Monsanto 1Q17 Earnings Call Notes

10x as much VC investment in Ag as 5 years ago

“Our desire to expand the strong innovation core also stems from the myriads of game changing opportunities that we see in the horizon. We are very clearly entering a new era in agriculture. Hundreds of new entrants invested more than $4.5 billion of venture capital in agriculture in 2015, which is more than 10x the investment from just 5 short years ago. More players than ever are seeking to provide new technologies to growers to enhance productivity, both profitably and sustainably”

Brett Begemann

Growth in planted corn acres in Brazil and Arg

“n the first quarter, we saw greater than 25% increase in planted corn acres in Argentina and more than a 10% increase in corn acres planted in Brazil. This was accompanied by double-digit price increases and corn germplasm and local currency in both countries.”

Able to take price to offset some currency losses

” the change in the currency relationship created part of the opportunity to reach for some of the pricing improvements around double-digits. And by all means even double-digit did not bring back everything that we lost from the past with the currencies. So there is potential opportunity as we continue to look to the future there. At the same time what I think just are more important is the continued performance of our products down there. Intacta continues to do incredibly well.”

Pierre Courduroux

Strength in Southern Hemisphere business

” ongoing results came in better than the prior year on the strength of our Southern Hemisphere business. Our soybean gross profit is up by approximately 50% in the first quarter with 6 points of gross margin improvements, led by Intacta penetration and currency benefits. Corn gross profit grew by more than 30% due primarily to double-digit price mix lift in local currency in both Brazil and Argentina and from strong growth in acres planned in both countries.”

Robb Fraley

Should see gene edited products com into the market place by the middle of the next decade

“Sure, thanks. And it’s great question, PJ. So, may be just a little bit of background on the gene editing commentary. So, I think first of all as you recognize there is a variety of gene editing tools. There is protein base. There is nucleic acid base. And just in the last few weeks, there has been a couple of publications on two brand new gene editing systems that have been discovered. In any case, what these tools allow you to do is to go in and precisely change basically any base pair or any gene in the crop. And so there are very powerful tool for making precise changes. I think the other thing that’s important to highlight is you still need a world class breeding engine, a testing network in order to identify and evaluate the best combinations and those gene-editing traits are going to be introduced into corn and soybean and cotton stacked with the biotech traits that are defining the marketplace today. So, we see them very complementary to the breeding and trait engines that we have developed. And I think they will allow us to further accelerate that rate of gain. And I think the fact that we have now concluded licensing agreements with some of the major players and innovative technologies puts us in a great position to take advantage of these products. I mean some of the first gene editing products and some of the smaller crops are working their way through the regulatory system. As I indicated in my comments, we are now fully utilizing these tools and certainly by the beginning or middle of the next decade we will see these gene-editing products work their way into the marketplace. Really an exciting technology and I think we have created a strong position moving forward into the space.”

Monsanto 4Q16 Earnings Call Notes

Monsanto’s (MON) CEO, Hugh Grant on Q4 2016 Results

Bayer is the right decision for our shareholders

“We unanimously determined that our combination with Bayer represents the most compelling value for our shareowners with the most certainty through the old cash consideration. So with this agreement as the backdrop, our two priorities going forward are as follows. First, delivering on the 2017 operational plan and key business milestones and second, executing on the necessary steps to close the deal which is targeted for the end of calendar year 2017.”

Productivity necessary to meet growing world demand

“This deal was struck because the overarching needs to deliver innovation to growers continues as demand continues to climb. I know that that may seem incongruent especially when corn is below $4 a bushel and soybeans are below $10. However the most recent WASDE report demonstrates that the demand trend remains both in tact and robust. In fact as seen on Slide 8, the trend line is more than $1 billion bushels of growth a year for corn and greater than 500 million bushels of growth a year for soybeans, which is consistent with the historical growth trends. Meeting that demand over the next decade would require a two-fold increase in the rate of yield growth for corn and a four-fold increase for soybeans. Innovation quite simply is the best way to increase productivity to meet this projected demand.”

