Aaron Hager, a University of Illinois weed scientist, reported last month that Illinois had several locations where waterhemp had developed resistance to glufosinate, a commonly used herbicide in North America.

Other states in the region have the same problem.

Why it matters: When and wherever they arrive on the Prairies, weeds with Group 10 herbicide resistance will further limit growers’ control options, especially against weeds already resistant to multiple other herbicide groups.

“Four states in the U.S. (including Illinois) are all going to come out (soon) with glufosinate-resistant waterhemp,” said Joe Ikley, a weed scientist at North Dakota State University.

Ikley made the comment Jan. 7 at St. Jean Farm Days, a farmer conference at St. Jean Baptiste in southern Manitoba’s Red River Valley.

The news from the U.S. Midwest is concerning because farmers are running out of options to control waterhemp, a member of the pigweed family. It has already developed resistance to seven different modes of action.

For farmers on the northern Great Plains, it’s a matter of time before waterhemp with resistance to glufosinate is confirmed, Ikley said.

“If it can evolve resistant to a herbicide in Illinois, there’s no reason it can’t do it in North Dakota or the Canadian Prairies.”

Waterhemp was first discovered in Manitoba in 2017, and it’s now present in a wide geography within the province.

It hasn’t been confirmed in Saskatchewan, but weed experts are asking farmers and agronomists to maintain a close watch for the troublesome weed.

While waterhemp is an extremely difficult weed, a bigger risk to western Canadian farmers would be glufosinate-resistant kochia.

Repeated doses

On the market in Canada since 1993, glufosinate ammonium today is the only member of Group 10, nitrogen metabolism inhibitors.

It’s sold on the Prairies mainly by BASF under the brand name Liberty, though several generic versions have come to market since the chemical’s patent expired.

In North Dakota, farmers apply glufosinate to 10 million acres of land every year, Ikley said.

So, kochia plants are receiving repeated doses of glufosinate, and resistance is on the horizon.

More North Dakota farmers are reporting escapes, where the herbicide fails to kill a kochia plant. If glufosinate is applied to 100 kochia plants in field and 95 die, the remaining five plants are “escapes.”

“We see escapes almost every year,” Ikley said.

“Can we prove those ones to be resistant, yet? It’s just a matter of time … until we get a population that is indeed resistant.”

It’s impossible to predict when glufosinate-resistant kochia will arrive in North Dakota or the Prairies.

But Ikley is particularly worried about canola growers, who rely on glufosinate to keep weeds in check.

InVigor hybrids dominate the canola acres in Western Canada, which are genetically modified to have tolerance to glufosinate.

“The issue, when I look at kochia and canola right now, is that the options are glyphosate or glufosinate,” Ikley said.

“And we (already) have widespread glyphosate resistance (in kochia).”

At St. Jean Farm Days, an agronomist delivered a blunt assessment of the risk.

If glufosinate-resistant kochia appears on the Prairies, farmers are “hooped.”

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The crop protection arm of the German chemical company said Wednesday it wants to move the Canadian head office “closer to customers” after closing its deals last year to buy a “range of businesses and assets” in the sector from Bayer CropScience.

The move is to include “reorganization of several roles” within the head office, the company said.

“The strategic decision to move our headquarters west will amplify our ability to walk alongside Canadian farmers as they look to deliver sustainable agricultural solutions both today and, in the future,” Jonathan Sweat, BASF Ag Solutions’ vice-president for business management in Canada, said in a release.

That said, the company will “maintain its presence” in both Western and Eastern Canada.

BASF’s canola, cereals and pulse business will operate out of the new headquarters in Calgary, while its corn, soy, horticulture, and specialty products portfolio “will continue to be run from the east.”

BASF Ag Solutions’ leadership team will also “continue to span the country” with “key roles” in Calgary and Mississauga as well as in Regina, Saskatoon and Winnipeg.

In the wake of its takeover last year of U.S. seed and ag chem firm Monsanto, Bayer sold off several major assets to BASF including its traits and breeding for soybeans, cotton and canola.

