Corteva faces slow start as it takes aim at Bayer’s Brazil soy reign

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SAO PAULO, Oct 8 (Businesshala) – American pesticide and seed maker Corteva Inc (CTVA.N) will take three times as long to enter Brazil’s genetically modified soy seed market as it did in the United States, where Corteva’s sales had grown rapidly. In recent years, the company said.

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Corteva is launching new genetically modified (GMO) soy seeds in top soybean producer Brazil, where rival Bayer AG (BAYGn.DE) has enjoyed a virtual monopoly since the planting of GMOs in the early 2000s . Bayer has a vast network of sales staff and longstanding relationships with farmers, seed developers and manufacturers in Brazil, the relationship Corteva is just establishing.

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Brazil’s adoption of genetically modified crops helped it become the world’s largest seller of soy used for animal feed. But weeds and pests have become resistant to the chemicals that crops can withstand.

So Bayer and Corteva are trying to get Brazilian growers to convert their next generation of GMO seed varieties that can tolerate the new herbicide. Billions of dollars are at stake in annual sales of seeds and herbs in a vital Brazilian market.

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In addition, the seeds that Brazilian farmers choose, playing a role in the size of their crop, will affect world supplies and the prices of the commodities many countries rely on to feed their people and livestock. Soybean is already scarce and prices are at a seven-year high.

Bayer and Corteva do not produce seeds themselves in Brazil. Instead, local genetic improvement companies create new varieties for the local market to address local soil and climatic conditions – a process that can take years. Then, seed producers mass produce the seeds to sell to farmers for planting.

“The adoption of the Analyst system in Brazil will take a little longer than in the United States,” Corteva said in an e-mail to Businesshala, as Brazil has limited seed volumes.

The company had enough Enlist E3 seeds, GMO technology that debuted early in the United States, to be available to U.S. farmers in 2019 when Enlist received U.S. regulatory approval.

In 2019, Corteva captured 35% of US soy-planted area with Analyst in three years following the merger of Dow Chemical and DuPont.

In Brazil, Corteva estimated that it would take five to 10 years to reach that level.

Corteva is also launching a more expensive soybean seed called Conkesta E3 in Brazil, but Enlist is its primary focus in its campaign to win market share from Bayer.

buyer’s edge

Bayer’s long dominance in the Brazilian seed market gives it an edge as it introduces a new product in Brazil at the same time that Analyst and Concasta are entering the market. Bayer acquired seed maker Monsanto in 2016 and inherited Monsanto’s seed and chemical empire.

Monsanto launched the Intacta RR2 Pro soybean seed technology in Brazil seven years ago. In the 2020/2021 cycle, 80% of Brazilian soy was grown with Intecta.

This year Bayer is launching its Intacta2 Xtend seed line in Brazil that resists the herbicide dicamba – a chemical Bayer is betting on globally as crops become resistant to its earlier herbicide glyphosate.

Bayer said in an e-mail that more than 30 seed varieties have been developed using its Intacta2 Xtend technology for the Brazilian market. This gives it an advantage over Corteva’s Analyst, which has not yet been adapted to the Brazilian market by local genetic seed companies.

Still, at least one factor could be working in Corteva’s favor. Dikamba is the target of US lawsuits and US government review because of its tendency to damage crops from where it is sprayed and on neighboring farms.

Bayer agreed to pay up to $400 million to settle lawsuits from American landlords who said their crops were damaged by neighbors spraying dicamba.

Problems with dicamba encouraged American farmers to turn to Corteva’s Enlist products, and Brazilian farmers have closely followed the American experience with dicamba.

“I wouldn’t buy the herbicide (dicamba),” said Eduardo Godoi, a farmer in Mato Grosso, Brazil’s top soy-producing state, who will try Intacta2 Xtend for the first time.

Reporting by Ana Mano; Additional reporting by Tom Polansek in Chicago; Editing by Carolyn Stauffer and Cynthia Osterman

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