Thereis little overlap between Monsanto and Bayer

“Yes, Don, thanks for your question this morning. I’d go back to my opening remarks. The unique thing about this transaction is there is very little overlap. So you are bringing together a seed business and a crop protection business and I think we can bring these two businesses together with much better insight for the grower by using digital agriculture.”

High capacity for innovation in improving decision quality on the farm

“So, as you look innovation, I think, number one, the needs never been great, or number two, I think the capacity to accelerate innovation particularly in the area of digital agriculture and particularly in the area of precision agriculture we are developing software and where we are using literally harvested data to improve decision quality on farm.”

Brett Begemann

Plant population growing a bit

“But if you look right now, this coming year or the near-term has been shaping up. If you look at the year we just finished in 2016 and the year we are going into in 2017, you can clearly see the trend continuing across corn particularly in North America where planting populations are increasing a bit and it’s exactly what Hugh was describing. That’s part of how you drive yield as increasing of plants in the field.”

Monsanto FY 1Q16 Earnings Call Notes

http://seekingalpha.com/insight/earnings-center/article/3794576-monsanto-companys-mon-ceo-hugh-grant-on-q1-2016-results-earnings-call-transcript?part=single

Monsanto Company’s (MON) CEO Hugh Grant on Q1 2016 Results – Earnings Call Transcript

Start with the topic of industry consolidation

“I’d like to start the talk today with a topic of industry consolidation right at the beginning. First, we have an incredible standalone growth plan backed by our commitment to innovation and the industry’s broadest, deepest and most important pipeline. Second, we expect industry consolidation to continue and it should given the opportunities for significant synergies and value creation and R&D across the industry.”

Two of our largest competitors are combining

“Yes, two of our largest competitors recently announced that they’re combining but they’re also two of our largest technology licensees and we expect that to continue given the opportunities of our unparallel pipeline.”

Currency headwinds have gotten worse thanks to actions in Argentina

“the headwinds from currency and commodity prices that we outline at the start of this fiscal year have not yet abated, and in fact currency has become a much stronger headwind with the recent events in Argentina. We are pleased to see the early decisive approach of the new President and we believe that his actions, particularly the lifting of export taxes in grain will create longer-term benefits for agriculture for which we’re well positioned to participate. However, the approximate 35% to 40% devaluation of the Argentine peso is expected to create an estimated $0.20 to $0.25 charge in Q2”

Industry challenges mean that integration with Syngenta would be even bigger boost

“A lot has changed in the industry since last spring. The industry has gotten tougher and I would say we expected some of that. The operating environment has become tougher as well. And I think because of that, there’s a greater need now than there was last spring to be able to quantify what that opportunity would look like and quantify what that integrated platform would look like. So, engagement becomes more important now than it did before with Syngenta and we haven’t seen much progress on that front.”

Dow Dupont will change things

“I can’t really speculate. They are big. I think this makes them the biggest in the world, but as Rob said they are also a customer. So we will continue our licensing efforts with them. There’s clearly going to be a disruption how you bring two entities of this size together but I think that’s really more for them to comment on than us.”

Maintain innovation pipeline in tough times

“We’ve talked since last spring we’ve talked about continuing to focus on our core and as the industry as a sector goes through a tough time, you need to double down on that. We’re managing our costs but at the same time we’re not shorting on innovation. And I think we are more successful in that innovation drive than anyone else in the space, so I kind of like the cards that we hold. But I think there’s going to continue to be consolidation in this space when you see what’s happening with commodity prices today.”

Brett D. Begemann

Pierre Courduroux

Dr. Robert T. Fraley

Earnings Call Notes & Investor Presentations – Monsanto & Goldman Sachs – 10.8.2015

Monsanto (MON) CEO Hugh Grant said the company performed well in spite of a challenged macro environment and headwinds in the agricultural sector

“Despite weakening global currencies and commodity prices, we continue to view this as a time of opportunity, but a balance of innovation and discipline can grow our long-term competitive position. There’s always the possibility of fluctuations in the short-term market conditions, but that doesn’t define the overall opportunity or the continued long-term growth trends.  We fully recognize that these are tough times in agriculture and we are committed to continue to drive these advantages in our core business through renewed discipline and focus.”