Significantly for the Canadian market, that included the Liberty (glufosinate ammonium) herbicide business and LibertyLink and InVigor traits, a seed processing facility in Lethbridge, chemical formulation and distribution facilities in Regina and a seed breeding centre in Saskatoon. Those deals alone saw about 300 Bayer employees working in commercial R+D, breeding and production in Canada transfer to BASF.

BASF also bought Bayer’s Poncho, ILeVO, VOTiVO and COPeO seed treatments, its Nunhems global vegetable seeds business, its research and development platform for hybrid wheat, its canola-quality juncea research and its Xarvio digital farming platform.

BASF also reached a deal earlier this year to sell its Clearfield herbicide-tolerant canola system and imazamox/imazapyr herbicides to DowDuPont’s Corteva Agriscience.

Canada’s Competition Bureau had ordered BASF to find a buyer for the Clearfield business, as a condition of its approval for BASF to pick up the LibertyLink system. — Glacier FarmMedia Network

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Corteva, the merged seed and chemical business of Dow and DuPont, announced Wednesday it has closed a deal to buy the Clearfield system, including its herbicide-tolerant canola trait and related imidazolinone herbicide chemistry, for an undisclosed sum.

German chemical giant BASF had been seeking a buyer since June 2018 for the Clearfield business, as a condition for Canadian regulatory approval of BASF’s separate deal for Bayer CropScience’s LibertyLink system.

“This bolt-on acquisition strengthens Corteva Agriscience’s already established position in Clearfield canola seeds and traits and positions us well to deliver a holistic trait and herbicide solution to growers,” Rajan Gajaria, Corteva’s executive vice-president of business platforms, said in a release.

Corteva had previously licensed the Clearfield trait for use in both its Pioneer and Brevant (formerly Nexera) seed brands. The company said Wednesday this deal will allow it to expand its position to include outlicensing of the Clearfield trait to other seed companies in both Canada and the U.S.

The deal also gives Corteva the Clearfield system’s imazamox/imazapyr herbicides, which BASF has sold under the brand name Ares, and its imazamox herbicides sold under the Tensile brand in Canada.

Thus, Corteva said, it gets “the full canola system to offer to its customers and potential licensee partners in these important markets.”

Unlike the LibertyLink system, which now goes to BASF, and the Roundup Ready herbicide-tolerant traits now owned by Bayer, Clearfield canolas are considered non-GMO.

However, Clearfield is known to command only a fraction of the herbicide-tolerant canola seed market share held by the other two systems.

As BASF said Wednesday in a separate statement, its divestment of the Clearfield system is in response to the consent agreement it entered “to eliminate any potential concerns of the Canadian Competition Bureau” regarding BASF’s LibertyLink deal last summer.

BASF’s deal for LibertyLink business — which itself stemmed from Bayer’s takeover of Monsanto in early June — “would have substantially lessened or prevented competition in the supply of canola seeds and traits by reducing rivalry between the LibertyLink and Clearfield trait systems,” the Competition Bureau said at the time.

Farmers, the bureau said last summer, would likely see the “loss in rivalry” translate to higher canola seed prices, higher canola herbicide prices and “increased payments related to the use of Clearfield intellectual property.”

The bureau had said it was also concerned BASF’s acquisition of LibertyLink would have “blunted” seed companies’ incentive to keep investing in breeding Clearfield canolas, resulting in “a loss of choice for growers.”

The bureau’s agreement with BASF was “necessary to protect competition and innovation in this important industry following Bayer’s recent acquisition of Monsanto,” interim commissioner of competition Matthew Boswell said at the time in a release. — Glacier FarmMedia Network

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The Competition Bureau said Wednesday it has an agreement with Bayer to deal with “concerns that the proposed transaction would have significantly harmed competition and innovation in Canada’s agricultural sector.”

Germany’s Bayer has been collecting regulatory approvals worldwide for its takeover of U.S. peer Monsanto, an all-cash deal it first proposed in September 2016.

