Corteva and Syngenta, two major seed and crop protection companies, reported lower overall sales for their third quarters but higher sales of seeds, as the firms navigate what one of their CEOs called “complicating geopolitical, macroeconomic and ag-specific factors.”
On an earnings call Thursday, Corteva Agriscience CEO Chuck Magro said that “overall, the agricultural markets remain constructive but mixed. Global ag fundamentals remain positive with farmer income still above historical levels.”
Magro said destocking of crop protection products, which buyers had bought during supply chain bottlenecks, “appears to be largely behind us in North America, with an uptick in orders from the channel, but we expect destocking to continue through the current season in Latin America and the upcoming season in Europe.”
“Underlying farmer demand in terms of applications is on track with historical trends,” but that “just-in-time order patterns” would probably continue, most evidently in Brazil.
Magro said biofuel demand this year is “at a record level, and we expect continued growth in 2024.” Corn and soybean production also is expected to rise next year.
Although USDA estimates for the current crop year in the U.S. “show it would be the fourth consecutive crop year of below-trend corn yields, … we’re starting to see a rebound in U.S. ending corn stocks due to an increase in planted area.”
In Europe, however, Magro said corn production “remains markedly below pre-conflict levels, particularly in the Black Sea region, where Ukraine production is down 30 percent.”
Soybean stocks excluding China “are not back to pre-pandemic levels and are dependent on critical southern hemisphere production” such as Brazil, where Magro said soybean planted area is expected to be up in 2023-24.
Corn acres in Brazil for both the summer and safrinha crops will be down, however, Magro said.
Corteva reported net sales in the quarter of $2.59 billion, down 7% from 2022’s third quarter, leading to a loss from continuing operations of $315 million. For the first nine months of the fiscal year, net sales were down 1% to $13.52 billion, with income from continuing operations at $1.17 billion.
Magro, however, touted the company’s leading position in soybeans with its Enlist platform. Corteva said in August Enlist E3 had become the top soybean technology seller to farmers, surpassing Bayer’s Xtend platform. Enlist seeds are resistant to 2,4-D choline, glyphosate and glufosinate, Xtend seeds to Roundup and dicamba.
Corteva plans to roll out 200 new hybrids and varieties in 2024, Magro said, after introducing 300 in 2022 and 2023.
Seed net sales for the third quarter were up slightly from the prior year’s quarter, from $862 million to $878 million, Year to date, seed net sales grew 7%, with prices up 14% globally.
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Net sales of crop protection products for the year to date were down 10%, from nearly $6.3 billion to about $5.7 billion, the company said.
Syngenta Group, which includes Syngenta Crop Protection, ADAMA, Syngenta Seeds and Syngenta China, reported sales of $24.3 billion for the first nine months of the fiscal year, down from $25.9 billion for the first nine months of 2022.
Seed sales increased 3% in the first nine months to $3.3 billion, “driven by robust pricing,” the company said. Crop protection sales dipped to $11.5 billion compared to 2022’s first nine months.
“Industry-wide channel destocking continued” in the first nine months of the year, “as distributors and retailers further reduced inventories they built up in response to the supply chain disruptions of 2022,” Syngenta said.
“Overall farmer income and use of agricultural products, solutions and services remain robust,” the company said. “However, high working capital costs for customers due to sustained higher interest rates prompted many channel partners and farmers to order closer to application. These factors weighed on the comparison with the same period last year, when the Group achieved record sales and profits.”
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