baton Rouge and New Orleans, the two railways operated parallel lines in the central portion of the U.S. and could be under less pressure to compete if the voting trust for that deal was approved. It added that it was not making a final determination on whether the competitive issues that the deal faced could be resolved under a full regulatory review.

U.S. President Joe Biden has issued sweeping executive orders aimed at promoting competition in the U.S. economy. One order encouraged the STB to consider Amtrak’s statutory rights when assessing whether a rail merger is in the public interest.

Passenger railroad Amtrak, majority owned by the U.S. government, had opposed CN’s proposed voting trust, saying its pledge to divest the Baton Rouge to New Orleans line will harm future passenger service in Louisiana.

CP reiterated Sunday that its merger with KCS would maintain all existing freight rail gateways and maintain competition in the Baton Rouge to New Orleans corridor, while “creating new north-south lanes” between Western Canada, the U.S. upper Midwest and the Gulf Coast and Mexico.

Also, CP said, its deal with KCS would create a route network that “does not funnel all of its traffic through the congested Chicago area.”

— Reporting for Reuters by Radhika Anilkumar in Bangalore and Greg Roumeliotis in New York. Includes files from Glacier FarmMedia Network staff.

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Australian-British mining firm BHP announced Tuesday its board has approved its potash mine about 60 km southeast of Humboldt, near Jansen, Sask., for another $7.5 billion in development to completion.

At full production, the Jansen mine is expected to yield about 4.35 million tonnes of potash per year, with a position in the “world’s best potash basin” allowing for further expansion. The mine is expected to operate for up to 100 years.

First ore is expected in 2027, with full construction expected to take about six years, followed by a two-year ramp-up period, the company said in a release.

In development since 2010, Jansen lines up with BHP’s current strategy of “growing our exposure to future-facing commodities in world-class assets, which are large, low-cost and expandable,” BHP CEO Mike Henry said in the release.

Its entry into the potash business gives it “increased leverage to key global mega-trends, including rising population, changing diets, decarbonization and improving environmental stewardship,” the company said.

“This is an important milestone for BHP and an investment in a new commodity that we believe will create value for shareholders for generations,” Henry said, noting the mine will be designed with a “focus on sustainability, including being designed for low GHG emissions and low water consumption.”

Getting Jansen to first-stage completion will involve design, engineering and construction for an underground potash mine and surface infrastructure including a processing plant, product storage and a “continuous automated rail loading system.”

The mine’s potash will be railed out for export via the Westshore coal terminal at Delta, B.C. as per a recently announced agreement with terminal operators. The approved funding also covers the infrastructure needed to handle potash at Westshore.

BHP’s investment until now at Jansen has run up to about $5.7 billion, including construction of the shafts and associated infrastructure — already about 93 per cent complete, the company said Tuesday — and engineering, about 50 per cent completed.

The company said Tuesday it has previously acknowledged its “significant initial outlay” at the site, adding that “our approach would be different if considering the project again today.”

“The positive economic impact of this decision for our province cannot be overstated, as the Jansen mine will generate tens of billions of dollars in taxes and royalties and create thousands of quality jobs for the people of Saskatchewan,” provincial Energy and Resources Minister Bronwyn Eyre said Tuesday in a separate release.

Operations at the company’s mine and Saskatoon corporate office will create over 600 jobs in the province, along with about 3,500 jobs at peak construction, Henry said.

‘Excess capacity’

As for the mine’s impact on potash fertilizer markets, BHP said it “anticipate(s) that demand growth will progressively absorb the excess capacity currently present in the industry, with opportunity for new supply expected by the late 2020s or early 2030s.”

That time period, BHP said, is “broadly aligned with the expected timing of first production from Jansen.”

Past the 2020s, BHP said, the industry’s long-run trend prices are “expected to be determined by Canadian greenfield solution mines.”

Solution mines, the company said, tend to consume more energy and water than conventional mines like Jansen, and also have “higher operating costs and higher sustaining capital requirements.”

BHP’s 2010 proposal to build the Jansen mine originally charted a more aggressive pathway into the Saskatchewan potash sector, first by buying junior miner Athabasca Potash, then by launching a takeover bid for Saskatchewan fertilizer giant PotashCorp.