Several of those approvals, including the blessing obtained Tuesday from the U.S. Department of Justice’s (DOJ) antitrust division, have arrived in recent weeks ahead of a June 14 deadline, after which Monsanto could pull out of the deal or seek a higher price than Bayer’s US$128 per share offer if it wishes.

The bureau said Wednesday its review has concluded the proposed deal would “likely substantially lessen and prevent competition in Canada” in the supply of canola seeds and traits, soybean seeds and traits, carrot seeds, and certain seed treatments used to protect crops against nematodes.

To that end, the bureau’s agreement calls for the sale of a list of assets that Bayer has largely already agreed to sell to German seed and chemical peer BASF, to meet other regulators’ conditions.

Those include Bayer’s canola seed and traits business, soybean seed and traits business, carrot seed business, nematode seed treatment business, glufosinate ammonium (a.k.a. Liberty) herbicide business, LibertyLink herbicide tolerance technology and digital farming business in Canada.

The bureau’s agreement also calls for Bayer to shed assets related to its Centurion herbicide, a clethodim (Group 1) post-emergent product registered in Canada for control of grasses in crops such as canola, soybeans, flax, peas, chickpeas, lentils, potatoes and sunflowers, among others.

The bureau, which noted BASF has been proposed as the buyer of all those assets under the agreement, added it “is actively reviewing the suitability of BASF as the proposed buyer of these assets.”

The bureau’s more detailed position statement on its Bayer-Monsanto review is expected to be published “in the coming days,” it said.

John Pecman, Canada’s commissioner of competition, said Wednesday the bureau’s agreement with Bayer “will protect competition and innovation in Canada’s agricultural sector, and is the result of a collaborative approach with the parties and our international counterparts” such as the European Commission and the DOJ.

‘Stuck’

Some organizations scoffed at the bureau’s announcement, among them the National Farmers Union, whose vice-president Jan Slomp said Thursday it’s “foolish to believe that genuine competition between four global agribusiness companies that control over 70 per cent of the market will keep input prices down and spur innovation.”

Specifically, the NFU said, given ChemChina’s takeover of Syngenta and DowDuPont’s plans to spin off its merged seed and ag chem businesses under the name Corteva Agriscience, and Bayer’s Monsanto takeover and asset sales to BASF, four corporations are poised to control 70 per cent of global seed sales.

“Joint ventures between them are still possible, they license the use of their products to each other, and none have anything to gain by reducing the prices they charge farmers for their products,” Slomp said.

“More and more, we are getting stuck with what a handful of multinational corporations want to supply, regardless of what we need or want.”

Lucy Sharratt, representing the Canadian Biotechnology Action Network, panned the merger Thursday as leading to an “unprecedented level of corporate control over seeds and pesticides.”

Other observers have warned of a likely reduction in innovations benefitting farmers as mergers lead to staff cuts and reduced budgets.

“The Competition Bureau seems more attuned to the political environment than to protecting farmers’ interests,” Craig Hunter of the Ontario Fruit and Vegetable Growers Association told Country Guide’s Maggie Van Camp in January.

“The only thing they’ve done is to say the companies can’t merge unless they sell off sections of the company or certain products so they don’t have too much control overall.”

Hunter also warned there may be little to stop the remaining major players from limiting access to products through agricultural supply retailers.

In the same article, former ag chem executive Warren Libby of Savvy Farmer said having only four companies controlling seed for most of the world’s main crops isn’t necessarily bad or good, just a consolidation of power in a few places.

The merged companies will still have huge resources, he said, and with multiple patents and traits in a single shop, the potential for stacked traits is even stronger. Also, he said, fewer of the companies’ combined resources would be spent on duplication of effort. — AGCanada.com Network

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1. What is herbicide layering? “We’re basically talking about layering on multiple herbicide modes of action and groups in sequential application. So, mainly your pre-seed and your in-crop herbicide applications,” Jacob said.

This means spraying herbicides from different chemical groups at different times during the growing season — not mixing modes of action in a tank mix.

2. How many layers do I need?

“The Ministry recommends at least three to four herbicide groups,” Jacob said. “The more the better.”

