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Chemical Makers Go on the Offensive in Agriculture
NEW YORK - The only green shoots the chemical industry has seen lately are coming from the one-time diminutive agricultural side of the business, a shift that has spurred both new partnerships and legal battles to stake out new territory and protect profits.
A Dow Chemical Company plant is seen in Torrance, California, in 2008. (AFP/Getty Images/File/David Mcnew)
Chemical makers have been hard hit by the global economic downturn because the products they make go into clothes, toys, cars, and thousands of other products that consumers are not buying.
But food is one area where consumers can't cut back that much, a saving grace for an industry that relies increasingly on the sale of high-tech seeds, fertilizer and herbicides.
Operating income at Dow Chemical's agricultural unit jumped 63 percent from 2007 to 2008 when it reached $761 million. At BASF and DuPont, the jump was 37 percent to 705 million euros and 24 percent to $1.11 billion, respectively.
In 2006, DuPont's ag unit was its fourth-biggest business by operating income; in 2008 it was the second-biggest. Dow's ag unit was its third-biggest unit in 2008, up from fourth place in 2007, from when data is most recently available.
Wilmington, Del.-based DuPont wouldn't have make a profit in the second quarter without help from its agricultural business.
Dow, which also needed its agricultural unit to turn a profit in the first quarter, reports its second-quarter results next week along with BASF.
"These agricultural businesses are growing faster than anything else chemical companies do, and they're profitable," said Dahlman Rose & Co. analyst Charlie Neivert, who studies the sector extensively. "They have to continue to protect their turf, or someone's just going to walk all over them."
Anthony Michaels, an attorney specializing in environmental litigation, says companies have become even more aggressive as patents for popular products like Monsanto's Roundup expire.
In a recently filed lawsuit, St. Louis-based Monsanto claims DuPont broke a licensing agreement when it combined its genetically modified soybeans with one of Monsanto's herbicides.
And Germany-based BASF and DuPont have asked a court to invalidate the other's patents for profitable lines of herbicides.
With so much money at stake, the lawsuits have not slowed collaborations between chemical companies that are racing to develop new technology and extend profits.
BASF recently announced it created a seed that requires less water to grow than its peers, with help from Monsanto.
Midland, Mich.-based Dow, in its own joint venture with Monsanto, said earlier this week it's found a way to put several "traits" - like drought- and herbicide-resistance - into a single corn or soybean seed.
Once those products hit the market, expect them to be gobbled up by farmers from St. Agatha, Maine, to Salinas, Calif.
For the chemical industry, volatility is a constant, but in agriculture they may have found firmer footing.
"If you're going to farm a piece of land, you ought to farm it for all its worth," said Tim Hassinger, commercial vice president at Dow AgroSciences. "We think we have something to offer the future of agriculture."
8 Comments so far
Show All"'If you're going to farm a piece of land, you ought to farm it for all its worth,' said Tim Hassinger, commercial vice president at Dow AgroSciences. 'We think we have something to offer the future of agriculture.'"
Unfortunately, agribusiness doesn't understand what a piece of land is truly worth. They only understand volume, not quality. To them, a ton of greens poisoned with their products is worth more than a half-ton of healthier organics.
The do indeed have something to offer agriculture: its slow demise.
q
In other news, shit flows down hill.
In other news Leukemia is up by 5000%. Life expectancy for children is lower than their parents for the first time since records have been kept. Childhood diabetes is approaching 50%.
US food is shit since we gave custody of all seeds to chemical companies. Boycott it. Plant your own.
TJ
"All tyranny needs to gain a foothold is for people of good conscience to remain silent." - Thomas Jefferson
There is a story about a village near a river. One day, a villager saw a baby floating down the river. He ran to save the baby, only to find another floating down the river. The villagers came to help, when another and yet another baby came. Soon, all the villagers were occupied with saving the babies that were floating down river toward their village. Nobody thought to look upstream to find out where the babies where coming from, or why.
Nobody doubts healthcare in America needs reform. Medical practice inefficiencies, rising insurance costs, over priced drugs, and a lack of access to quality care for all, are the babies floating toward us. Politics exponentially adds to the problem. Meanwhile, Americans enslaved, if not crushed, by healthcare costs often fail to see the snake in this box of pain, which is a broken food industry.
While everyone wants the system fixed, nobody wants to pay for it. Everyone wants better healthcare; unfortunately, few care enough about how such a broken system affects their neighbors. Politicians fear loss of campaign funding from corporations affected by healthcare reform legislation, while attempt to make their constituents believe that they are working for the people’s best interests.
A look upstream would reveal unique funding sources for healthcare reform and a remodeling the broken food industry. Taxing processed foods, laced with corn syrup, salt, and unhealthy fats, could yield new revenue as it forces a change to healthier ingredients in the nation's diet. Concurrently, taxes on fresh fruits, vegetables, meats, dairy products and all organic products should be eliminated.
By taxing corporate farm operations, those using genetically modified seed that rely on excessive use of pesticides and herbicides, healthcare reform would be funded and healthy farming practices encouraged. This could remedy the agricultural disaster perpetrated on America’s farmers when post WWII chemical producers, seeking new markets for the war’s chemical surpluses, fathered post war farming techniques that are destroying the land and life throughout America’s heartlands.
By taxing feedlot operations, which use inhumane and unhealthy production methods for beef, pork and poultry, additional new revenue could be generated. Such meats, grown with excessive chemicals and drugs, create health issues, which drive the need for more healthcare services. This would be yet another win-win situation.
Such a remodeling of the food industry would cause America’s fast food giants, one of the unhealthiest sectors of food industry, to raise prices. Thus, choosing unhealthy foods, and creating a drain on the American healthcare system, would be a more obvious and conscious decision. It would also help curb America's addiction to sugar, salt and fat that has caused American's to be the fattest people in the world.
These actions could strike at the heart of our health and healthcare issues if Washington could just stop drowning in politics and look upstream.
the greenchick is modest and has the game pegged. This chemical co. propaganda is just that, propaganda. I am a farmer---- quite small scale, and intensive. uncertain about some of the requirements to certify "Organic"----- part of my small operation is so certifued, but I would not use any of the crap offered by the chemcos--- I would quit the business first. I have very mixed feelings about using elemental plant nutrients, They are what nature offers to plants when fungi break down the former generation, The very idea, though, of using chemistry to kill off compteitors is pure anathema. It may work, but at what price? This is not my idea of sustainability.
And all without a thought for what they're doing by adding more poisons to our earth, air, lakes, rivers, streams, and coastal waters where they poison not only us, but wildlife and fisheries.
We need to buy up all the chemical companies and turn them into suppliers of organic amendments for plants and for people. I don't see a slowdown of chemical poisoning of all life on earth otherwise.
Are these people stupid? Inhaling too much of their own poison? Killing customers by slowly poisoning our sustenance. You have to eat too, so enjoy every meal that is killing you - a'holes!