BHP later dropped the PotashCorp bid after it was rejected by both the Saskatchewan and federal governments.

Earlier this year, news reports had quoted unnamed sources as saying BHP was in discussions with Nutrien — formed by the 2018 merger of PotashCorp and fertilizer rival Agrium — about the latter firm taking a stake in the Jansen mine. Nutrien later scotched those reports as “speculative and inaccurate.” –– Glacier FarmMedia Network

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The meat, to be sold as nuggets, will be priced at premium chicken prices when it first launches in a restaurant in Singapore “in the very near term,” co-founder and CEO Josh Tetrick said.

Demand for alternatives to regular meat is surging due to concerns about health, animal welfare and the environment. Plant-based substitutes, popularized by the likes of Beyond Meat , Impossible Foods and Quorn, increasingly feature on supermarket shelves and restaurant menus.

But so-called clean or cultured meat, which is grown from animal muscle cells in a lab, is still at a nascent stage given high production costs.

Singapore, a city state of 5.7 million, currently only produces about 10 per cent of its food but has set out ambitious plans to raise that over the next decade by supporting high-tech farming and new means of food production.

Josh Tetrick said the San Francisco-based firm was also talking to U.S. regulators but that Singapore was a “good bit” ahead of the United States.

“I would imagine what will happen is the U.S., Western Europe and others will see what Singapore has been able to do, the rigours of the framework that they put together. And I would imagine that they will try to use it as a template to put their own framework together,” he said in an interview.

The Singapore Food Agency said it had reviewed data relating to process, manufacturing control and safety testing before granting approval.

Eat Just said it will manufacture the product in Singapore, where it also plans to start making a mung bean-based egg substitute it has been selling commercially in the United States.

Founded in 2011, Eat Just counts Hong Kong tycoon Li Ka-shing and Singapore state investor Temasek among its backers. It has raised more than $300 million since its inception, Tetrick said, and is valued at roughly $1.2 billion (all figures US$).

It is targeting profitability at an operating income level before the end of 2021 and hopes to go public soon after, he added.

Globally more than two dozen firms are testing lab-grown fish, beef and chicken, hoping to break into an unproven segment of the alternative meat market, which Barclays estimates could be worth $140 billion by 2029.

Competitors have also attracted some eye-catching investors.

U.S.-based Memphis Meats raised funds this year in a deal led by Japan’s SoftBank Group and Temasek, and also counts Bill Gates and Richard Branson among its backers.

Singapore’s Shiok Meats, which aims to become the first company to sell lab-grown shrimp, is backed by Henry Soesanto of Philippines’ Monde Nissin Corp., which also owns Quorn.

— Reporting for Reuters by Aradhana Aravindan, John Geddie and Anshuman Daga.

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BHP, in an operational review document released Tuesday for its quarter ending Sept. 30, said its board has approved another $272 million to complete the watertight concrete and steel shaft linings for its “Stage 1” potash mining project at Jansen, Sask., about 65 km southeast of Humboldt (all figures US$).

The added funding, which brings the total budget to $3 billion, comes as the project “remains on track” to be presented to the company’s board for a “final investment decision” sometime in mid-2021.

The budget boost, BHP said Tuesday, is “a consequence of the challenges encountered earlier with placement of the shaft lining and then the more recent impacts from our COVID-19 response plan.”

BHP earlier this year had cut back its final shift lining work to focus on one shaft — “as part of our COVID-19 response plan to reduce our on-site interprovincial workforce,” the company said — but resumed work on both its 1.005-km-deep service shaft and 975-metre production shaft at Jansen in June.

While the board’s final decision is yet to be made, BHP said the Jansen operation “remains well positioned with attractive medium- to longer-term commodity fundamentals, and is set to be a high-margin, low-cost, long-life asset with multiple basin-wide expansion opportunities.”

That said, “as always, we will be disciplined about our entry into the market and it must pass our strict capital allocation framework tests.”

BHP said it’s also still choosing a port option somewhere on North America’s west coast, from which it would export potash produced at Jansen.

The Jansen project, which BHP has had on its radar since 2009, has been due to go to BHO’s board for final approval as far back as 2013. The company had said in October 2019 it expected to present the project to its board around February 2021.

If granted, such an approval would see an estimated $17 billion spent to fully develop the Jansen mine.