But went on to say that secular demand for their end products remains healthy

“Macro demand remains robust. In fact, the world is consuming the current oversupply at a record pace with demand for corn growing by an average of 1.3 billion bushels per year over the past three years. More than 90% of this growth in demand over this timeframe has been driven by feed and underpinned by middle-class protein consumption, which we expect to continue.”

Monsanto (MON) CEO Hugh Grant said his firm was unable to acquire competitor Syngenta so they will move on and compete with their current assets

“Our competitive advantage leverages the know-how that we’ve assembled across our industry-leading capabilities in breeding, biotechnology, digital ag, next-generation biologicals and crop protection solutions. The proposed combination with Syngenta would have been complementary to our vision, but now we move confidently forward with our leading position in seeds and digital agriculture to pursue other options to build on our existing crop protection portfolio and in our partnerships.”

Monsanto (MON) COO Bret Begemann says the firm maintains a market share and technological lead over competitors  

“Regarding share, we held or grew share in every major market in 2015 and are seeing significant momentum with our license base in both the U.S. and Brazil.  We expect to repeat this share performance in 2016 and the early read on the U.S. branded corn yield data suggests that we have held or expanded our yield advantage for the 10th consecutive year.”

Monsanto (MON) COO Bret Begemann says the company wants to focus on the growing digital opportunity within agriculture

As we look at the next decade for digital agriculture, one thing is clear. This platform will change the way farmers manage their operation; it will change who we are as a company; and it will transform the industry. In fact, we are targeting expansion of the platform into new crops in the next three to five years, including, but not limited to, soybeans, wheat and canola. “    

Monsanto (MON) CFO Pierre Cordoroux said the company has increased its debt substantially to buyback its own stock 

With the successful completion of our $6 billion accelerated share buyback program, we’ve repurchased more than 10% of our share outstanding since June of 2014.  Our share count now stands at 468 million shares and our net debt to ongoing EBITA ratio sits at 1.1 at the close of the fiscal year.”

Monsanto (MON) CEO Hugh Grant says consolidation in the industry is inevitable

 We continue to see duplication in R&D in the sector. We continue to see the low effectiveness of R&D with some of our competitors and we continue to think that consolidation in this space is inevitable. So we are going to focus on the near term. We are going to drive the near-term performance of our business, but we are going to keep a weather eye on the horizon and we are going to keep our ears close to the ground because of the market realities.”

 


 

Goldman Sachs (GS) Chief Information Officer Marty Chavez says the firm is leveraging software to automate previously time intensive manual processes

“There are 160 steps and processes a company must do from the time leadership decides they want to do an IPO to the time the company starts trading on an exchange.  We are working on automating that entire process and making it more efficient with software.”
Goldman Sachs (GS) Chief Information Officer Marty Chavez said even though the company only has 35,000 employees, they hope to be able to transact with a larger base of customers by leveraging open architecture software
“We are greatly increasing the surface area of Goldman Sachs with API’s and software.  We will allow more people to transact with us.”

Monsanto FY 3Q15 Earnings Call Notes

Challenges facing the world’s food supply continue to evolve

“The challenges facing the world’s food supply continue to evolve. The growing population along with our volatile and changing climate place ever increasing burdens on global food production”

That’s why we want to own Syngenta

“Combining the strengths of Monsanto and Syngenta would accelerate the development of new innovations, increase our scale and reach and provide a broader spectrum of products for growers around the world and it would use data science to offer a more insightful, precise approach to agriculture.”

Today we reach 400 of 3.5B acres of arable land

“Today, our foundation and our core crops reaches 400 million of the world’s 3.5 billion acres of arable land.”

It’s been a tough year but our relationship with farmers is great

“There is no doubt it has been a tough year with the macro pressures facing global agriculture, namely our retreat and corn acres, currency and pressured commodity prices. That said, I’ve not seen our relationships with our farmer customers, our portfolio, our position in the market or our pipeline stronger than I see them right now.”

