2007: An "Unprecedented" Year
A tidal wave of change swept through the seed industry.

By Henry Gantz
hgantz@meistermedia.com

More There are many adjectives to describe the happenings on June 19 of this year that knocked the seed world, and maybe even the entire cotton industry, on its behind. They would range from "this is the greatest thing to ever happen in the seed industry" to expletives that would have to be deleted.

"Unprecedented" might be one everyone could agree upon.

The 2007 season was an historic year for the cotton seed industry.

And a comparison to the Butterfly Effect would be reasonably accurate. Monsanto, the world's No. 1 transgenic traits company, flapped its wings, causing a coast-to-coast tidal wave of cotton-seed industry change.

As a look back, Monsanto's courtship of Delta and Pine Land (D&PL) had been going on since 1998, with Monsanto making an offer of $1.9 billion in 2000. At the time, Monsanto owned Stoneville Pedigreed Seed Co. - then the nation's No. 2 brand of cotton seed - and later came to doubt that, in purchasing D&PL, the deal would pass anti-trust scrutiny, given that Monsanto would own the world's two largest seed companies. Consequently, the offer was pulled. D&PL then sued Monsanto, alleging that a good-faith effort had not been made to secure that approval. Ironically, D&PL seed varieties were the carriers of more Monsanto transgenic traits than any other brand.

The decision to sell Stoneville Pedigreed Seed Co. would prevent Monsanto from having a hammerlock on cotton-seed market share.

However, Monsanto and D&PL continued to flirt, and in August of 2006, Monsanto agreed to buy D&PL in a $1.5 billion cash deal and would, upon closing, immediately divest itself of Stoneville. (At that time, Stoneville owned the NexGen varieties.) The decision to sell Stoneville - which had dropped to No. 3 in market share behind Bayer CropScience's FiberMax brand - would prevent Monsanto from having a hammerlock on cotton-seed market share.

On May 31, the Department of Justice gave preliminary approval to Monsanto's acquisition of Delta and Pine Land. Final approval came on June 19.

This spring, the drums began to beat loudly. The Department of Justice, it was believed, would soon give its approval, and the only speculation was as to who would wind up with Stoneville. The conventional wisdom, which proved to be correct, was that it would be Bayer.

Affirmative Action
So it was that on May 31, the DOJ gave its preliminary affirmative shake of the head to the deal and it was closed on June 19, but with considerable fanfare. Monsanto did, in fact, buy D&PL and sell Stoneville to Bayer, but not with the NexGen lines. Americot, in a surprise to all who were not extremely close to the deal, bought NexGen.

With Monsanto now owning D&PL, D&PL's lawsuit against Monsanto became moot and was dropped.

In another surprise, D&PL agreed to part with 43 varieties that would carry Syngenta's VipCot insecticide trait. It is unclear, at the moment, whether Syngenta will market those lines under its brand, or license them to another company. Shortly after the DOJ approval came down, Syngenta spokesperson Anne Burt told Cotton Grower Syngenta was committed to the development of VipCot-trait products and "that commitment has not been left wavering after all these actions."

But back to what we do know:

• Delta and Pine Land will operate as Monsanto's southern business unit that will include Deltapine cotton and soybean varieties, DeKalb corn seed, Asgrow soybean seed and Roundup-brand agricultural herbicides.
• Bayer now owns Stoneville, but without what were Stoneville's NexGen lines. Bayer paid $310 million for Stoneville.
• Americot now owns the NexGen lines, paying $6.8 million for them.

Where to Go for Your Favorite Variety
So if you are wondering who now markets your favorite brand of cotton seed, here goes:

• Delta and Pine Land will not change.
• Nor will FiberMax.
• Stoneville, less NexGen, will be marketed by Bayer.
• Americot also does not change.
• NexGen is now marketed by Americot.

Fairly simple, huh? And to make it even simpler at the moment, there will be no change in the Stoneville or NexGen brand names.