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Weed Resistance Takes Center Stage for Annual Meeting

Bayer CropScience outlines major capital investment plan, but first the CEO focuses on what he sees as a critical problem facing agriculture.

Published on: Sep 6, 2013

Charting a business course is critical in a competitive environment and this week Bayer Crop Science rolled out its strategy going forward during its annual press conference, held in Monheim, Germany. Navigation points for that course include tackling weed resistance, developing new biological-based platforms to complement continuing innovation in crop protection and push forward on a seeds and trait business that has expanded to include soybeans and wheat.

Liam Condon rolled out the program during the plenary session, and explored the challenges ahead for agriculture, which includes ramping up to feed 9 billion people - and more - by 2050. Theme for the meeting: Shaping the Future of Farming.

TALKING STRATEGY: Liam Condon, CEO, Bayer CropScience lays out corporate plans during the annual press conference for the business.
TALKING STRATEGY: Liam Condon, CEO, Bayer CropScience lays out corporate plans during the annual press conference for the business.

"If you walk around Europe," Condon says, "it does not feel like there are a lot more people coming to the planet." He says a visit to China or India and any of those country's rapidly growing "mega cities" would change your mind.

"This is a huge challenge for society that we're facing here," he adds.

As he outlined the challenge, which is top of mind for a lot of companies in agriculture these days, he points to the rise of the middle class and its higher need for protein. That extra protein need will stress global agriculture's ability to meet the challenge. He did acknowledge that part of the solution will be to fix a problem that plagues developing countries - insufficient storage - where in India 40% of fruits and veggies are lost each year to inadequate storage.

Key issues, Condon told media at the conference, include a reduction in land available per capita - it's fallen from about an acre per person in 1950 to about a third of an acre today. However, agriculture is challenged to push production up 70%.

He explained the five elements that guide Bayer CropScience for the future:

* A focus on innovation - "Small step changes and incremental growth will not be enough to meet the challenge," Condon says.

* Enable farmers big and small - "It's not just big farms that we will work with globally," he notes.

* Driving sustainable innovation

* Enhancing human health - "Healthy plants impact the health of human beings," he says.

* No single company can deal with the challenge alone - in this Condon explained that Bayer CropScience will be working not only with others in private industry but also with other groups including non-governmental organizations and more.

"The four pillars of our strategy include enhancing crop protection, strengthening customer centricity, leading the way in innovation and expanding our seed business," he notes.

Primary issue: Weed resistance

After outlining the challenges ahead, Condon turned his attention to a topic that might have surprised many: resistant weeds. "A huge issue today is the issue of weed management," Condon says. "Weeds kill a large amount of the harvest and it is a large problem for farmers today."

He notes it already affects 50% of growers in the United States and a dramatic animated graphic showed the rise of glyphosate-resistant weeds in the United States - though it is a global issue. "Nature always finds a way," Condon says. "No single product will do the job [of controlling weeds]. Our approach is diversity."

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This was such an important topic the company gave a little demonstration. During this portion of Condon's talk, Harry Strek, who works in marketing and support for weed control biology, walked up on stage carrying a 6-foot palmer amaranth plant. The plant had grown to that size in just three weeks in the greenhouse, though any cotton farmer in Arkansas will tell you it'll grow that big faster.

The weed resistance issue was so important that the annual event included a session focused solely on the issue in an effort to educate a broader range of journalists. And Bayer CropScience does have an alternative with its Liberty Link technology which is growing quickly in areas hard hit by glyphosate-resistant weeds.

Building capacity

Liberty Link technology is popular, as is Liberty herbicide itself, and meeting rising demand for the crop protection product is a challenge for the company. The company is investing about $3 billion for capacity expansion between 2013 and 2016 and in the United States a cornerstone of that expansion is a new factory - to the tune of about $500 million - for the production of glufosinate ammonium, the active ingredient in Liberty herbicide.

While the crop protection industry is dealing with overcapacity issues on the whole, Condon notes that Bayer CropScience is in a different position. This expansion program will allow the company to expand production of key crop protection products significantly.

Going forward

During a talk with U.S. ag journalists on hand, Condon talked candidly about the key focus areas including weed resistance, increasing use of biologicals in crop protection and its seeds and traits business. Of course, crop protection product development is an underlying foundation and Bayer CropScience also continues its discovery work there.

The weed resistance issue - met for now with Liberty herbicide - isn't going away. During the conference session on weed resistance, Hermann Stuebler, who heads up weed control research at Bayer CropScience, told journalists that after 2020, Bayer CropScience would have new modes of action available for the fight too. Not much more information came from that, but he did note that the company has filed more than 15 patents since 2012 (though not all of those were for active ingredient development).

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Condon, in his talk with U.S. journalists, turned his attention also to the rising biological business. Bayer CropScience purchased Agraquest - a California company focused on biological control of crop pests and disease - in late 2012. Condon explains that Bayer CropScience has moved quickly to bring Agraquest into the fold and start working on how its products will be marketed for the future.

For 2013, Bayer CropScience has more than 3,000 plots out for demonstration and test with Agraquest products to acquire more data about this technology. Bayer CropScience has already had solid success with use of a biologic product - Votivo for nematode control - that's paired with Poncho as a seed treatment. "We are ramping up research and development of biologicals," Condon says.

Seeds and traits ahead

Another area where Bayer CropScience is focusing its resources is in the seeds and traits business, but don't ask them about getting into the corn market. Condon and others with the company were clear that the future for Bayer CropScience for now will be soybeans, canola, wheat, rice and cotton. And for soybeans, the focus is on Southern varieties and Latin America.

The newest seed and trait area for Bayer CropScience is the focus on wheat. The company is dedicating resources to the crop and in the next decade will be working on ways to push up yield on a crop that Condon says has been left behind. This is not the only company to step up to the wheat yield challenge in the United States as more find opportunity in the business.

How that new wheat business might look remains to be seen. Condon points to hybridization to increase yield, perhaps the use of genetic modification for greater productivity. Of course, just the move to bring marker-assisted breeding to wheat in a more intense way will help identify key yield-enhancing traits.

Matthias Kramer, who is on the executive committee at Bayer CropScience and focused on strategic planning, says the "yield will be the driver" for this business. Wheat has traditionally lagged in yield enhancement but the major seed companies ramping up their businesses do aim to change that. 

How Bayer CropScience will achieve that yield increase remains to be seen. "This could change from one day to the next," Kramer says. "It may be hybridization, but that may depend on the enthusiasm for the technology."

The effort is focused on hard red winter wheat, and there are a number of technologies being brought to bear on the topic of boosting wheat yield.

For soybeans, the effort focuses on Latin America where Bayer CropScience has acquired some seed companies. Combine that with the Hornbeck acquisition two years ago, and the company is building a portfolio of germplasm that's primed for use in key areas of the Southern U.S. and Latin America.

In each of its seed and trait efforts Bayer CropScience has built for the future. Its rise in cotton country shows dedication to growing business sectors. Cotton - which started with FibreMax but grew to include Stoneville - offers growth potential. Kramer believes more acres will go to cotton in the Eastern part of the growing region as prices stabilize. He even told U.S. ag journalists that company market share in some parts of the region are already on the rise due to some success with new varieties.

Sustaining growth in a crop science company will take focus for the next decade as companies scramble to achieve the rising production goals set down by global demand. Bayer CropScience is on track to boost sales over $13 billion by 2015. Annual sales for 2013 will near $11.8 billion.