US corn acres will be 88-89m

“With the line of sight from our third quarter, where we’ve seen a good uptick in the U.S. end season ordering, we now believe corn acres will be in the of 88 million to 89 million acres.”

Soybean acres 85m

“with the additional clarity we have from the spring planting progress, we expect U.S. soybean acres closer to 85 million versus earlier estimates of 87 million acres and the combination of shipments in our order book continues to indicate our share is growing with farmers continuing to choose Roundup Ready 2 Yield as the product of choice across our branded and licensed footprint.”

Climate pro on 45% of corn and soybean acres in the US

“To date, we’ve enrolled more than 75 million acres on the Climate Platform, which is roughly 45% of the total planted corn and soybean acres in the U.S. and with the current usage trends from those who use the platform weekly, we are tracking nicely towards our active used target of 45 million acres.’

Shrunk the share count by 55m shares since last year

“we successfully completed our 6 billion accelerated share buyback program this quarter and our share count now stands at 469 million shares outstanding, a reduction of more than 55 million shares since we initiated our new capital allocation strategy just a year ago.’

We can’t get syngenta to talk to us

“call me traditional, but I always think that business gets done when people meet, when they sit down across the table and try and work out a solution and we’ve been singularly unsuccessful in getting Syngenta to sit down and talk. We’ve seen the videos where they talk to themselves, but I’d love to be able to engage in a conversation.”

Climate Pro helps farmers analyze data

“If you look at the early days of the Climate Pro, which were the paid acres this year, I’d say it was driven by the nitrogen model which gave farmers, lots of insights particularly in some areas this year that were kindly difficult with the early planning season and lots of rain et cetera in some areas so that played very well.”

“And then the shift which was just as exciting as how much interest there was in the Field Health Advisor this year which was the other big app that we had available on that paid system this year and that one really gets that worked. He was describing as thinking about field help in the field help and farmers make the decisions in raising the crop through the rest of the year and its really impressive to see the interest from farmers that it confirms again the farmer’s understand intuitively. They have this variability in the field and they believe that it can be addressed and they’re willing to work with us to figure out how to do that”

JS Conference Call Notes MON, IHS, ACN

Jeremy S., an investment analyst in Southern California, has started to contribute to Avondale’s company notes database. Below are quotes from some of the calls that Jeremy has read this week.

 

 

Monsanto (MON) CEO Hugh Grant says merging their business with competitor Syngenta would create the world’s largest agricultural seeds company and gain significant synergies

“This would give us an even more precise approach to every acre creating immediate and long-term revenue growth opportunities through a diverse range of optimized, integrated solutions. Near term by combining Syngenta’s leading crop protection portfolio with Monsanto’s leading seeds footprint we would have the unique ability to provide leading science based recommendations of integrated seeds, traits, and crop protection solutions.  This combination would also allow us to more fully participate in the value creation from our crop protection solution recommendations. “

He added that big data will play an increasing role in precision agriculture in the coming years

“Longer term and unique to Monsanto, we will be able to unlock a new data driven approach to provide farmers even more valuable real time insights about their crops with our Climate platform. The information will provide actionable crop protection recommendations to farmers to maximize productivity, while ensuring inputs are applied in a precise manner to meet society’s broad goal to preserve and protect our environment.”

Monsanto (MON) CEO Hugh Grant said he expects to double ongoing earnings per share by 2019.  This type of pledge has the potential to be dangerous as it can cause perverse incentives by the salesforce to channel stuff or it can force senior management to stick to their publically stated strategy as opposed to adapting to shifting market dynamics

“Optimized spending and the milestones that we delivered this year reinforce our confidence in our five-year plan to more than double our fiscal year 2014 ongoing earnings per share by 2019. While we believe the combination with Syngenta as optimal to several customers for the long-term and would drive even greater growth in long-term earnings per share, our current portfolio and our pipeline leads the industry and provides multiple levers to drive our long-term growth projections.”