Getting to four may be a big step for some farmers. Two is better than one, Jacobs says, “but above three would be a good target.”

3. When should I layer?

“The main thing is to get a good pre-seed herbicide product in there,” Jacob said.

“Later, the weeds that were missed will be killed by the post-emergent application.” The residual is key for getting the weed population down for your in-crop herbicide.”

For example, Jacob said, if you start with a weed population, after the pre-seed herbicide, you’ll have “five, or 10 or maybe even 20 per cent of that population there.” The weed population will be reduced before you apply in-crop herbicide.

“You’re basically reducing your chances of spraying over a resistant biotype and having some more resistance issues show up on your farm.”

4. What if I don’t have resistant weeds?

These days, you can’t be too careful. “For some weed species, assume you have it,” Jacob said. “And for some, don’t let it get there.”

Herbicide layering combats cleavers

As explained by Saskatchewan Agricultural specialist Cory Jacob at the annual Crop Diagnostic School near Indian Head, two recent studies led by University of Saskatchewan weed scientist Chris Willenborg have found that herbicide layering can help control those hard-to-kill Group 2 resistant cleavers.

In 2014-15, researchers found that following a pre-emergent herbicide application with a post-emergent herbicide from a different chemical group (with a different mode of action) was more effective than using chemicals from only one group for controlling Group 2 resistant cleavers in field peas.

In 2013-14, researchers turned to canola, and found that cleaver control in canola was also better when multiple modes of action were applied during the year. This was the case with all canola systems (Liberty Link, Roundup Ready and Clearfield).

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To be sure, several smaller companies remain in the game — but with marriages now consummated for Dow Chemical and DuPont, and for Syngenta and ChemChina, Bayer’s pending takeover of Monsanto and, now, BASF getting set to buy Bayer Crop Science assets, Canada may soon see only four big players in pesticide and seeds.

BASF’s Canadian business director, Ron Kehler, spoke to Canadian farm media Tuesday about that company’s deal to buy seed and herbicide businesses from Bayer.

Asked about competition in the seed and chemical sectors, Kehler said the increased costs of stricter environmental regulations, trait development and finding new modes of action are raising the bar as to who can be a significant player.

“The price to play, or to be in this business, continues to go up,” he said.

For 5.9 billion euros (C$8.7 billion), BASF will get Bayer’s traits and breeding for soybeans, cotton and canola, and, significantly, its Liberty (glufosinate ammonium) herbicide business and LibertyLink and InVigor traits.

The deal also gives BASF Bayer’s seed processing facility in Lethbridge, chemical formulation and distribution facilities in Regina and a seed breeding centre in Saskatoon.

Along with those existing products, BASF has purchased Bayer’s research and development pipeline — including, Kehler said, “more than 250 patent families.”

With this purchase, 1,800 Bayer employees from commercial R+D, breeding and production — of whom 300 are within scope in Canada — will transfer to BASF.

Bayer is divesting these assets in the context of its acquisition of Monsanto.

Kehler described Bayer’s development of LiberyLink technology as “an amazing business story,” currently growing by about 14 per cent per year.

BASF’s purchase of Bayer’s LibertyLink canola, soybean and cotton portolio, he said, will be “highly complementary” to BASF’s existing product portfolio. Many of the large agricultural chemical companies are also now in the seed business.

New to the seed business, BASF plans to use the newly-acquired LibertyLink varieties to “deliver more tools to support growers,” Kehler said.

Having a wider range of products to offer will give BASF staff more opportunities to connect with customers over the course of the crop year, and “partner with farmers in new ways.”

Although the purchase of Liberty, a Group 10 herbicide, will also be a valuable asset for BASF, “we want to offer new solutions for herbicide-resistant management by using glufosinate ammonium as an attractive mixing partner,” Kehler said.

Rotating chemical groups and using tank mixes as part of an integrated weed management program can help to slow the development of herbicide resistance in weeds.

BASF will also continue to build on the seed trait development it’s done in the past.

“We’re now able to fund more work in traits and continue to do the work that we’re doing on herbicide development, which is an area of key important to our research,” Kehler said.

