The Role of Agricultural Technology in the Future of Midwest Farms: A Seed Sector View Jerry Flint Vice President, Global Initiatives and Sustainability November 27, 218 Insert Agriculture Risk Classification Division of DowDuPont 1
196 1965 197 1975 198 1985 199 1995 2 25 21 215 22 225 23 235 24 245 25 Attractive Markets With Strong Secular Trends While a rising global population puts pressure on yields Arable land per capita (ha).5.4.3.2.1. World population (bn) +2bn in 215-25 1. 8. 6. 4. 2.. Developing countries Developed countries a growing middle class drives demand for animal feed Meat consumption vs. GDP: more income = more calories 125 1 75 5 25 Argentina Brazil Mexico S Africa Russia China Philippines Thailand India EU Taiwan 5 1 15 2 25 3 35 4 45 5 55 6 65 Per Capita GDP (Th US $) US Japan Canada Australia Data Source: USDA, 4/218 Source: Food and Agriculture Organization of the United Nations (FAO), Seed Industry Synopsis, Phillips McDougall, October 218 and internal analysis. 2
Attractive Markets With Strong Secular Trends Agriculture continues to enjoy long-term secular trends across multiple crops MMT 1, 8 6 4 2 Corn 1992 1997 22 27 212 217 MMT 8 6 4 2 Wheat 1992 1997 22 27 212 217 MMT 4 3 2 1 Source: Soybean 1992 1997 22 27 212 217 MMT 2,5 2, 1,5 1, Food and Agriculture Organization of the United Nations (FAO), Seed Industry Synopsis, Phillips McDougall and internal analysis. 5 Fruit/Vegetables 1992 1997 22 27 212 217 Production Consumption 3
94-98 99-3 4-8 9-13 14-18 94-98 99-3 4-8 9-13 14-18 94-98 99-3 4-8 9-13 14-18 4 How Much Virtual Area Has Been Created by Improving Yields? 27 24 21 18 15 12 9 6 3 GLOBAL CORN (Mil HA Harvested) Actual Area "Virtual" Area 73 48 33 4 12 171 184 137 138 152 GLOBAL WHEAT (Mil HA Harvested) 35 3 25 2 15 1 5 Actual Area "Virtual" Area 72 5 4 31 15 221 213 217 22 221 GLOBAL SOYBEANS (Mil HA Harvested) 18 16 14 12 1 8 6 4 2 Actual Area "Virtual" Area 41 21 13 8 4 122 16 94 79 65 If global yields were stifled at 1992 levels, more land would have been brought into production to meet the growing global consumption. The virtual area was created by technology and put into practice by farmers to improve and protect crop productivity to meet the growing human demand on a limited resource base. Data Source: USDA and Corteva Economic Analysis
Technology enables a complete solution for farmers Broader product and service offering enabled by our R&D capabilities and robust pipeline ON THE PLANT OR FARM ON THE SEED Crop Protection Digital / Agronomy IN THE SEED Seed Applied Technology Breeding Biotech 5
Seed is a key delivery mechanism to crop improve productivity and address sustainability American Seed Trade Association Represents every sector, every crop from alfalfa to zucchini Common goal improve productivity through innovation in seed Continued innovation is critical to our future as we face challenges such as climate change, evolving pests and diseases, and a growing population 6
Farmers Face a Changing Marketplace of Consumer Demand Healthy food supply Cleaner labels Knowing the food s story Environmental sustainability Less food waste 7
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199 1992 1994 1996 1998 2 22 24 26 28 21 212 214 216 218 27 29 211 213 215 217 6 Consecutive Years of Above Trend Yields Pressures Prices Composite Yield Variability for Global Grain & Oilseeds 3.4 Yields & Commodity Prices MT/HA MT/HA Yield MT/HA Price Index 3.4 2.4 3.2 3.3 2.2 3. Yield 198-215 Trend 3.2 2. 2.8 3.1 1.8 2.6 2.4 3. 2.9 2.8 1.6 1.4 1.2 2.2 Yield 198-215 Trend Price Index Note: Global yields per hectare for an aggregate of 9 grains (corn, wheat, rice, sorghum, barley, oats, rye, millet and mixed grains) and 5 oilseeds (soybeans, rapeseed, sunflower seed, peanuts and cottonseed). The price index is a simple average rice, wheat, corn and soybean prices, 199-25 (Pre-Biofuels) =1. Gold Markers represent above trend yield years and corresponding (mostly negative) price movement.
How do we add value? Farm Business Software and Data Analytics Are Being Developed and Adopted across Farms of all Size Efficiency Get more done with less Profitability Make better decisions Sustainability Build better networks, succession plans, and long term resource management 1
How do we add value? Knowing makes a difference $22/ac $2/ac $25/ac How can I save more time and become more efficient? save more time and become How can I track my inventory in real time? What is my marketing plan? What is my cost of production, down to the field? Can I get more value out of all this data? 11
Summary and Conclusions Innovation is required to stay on trend yields across the major food crops Consumer preferences create higher value segments for short periods of time Marketing at the farm level is critical as we move through this cycle Long term outlook remains positive 12