Bayer CropScience Seeds & Traits Sales 2017
Seeds & Traits Regional Sales
Reporting currency: €
Europe, Africa & Middle East
Seeds sales grew strongly by 8.7% in Q2 and by 11.7% in H1 2017. Q2 changes were from volumes 7%, price 0.7%, currency 1%. EAME region seed sales grew by 8.5% in Q2, largely from spring oilseeds and vegetable seeds, while sales in H1 2017 grew by 11.2%. The outlook for H2 2017 is quite good as farmers are expected to plant more cereals and oilseeds in fall for the winter crop.
North American region seed sales drove growth by 22.3% in Q2 and by 27.2% for the H1 2017 period with high demand for canola seeds in Canada, soybean and vegetable seeds in USA and Canada; although there was some growth in Q2, these were offset by weak demand for cotton seeds where Bayer is normally strong. The main reason being the clean sweep by Monsanto’s introduction of dicamba-tolerant varieties and Dow’s 2,4-D tolerant varieties.
Latin American region seed sales declined by 11% in Q2 and H1 2017. The decline was largely because of Bayer’s weakness in the safrinha corn seeds market and low off-take of vegetable seeds.
Asia-Pacific region seed sales were higher by 4% in Q2 and by 2.1% in H1 2017. Sales were derived mainly from rice and vegetables seeds.
The Seeds and Traits business will likely undergo major divestments as Bayer pursues the acquisition/merger with Monsanto, which would require one of them to divest part of the cotton seeds business to another company. Bayer has also announced that it would offer the LibertyLink™ glufosinate-tolerant traits along with canola seeds in the region. The merged company would also have to offload some of their vegetable seed businesses to comply with antitrust regulators requirements, since both parties have large businesses in that sector..
Seeds & Traits Product Sales
Reporting currency: €
Seeds and traits sales grew 8.7% in Q2 2017 and by 11.7% in H1 2017. Apart from seeds (germplasm) Bayer have a strong niche market for their traits starting with LibertyLink™ for canola, cotton, soybean and corn. They also provide the trait for Monsanto’s SmartStax™ and Dow’s EnlistE3™ systems. Bayer has also produced a proprietary glyphosate-tolerant trait.
Canola/ Oilseed rape sales were driven by spring-plantings largely in Canada and Europe which grew 8.8% in Q2 and 18.6% over the 1st half of 2017.
Cotton seeds sales grew 20.4% in Q2 as planting of upland cotton grew sharply in USA, after a weak start in Q1 which resulted in a decline of 3.7% in H1 2017.This prime cotton seed (Stoneville Pedigree™) business experienced the drop due to their not being able to offer the new (old) technology from Monsanto and Dow AgroSciences. Obviously the company is focusing more on its acquisition with the technology systems offered by competitors the seeds giant.
Soybean seeds sales increased by 11% in Q2 and by 13% for the H1 2017 period. These sales were largely in North America in areas where farmers were reluctant to try the technology offered by their competitors.
It should be noted that the above three seed groups bearing the LibertyLink™ traits will be divested as the merger approvals come through mainly in USA.
Vegetable seeds (Nunhems™) which form the second largest group, grew 5.5% in Q2 and 10.8% in H1 2017. The vegetables seeds business forms a prime segment of the BioScience business of Bayer, but may be compromised if and when the merger with Monsanto is approved in 2017.
Cereal and Rice
Cereal and rice seeds form a small part and are largely sold in Europe and Asia-Pacific. These grew by 9.2% in Q2 and by 8% in H1 2017.
The outlook is generally positive for H2 2017 as they have a strong presence in all these seed product groups. Certainly the northern hemisphere winter cereal, oilseed rape seeds markets will be larger than last year due to the current crop conditions. Rice seeds are also expected to grow in Asia for the irrigated winter crop.