Until the deal closes, Kehler said it will be “business as usual” for farmers dealing with BASF or Bayer.

The sale is conditional on Bayer closing its deal to buy Monsanto, which the German company has said it hopes to do early next year.

— Leeann Minogue is editor of Grainews at Griffin, Sask. Includes files from Maggie Van Camp of Country Guide at Blackstock, Ont.

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BASF, the world’s third-largest maker of crop chemicals, has so far avoided seed assets and instead pursued research into plant characteristics such as drought tolerance, which it sells or licenses out to seed developers.

But Bayer’s $66 billion deal to buy U.S. seeds group Monsanto, announced in September 2016, has created opportunities for rivals to snatch up assets that need to be sold to satisfy competition authorities (all figures US$ except where noted).

Bayer said it would use the proceeds to partly refinance the Monsanto acquisition. It plans to raise $19 billion toward the deal by issuing convertible bonds and new shares, and has lined up as much as $57 billion of bridge financing from banks.

Baader Helvea analyst Markus Mayer said a higher-than-expected valuation of the assets up for sale could mean Bayer now needs to raise less than $10 billion from the sale of new shares, which would be a positive surprise.

Bayer had offered to sell assets worth around $2.5 billion. The European Commission said in August that the divestments offered by Bayer so far did not go far enough and started an in-depth investigation of the deal.

Bayer has to sell its LibertyLink-branded seeds and Liberty herbicide businesses, which generated 2016 sales of 1.3 billion euros, because they compete with Monsanto’s Roundup herbicide and Roundup Ready seeds.

The deal also includes Bayer’s InVigor-branded seed lines, which use the LibertyLink trait technology.

LibertyLink seeds, used by soy, cotton and canola growers, are one alternative to Roundup Ready seeds for farmers suffering from weeds that have developed resistance to the Roundup herbicide, also known as glyphosate.

The spread of Roundup-resistant weeds in North America has been a major driver behind Liberty sales.

“BASF’s decision to acquire seeds assets represents something of a change to its prior view on its needs to respond to recent industry consolidation in agriculture,” Morgan Stanley analysts said.

“Nonetheless, the proposed assets for acquisition are high margin and high growth and represent a sensible bolt-on addition,” they added.

BASF CEO Kurt Bock told a conference call he would look at further acquisition opportunities in the seeds sector as well but said it would take “two to tango.”

The group is also expected to look at other assets — such as vegetable seeds — that Bayer may be forced to divest, a person close to the matter said.

Positive surprise

The sale to BASF values Bayer’s assets at around 15 times 2016 operating profit (EBITDA) of 385 million euros, which analysts said was reasonable compared with multiples of 19.3 for ChemChina’s takeover of Syngenta and more than 20 for Dow’s tie-up with DuPont.

BASF will finance the acquisition through a combination of cash on hand, commercial paper and bonds.

It is expected to reap sales synergies in the hundreds of millions of euros. On the cost side, however, savings will be slim at first as there is little overlap with BASF’s existing business and the group has promised to keep all permanent staff at the businesses it is buying for at least three years.

The acquisition will add to its earnings by 2020, it said.

The deal is conditional upon Bayer’s acquisition of Monsanto going through. While the European Commission could block that transaction, it has approved others, such as the Dow-DuPont deal and ChemChina’s takeover of Syngenta — although only after securing big concessions.

Bayer said it continued to work with the authorities to close the Monsanto purchase by early 2018.

As part of the asset sale to BASF, more than 1,800 staff, primarily in the U.S., Germany, Brazil, Canada and Belgium, will transfer to BASF. It is also acquiring manufacturing sites for glufosinate-ammonium production and formulation, seed breeding facilities and research facilities.

In Canada, Bayer Crop Science’s overall workforce includes about 400 people at facilities including a Canadian head office in Calgary, seed processing plant in Lethbridge, formulation and distribution facilities in Regina, seed-breeding centre in Saskatoon, Eastern Canada operation centre in Guelph and regulatory office in Ottawa.