Monsanto (MON) COO Brett Begemann said the agricultural sector remains challenged

“There is no doubt it has been a tough year with the macro pressures facing global agriculture, namely our retreat and corn acres, currency and pressured commodity prices.  We fully expect the macro environment to recover and are well positioned to participate when it does.  That said, as we develop our operational plans for next year, we are taking a clear eyed view and we expect that many of these headwinds will continue into fiscal year 2016.”

 

 

 

IHS CEO Jerre Stead said the energy market they sell their software into saw softening demand during the quarter due to the recent downturn

“In terms of our core industries and horizontal workflows , resources which includes our energy and chemicals team, continues to experience moderating subscription growth due to industry dynamics.”

And he elaborated that there is plenty of room for improvement in streamlining the company’s operations

“It’s clear that we’ve got too many cooks in the kitchen.  There is not clear simple lines of accountability or simple way to think about it is I want to be able to go to one person and get the answer everything of we need to do and will do on a global basis on the products in each of those industrial areas”

IHS CEO Jerre Stead is taking steps to reduce share dilution of the company due to employee stock option plans

In addition to improving shareholder return from planned stock buybacks, we’re also planning to reduce dilution from shares granted in our stock based compensation program. We’ve made good progress in reducing our stock based compensation expense over the last year and half. We remain committed to continuing this effort and will work to reduce our 2017 annual share purchase by approximately half of our current year level.  Due to the accounting treatment of stock based compensation expense, which would cost the expense of the underlying share grants to be recognized over the vesting period, we expect annual declines in expense over the coming years in the high single digits.”

He wants the company to remain financially disciplined on acquisitions

“I don’t want us to get fooled like I’m watching some other companies today with cheap money buying something that’s accretive because the money is cheap, that wouldn’t be long term.”

 

 

 

Accenture (ACN) CFO David Rowland said the company remains a preferred customer for some of the world’s largest corporations 

“We had 12 clients with bookings in excess of $100 million, given us 33 year-to-date, which signifies the unique and trusted relationship that we have with many of the largest companies in the world.”

And the firm saw continued strength in their technology and healthcare digital practices

“Turning to the operating groups, Communications, Media and Technology continued to lead all operating groups was 17% growth in the quarter. While growth continued to be broad-based, it was most significant in North America.  The drivers across CMT continued to be digital-related services, cost rationalization, several large transformational projects and demand for network-related services.  Clients continue to be focused on digital-related services and operational effectiveness as they position themselves to be more competitive in the marketplace.”

One area of their business that has been growing substantially over the last few years is building mobile apps for corporate clients

“With Accenture Mobility, it is now one of the world’s leading developers of mobile apps, leveraging the capabilities of our global delivery center. We have now developed over 1000 apps across nearly all industries.”

Monsanto FY 2Q15 Earnings Call Notes

Tough environment for ag players

“As we look across the current landscape, we clearly acknowledge the reality facing the global players in the ag industry, namely declining corn acres and rapidly weakening foreign currencies. These industry-wide economic challenges have led us to point to the lower end of our earnings per share and cash flow guidance, and yet even at the low end of our original guidance range, we still expect double-digit ongoing earnings per share growth”

Oversupply of corn because of good growing conditions

“Two years of spectacular growing conditions have translated into the current oversupply situation for corn, and in response acres continue to decline while demand from feed accelerates to rebalance supply.’

Soybeans are 200 m acre opportunity

“Bollgard II XtendFlex cotton is now sold out from our limited commercial introduction, and plans for more than a 3 million acre launch in Roundup Ready 2 Xtend soybeans in 2016 are on pace for this nearly 200 million acre opportunity.’

Demand for corn and soybeans growing

“we continue to see annual demand for corn increasing by more than 500 million bushels per year, while soybean demand grows by more than 200 million bushels per year.’

11-12m acres of corn have come out of production

“we now estimate that at least 11 to 12 million acres of corn will have come out of production in the primary markets since 2013.”

