“As agricultural productivity increases, efficiency grows and, as in all mature industries, margins contract. (Cargill, for example, reported profits of just $1.6 billion on sales of $120 billion last year). With gains from technology diminishing, consolidation is one of the few area left for the ag industry to wring future growth. Just as family concerns have been snapped up to form mega farms, the crop science business is ripe for mergers.
Along with Bayer’s proposed acquisition of Monsanto, Dow and DuPont are in discussions to merge and spin out a new agricultural company and China National Chemical Corp. is attempting to buy Switzerland’s Syngenta. If the deals all proceed, it would leave 75% of the global crop market in the hands of three companies, according to Bloomberg….”