BHP, in making a business case for the mine, had projected in May last year that the world’s excess potash supply capacity will be used up by the middle of the next decade.

The Jansen site is one of five major projects BHP has underway, also including petroleum, copper and iron ore operations, with combined development budgets of $10.9 billion. — Glacier FarmMedia Network

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The deal was valued at $7.6 billion when it was announced in August 2019 (all figures US$).

The FTC action was the final antitrust approval needed, and the proposed transaction is on track to close in early August, Elanco said in a statement.

To win antitrust approval, the FTC said it required the companies to sell assets related to oral treatments to kill fleas on dogs, an inflammation of dogs’ inner ears and some pour-on cattle insecticides which control multiple insects.

The deal won EU antitrust approval in June and Canada’s conditional approval earlier this month.

“This approval marks the near-final step in fulfilling our vision of bringing together two dedicated animal health companies,” Elanco CEO Jeff Simmons said in a statement.

The transaction would create the world’s second largest animal health company, with analysts expecting the $44 billion animal health sector to grow by five to six per cent per year, driven by an increase in livestock farming and spending on pets.

The FTC said that Elanco agreed to sell its canine ear medicine Osurnia to Dechra Pharmaceuticals, its dog flea medicine Capstar to PetIQ Inc., and its U.S. cattle pour-on insecticide treatment StandGuard to Neogen Corp.

— Reporting for Reuters by Diane Bartz.

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Brazil is the world’s largest exporter of soybeans, the vast majority of which are genetically modified organisms (GMO). Many newer GMOs, however, are not used in Brazil because they are not approved for sale in China, the largest customer for the Brazilian farm sector.

“Brazil’s private sector can only effectively use new technologies with the importation authorization by the Chinese biosecurity committee,” Araujo said at an event on Brazil-China co-operation in the farm sector. “It is necessary to better fine-tune the approval of Brazilian GMOs by the Chinese government.”

His comments underscore an attempted shift by the new Brazilian government to a more pragmatic approach in its relations with China, avoiding the skeptical rhetoric from President Jair Bolsonaro’s campaign and Araujo’s own writings on the rise of the Asian country.

The Chinese committee now takes roughly five to six years to approve new GMOs, compared with about 240 days for approvals in 2010, said Orlando Leite Ribeiro, international affairs secretary at the agriculture ministry.

China’s ambassador to Brazil, Yang Wanming, told reporters on the sidelines of the event that the Asian country considers co-operation with Brazil on GMOs important. But China also takes food safety seriously and must ensure the safety of new GMO products under Chinese law, he said.

— Jake Spring reports on Brazilian agricultural, environmental and resource sector policy for Reuters from Brasilia.

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The German drugmaker had received all required approvals from regulatory authorities, it said in a statement on Monday.

“Bayer will remain the company name. Monsanto will no longer be a company name. The acquired products will retain their brand names and become part of the Bayer portfolio,” it said.

Bayer launched a six billion-euro (C$9.1 billion) rights issue on Sunday, a cornerstone of the financing package for the deal, shortly after clearing the last major antitrust hurdle in the U.S.

The deal is the first of a trio of major U.S.-German merger deals to cross the finish line at a time of harsh criticism by U.S. President Donald Trump of Germany’s trade surplus with the United States.

Deutsche Telekom’s T-Mobile US plans to merge with Sprint for US$26 billion, while industrial gases makers Linde and Praxair are also seeking to combine.

Bayer was expected to rid itself of the target’s name. Monsanto, the largest — though not the only — maker of genetically modified seeds, has been a lightning rod for environmentalists’ opposition to the technology.

The U.S. seed maker has also drawn criticism for pursuing its intellectual property rights with farmers, many of which depend on its seeds, more aggressively than its peers.

“We aim to deepen our dialogue with society. We will listen to our critics and work together where we find common ground. Agriculture is too important to allow ideological differences to bring progress to a standstill,” Bayer CEO Werner Baumann said in the statement.

The companies’ separately listed Indian units, Bayer CropScience Ltd. and Monsanto India Ltd., will continue to operate independently for the time being, Bayer said in a separate statement.

— Ludwig Burger is a Reuters correspondent covering the European chemicals sector from Frankfurt.