Getting excited about Southeast Asia

“We’ve done extremely well in South Africa. We continue to do really well with those products. I have to tell you, I’m getting more excited about Southeast Asia. We got the approval for our biotech products in Vietnam in corn most recently. We’ll get to get those in the field with farmers. We’re hearing really good conversations from some of the other countries in Southeast Asia.”

Excited about Intacta performance

“I’m real excited about the Intacta performance. It’s really knocked it out of the park when you have two years back-to-back of four bushel yield advantage and you see the kind of insect performance we’re getting out of the product.”

Monsanto FY 4Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

The industry will face a more challenging environment next year

“This year, the industry will certainly face the headwinds of a more challenging agricultural environment.”

We have to become more efficient in the way we produce agriculture

“Global grain demand is expected to grow every year through the end of the decade. The reality is with grain stocks replenished from this year’s harvest, we’re in a better position to meet normalized demand; and there are already the first signs of increased use across exports, ethanol, and animal feed. And given availability, costs in the environmental footprint, I think new acres isn’t likely to be the long-term answer to this demand.

So, the world needs to increase the rate of gain seen in the last five years by around 2x in corn and by 5x in soybeans just to meet baseline demand. That means yield and innovation are going to matter more than ever, and that’s who we are. At company level, we’ve more clear catalysts and more levers across our business than we’ve ever had before.”

Farmers are focused on harvest right now not ordering for next year yet

“This time Vincent as I mention the farmers are totally focused on getting harvest, I don’t see anything. It doesn’t say it’s going to be a pretty challenging harvest for our customers this year. The weather continues to be wet, there is a lot of rain forecasted again for later this week and it’s going to be difficult for them to get it out, that’s going to be their primary focus. So I would expect the things will continue to be slow as we go through the ordering season with their primary focus being on getting the crop out of field.”

Outlook for next year’s corn

“our assumptions are on acres, who knows we’re sitting here in the fall and we don’t have the crop harvested yet but our plan and our operating assumptions are that acres will be about flat with last year. So in the U.S. we said all the way through last year we would be happy if the crop had 9 on front if there is 90 something it looks as if it probably had an 8 in front of it. And as we go into next year plus or minus I think acres will be about the same. The Latin American markets are still playing out in front of us but there is no doubt that acres are going to be down the question is how much. And a lot of that is just them watching U.S. harvest.”

Monstanto 2Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings.

More than just a seeds company

“just as we led the seeds revolution, we are driving the industry to expand the view on how we deliver yields and productivity to our grower customers.”

Expecting to double EPS over the next five years

“we are willing to back our confidence and long-term growth with a new target to at least double our ongoing EPS over the next five years.’

10-12m acres of soybeans

“while it’s early, we are very comfortable being able to target 10 million to 12 million acres in the upcoming season. That’s our biggest second year step up in soybeans.”

100m acre opportunity

“The majority of this next year’s expected step up will be in Brazil, but we will also begin commercial launch across Argentina, Paraguay and Uruguay passing another key strategic milestone in this 100 million acre opportunity.”

1B acre runway, $20 B opportunity for precision ag

“This year is a pivot point. We have some important proof points this year that increase our confidence in the ramp up to what we see as a 1 billion acre runway and a $20 billion market opportunity. As farms are increasingly digitized, precision ag can become an integrating point for information, seed, equipment and other inputs.”

Corn had a good but not great year

“I think corn had a good year not a great year. Beans picked up a lot of that slack, but if you look across the Americas we saw acreage contract and I think a big piece of our numbers reflects that contraction.”

Soy beans are having a record year

“our soybean business is having an absolutely record year driven by course of new products in soybeans and the build out of Roundup Ready to Yield, but also the portfolio advantage we have is those corn acres shifted to bean acres and we picked up on that.”

