DuPont acknowledges dent to seed sales in Brazil from the resistance of the fall armyworm to GM traits and unveils fourth successive quarter of declining agriculture sales
EXCERPT: Research in the US by Louisiana State University and North Carolina State University has highlighted the growing resistance of armyworms – actually a moth caterpillar – to some genetically modified corn seed.
DuPont seed sales dip as pest gains resistance to GM corn
agrimoney.com, 27 Jan 2015
DuPont acknowledged a dent to seed sales in Brazil from the resistance of a major insect pest to genetically modified traits as the chemicals conglomerate unveiled a fourth successive quarter of declining agriculture sales.
The US-based group, unveiling results for the October-to-December quarter in line with Wall Street expectations, said that revenues at its agricultural division fell 4.1% to $1.73bn.
The decline reflected in part a 1% drop in sales of agri-chemicals which, with a rise in sales volumes more than offset by a greater mix of lower priced products, and by currency headwinds.
However, the drop was in the main down to DuPont's seeds business, Pioneer, which saw sales drop by 7%, thanks in the main to setbacks in Brazil.
Brazilian corn seed sales were "negative impacted" by a decline in the popularity of the grain in sowings programmes, with market pricing, and a reduced need for inputs, switching growers to soybeans.
Conab, Brazil's official crop bureau, has estimated at 6.17m hectares domestic 2014-15 sowings of main crop corn, a drop of 6.6% year on year.
DuPont also said that in Brazil, "corn seed market share were lower reflecting the impact of fall armyworm resistance".
Research in the US by Louisiana State University and North Carolina State University has highlighted the growing resistance of armyworms – actually a moth caterpillar – to some genetically modified corn seed.
Lower corn sowings
DuPont added that corn seed sales looked set to remain under pressure from the switch by farmers to other crops, with sowings for Brazil's safrinha crop, currently being planted, and for the US spring seeding season "likely" to fall, "putting pressure on" Pioneer volumes in the first half of 2015.
"Our seed order book reflects this shift in acres," the group said.
DuPont forecast a 10% drop in sales, and 25% fall in earnings, at its agriculture division in the first three months of 2015, although performance would improve in the April-to-June period.
For the first six months of the year, agriculture sales will fall by a "mid-single digits" percentage, while profits will dip by 10%.
Longer-term, the group highlighted the potential for its next generation of genetically modified seed, including its Leptra product which will "bring an additional mode of control to help Brazilian farmers manage the intense pressure they face from insects, including fall armyworm".
The comments came as DuPoint unveiled agriculture profits for the October-to-December quarter up 47% at $129m, although this rise reflected largely $36m in gains from asset sales.
Group earnings rose to $649m, or $0.71 per share, in line with market expectations.
DuPont forecast group earnings of $4.00-4.20 per share for 2015, a little below the $4.46 per share that Wall Street had expected.
It also raised by $300m to at least $1.3bn a cost reduction target.