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Cade’s commissioners voted 4-2 in favour of the tie-up under an agreement, negotiated between the companies and global antitrust agencies, that included the sale of several of Bayer’s assets to BASF.

Approval of the transaction in Brazil, a powerhouse producer of grains and other agricultural commodities, clears a crucial hurdle for the deal, which the companies initially aimed to have approved by the end of 2017.

The transaction, valued at US$66 billion when announced in September 2016, would create the world’s largest seeds and pesticides company. The value of the deal has since been revised to $63.5 billion as Monsanto reduced its debt load.

The companies are waiting for approval of the deal in jurisdictions including the European Union and the U.S., where final rulings are still pending.

In Brazil, the transaction faced fierce opposition from soy and cotton growers as well as seed producers who thought it would give the combining companies excessive market power.

Rachel Mendonca, an attorney who represented three associations against the deal, highlighted Cade’s imposition of limits on licensing and sales practices by the new company, but conceded she had lost the argument for more asset sales in Brazil.

Earlier this week, Bayer said in a statement it had proposed solutions to allay antitrust concerns in the EU. Bayer had agreed to sell seed and herbicide businesses to BASF for 5.9 billion euros (C$9.03 billion). It emerged this week the offer would also involve divestments of vegetable seeds business in some EU countries, a source familiar with the matter said.

Most of Cade’s board said those measures would be enough to address antitrust concerns laid out by its technical staff in October, when it recommended the deal be blocked or approved with conditions.

— Reporting for Reuters by Bruno Federowski and Leonardo Goy; additional reporting by Ana Mano in Sao Paulo.

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The European Commission had been concerned that the merger of two of the biggest and oldest U.S. chemical producers would leave few incentives to produce new herbicides and pesticides in the future. The deal is one of a trio of mega-mergers that will reshape the industry and consolidate six companies into three.

Asset sales would ensure competition in the sector and benefit European farmers and consumers, the Commission said.

“We need effective competition in this sector so companies are pushed to develop products that are ever safer for people and better for the environment,” European Competition Commissioner Margrethe Vestager said in a statement.

“Our decision today ensures that the merger between Dow and DuPont does not reduce price competition for existing pesticides or innovation for safer and better products in the future.”

The two other big deals in the industry are ChemChina’s $43 billion bid for Syngenta and Bayer’s acquisition of Monsanto (all figures US$).

Dow and DuPont said they were still on target for $3 billion in cost synergies and $1 billion in growth benefits.

The deal is still to be approved by regulators in the U.S., Brazil, China, Australia and Canada, but the companies said they were confident of clearance in all remaining jurisdictions.

Weighty decision

The 1,000-page decision underlined the significance of the merger. In return for the EU green light, DuPont will divest large parts of its global pesticides business, including its global research and development organization.

The unit makes herbicides for cereals, oilseed rape, sunflower, rice and pasture and insecticides for insect control for fruits and vegetables.

Dow, in turn, will sell two acid co-polymer manufacturing facilities in Spain and the U.S., as well as a contract with a third party through which it buys ionomers. The company has already found a buyer in South Korea’s SK Innovation .

“The main surprises here are the inclusion of the pesticides and the exclusion of any kind of seed assets,” Bernstein analysts wrote in a note.

The analysts also said they had expected EU to be concerned about the concentration of seed sales, and that they would require Dow to divest its corn seeds business.

“We see the required divestments here as smaller than we originally expected, due to the exclusion of seed assets.”

Antitrust experts said the regulator’s demand to sell large swathes of R+D facilities could set the benchmark for future deals.

Lobbying group Friends of the Earth Europe criticized the EU decision, saying that the three deals would lead to three companies controlling about 70 per cent of the world’s agrichemicals and more than 60 per cent of commercial seeds.

“This decision to allow Dow Chemicals and DuPont to form the world’s biggest agribusiness company will give giant corporations an even tighter toxic grip on our food and countryside. For the public and nature such mergers are marriages made in hell,” said Adrian Bebb from Friends of the Earth Europe.

Sources said last week that ChemChina’s bid for Syngenta could be approved this week but the timing could slip. Bayer and Monsanto are set to ask for EU approval in the coming months.

— Reporting for Reuters by Foo Yun Chee and Vishaka George.

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