Take advantage of cheap debt to buyback stock

“Given the strength of our current balance sheet and our confidence in our growth prospects, we have decided to take advantage of the favorable debt market. By the end of FY ‘15, we intend to target the net debt to EBITDA ratio of 1.5. And one of the ways we will immediately put that structure to work is through a new 10 billion share buyback authorization, which includes our intent to use 6 billion in the near-term through an accelerated buyback program.”

seeds and traits business to drive growth

“Roundup is a great product, it’s a great cash generator, but for more than 2019 looking back it’s going to be our seeds and traits business that really drives that growth is the integration of the Climate Corp platform and how we integrate those two pieces together and that’s really going to be the central, that’s the central core of our growth story at Monsanto going forward.”

No new acres 20 years from now

“if you look forward than the next 20 years, there are no new acres. With one or two exceptions, there are no new acres and then sustainable intensification yield becomes more and more important. And the way you unlock that on a sustainable basis is providing better advice to the grower that allows him or her to get more bushels on that same footprint.”

Monsanto at BMO Conference Notes

A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

900m bushels of corn demand increase driven by ethanol/emerging middle class

“over the past 10 years, we’ve seen about 900 million bushels a year of corn demand increase and that’s a — a lot of that’s been driven by in the U.S. and about the ethanol but it’s also about the continued expansion of population in the middle class where people are going to upgrading their diet.”

Most of that was met by bringing new acres in

“The interesting thing about this, 900 million bushels a year, the majority of that demand, about 70% of it was met by bringing new acres into production.”

Going forward have to increase the productivity of acreage

“he challenge for this next increment of productivity is, is that we’re not to be able to bring significant amount of new acres into production. It’s going to have to come from productivity on the acres that we have or a shift in acres from other crops into corn.”

Have to increase productivity by 2%, that’s not happened before

” We have around, globally around 300 million acres of productive corn acres globally and in order to meet this 500 to 600 million bushel a year increase in demand. We would have to increase productivity on those acres by 2% a year. So we’ve never done that before. That’s never happened”

Need more environmentally efficient productivity too

“Ag already uses 70% of the freshwater consumed on earth, so we will see not only there is need for increased productivity, increased productivity per acre but a sustainable increased productivity per acre as we go forward just to meet this demand curve in corn and you will see and it’s similar in soybeans as well. ”

A challenging environment so far

“let me give you a read on where we are this season, this year and kind of a mid season checkpoint. Again this has been one of the most challenging Ag environments we’ve had, with significant headwinds around acres, around currency, commodity price, political unrest”

Northern hemisphere running at about the 5 year average for acres planted, dakotas are running behind though

“in the northern hemisphere while corn planting if you look, is about at the five year average. If you look specifically into the Dakota so the northern corn belt where there’s about 8 million acres of corn in North and South Dakota and where we have very-very high share, they’re about 10% planted and well behind the average, so we’re looking at whether or not we’ll see potential acre shifts between corn and soybeans in that region but clearly an area that we’re keeping focused on and most of that’s going to play out over the next couple of weeks as planting will continue through the first insurance day which will be May 25th so North and South Dakota there’s some weather impacts and we’re monitoring.”

A little softness in Brazil

“we are seeing a little bit of softness, more softness than we originally expected in the safrinha acres in Brazil and Paraguay.”

Tight credit is a headwind in otherwise growing Ukraine

“political uncertainty in the Ukraine, our Corn business in the Ukraine is growing very-very well. It is our fastest-growing business and will continue to grow this year, but the political uncertainty there has taken some of the top-end off of that, as we see some softness and some uncertainty, mostly driven by smaller growers and credit risk, and tightening of credit in the region”

Bring growers information solutions to monitor productivity

“growers are demanding, information solutions, they’re looking for companies who can come together and provide integrative solutions that can help them manage variability on their farm and make better decisions. A grower typically makes about 40 decisions a year on their farm and typically these are reactive decisions, they go out, they walk on their field, they say oh I have a problem, I have a bug problem, I have a disease problem, I have a fertilizer problem, fertility problem and then they go ahead and act and by that time you’ve already lost some of the yield and that’s why we see variability in yield, year-over-year.

We’re going to — what we’ll be able to do and we are going to with our precision Ag offering around climate is really go ahead and help these growers make proactive decisions to be able to predict what’s happening in the field and make proactive decisions that can drive productivity.”