— Maria Sheahan is a senior editor for Reuters in Frankfurt; additional reporting by Arno Schuetze. Includes files from AGCanada.com Network staff.

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Bayer, which is bracing for the EU Commission to go into an in-depth antitrust assessment of the merger, said in a statement on Friday it would work closely with the authorities, reaffirming its goal to wrap up the transaction by the end of 2017.

“We can confirm receipt of the notification. The provisional deadline for the Commission to take a decision is 7 August,” an EU Commission spokeswoman said.

Bayer, whose request for U.S. approval is pending, last month pledged to make major asset sales to see the deal through, putting the Liberty herbicide and LibertyLink-branded seeds businesses on the auction block.

BASF said it was hoping for a bargain among antitrust-related selloffs and might overcome its traditional reluctance to expand into the seeds industry, while Switzerland’s Syngenta is keen to bolster its sub-scale seeds operations.

Bayer warned on Friday it would have to adjust its full-year outlook, citing high inventory levels at crop protection customers in Brazil and a weaker-than-expected consumer health business.

— Reporting for Reuters by Patricia Weiss and Foo Yun Chee; writing by Ludwig Burger.

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Sources familiar with BASF’s thinking have said that competition regulators looking at potential buyers of antitrust-related assets might favour new entrants to the seed market, such as BASF, over established players to stoke competition in a quickly consolidating market.

“There are assets that will come to market for antitrust reasons and they might come at prices that are different from those that we have seen in the past. That’s why we will look into it and see whether it makes sense for us,” deputy CEO Martin Brudermueller told a news conference at the group’s headquarters.

“Seed assets are an option, not a must,” he added.

Rival Bayer last month said it will sell its LibertyLink-branded seeds businesses, a key part of asset sales required to satisfy competition authorities looking at its US$66 billion Monsanto deal.

BASF, the world’s third-largest maker of crop chemicals, has so far avoided seed assets and has voiced skepticism that a combination of the two businesses would make sense for it.

Instead it has pursued research into plant characteristics such as drought tolerance, which it sells or licenses out to seed breeders.

Rival Syngenta, the Swiss crop protection company acquired by ChemChina, this week vowed to bulk up its seeds business and join the chase for the assets that Bayer must sell.

BASF is the only player left among the top six in a global seeds and pesticides market worth over US$100 billion that has not paired up with a major peer.

— Reporting for Reuters by Ludwig Burger and Patricia Weiss.

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Syngenta, a distant third in the global seeds market behind Monsanto and Dupont, is determined not to lose ground on its rivals as the seeds and crop-protection sector continues an unprecedented wave of mergers and acquisitions.

The Swiss group, the world’s leading crop chemicals maker, itself fought off unwanted suitor Monsanto before agreeing to be taken over by ChemChina to secure better access to Asian markets and is now targeting its own acquisitions and licensing deals.

“We are very interested in seed assets from remedies and beyond that,” CEO Erik Fyrwald told a news conference at the group’s Basel headquarters, responding to a question about assets to be sold by Bayer.

Bayer last month said it will sell its LibertyLink-branded seeds businesses, a key part of asset sales required to satisfy competition authorities looking at the US$66 billion Monsanto deal.

“The goal is to strengthen Syngenta’s leadership position in crop protection and to become an ambitious No. 3 in seeds,” the company said in a news release on Tuesday.

Seeds will be the main plank of the growth strategy to meet ChemChina’s target for Syngenta to double its revenue over the next five to 10 years, the Chinese group said on Tuesday.

ChemChina, which has acquired close to 98 per cent of Syngenta’s shares, also plans to float a minority stake in its newly acquired subsidiary on the stock market in the next five years or so to bolster its balance sheet.

“The timing of the minority IPO of Syngenta will depend on the market situation, but the time frame would be about five years,” ChemChina Chairman Ren Jianxin, now also Syngenta chairman, said at the news conference.

Ren also dismissed as “rumours” reports that ChemChina could merge with state-owned Chinese peer Sinochem.

— Reporting for Reuters by Ludwig Burger.

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