NOBODY HAS TO remind you that lower grain prices and higher crop input costs are having a serious impact on your farm income. With earnings for farmers expected to tumble by over 35% in 2016, most suppliers are also seeking new ways to slash costs.
The tightening of belts across American agriculture will likely lead to more acquisitions and mergers among suppliers. The reality of dealing with fewer suppliers may lead to increased crop production costs. Several changes have already taken place as shown below.
A possible merger of these two crop chemical giants was in the news last summer, resulting in Syngenta turning down two purchase offers from Monsanto. Such a deal would have likely required the sale of the Syngenta seed business to meet antitrust regulations.
In recent weeks, the possible sale of Syngenta seems to be back on the front burner. After a Chinese firm expressed interest in Syngenta, there’s speculation that Monsanto may make another bid.
Dow Chemical recently announced it is reviewing its available options with its farm chemical and seed units. So a sale of this part of the huge conglomerate could happen.
We’ve also heard talk in recent weeks that DuPont may be considering an exit from the farm market by selling the Pioneer Seed and DuPont Crop Protection groups. While ag makes up one-third of DuPont’s $35 billion in annual sales, recent sales in the ag group have dropped by over 30%.
Even so, DuPont…