MON
#There's components of pricing driven by the competitive situation we talked about.
But as far as the overall germplasm mix lift, it's about flat versus last year.
We've seen farmers being, as <UNK> was mentioning, maybe more prudent, but there are still ---+ the great point that we see, as <UNK> mentioned, the year one to three, we are still seeing this 50% to 60% of our portfolio in those years, so the dynamic is still there.
Now when you look at the absolute number, when you think about the ex-currency germplasm price mix we're going to be about flat.
Yes, <UNK>, thanks.
I'd say it's the latter because they are spending so much at the moment on solutions to try and combat this problem that are very, very expensive, but what were you seeing as you travel.
Yes, I think it's really hard, <UNK>, to generalize these things, but generally speaking, exactly to <UNK>'s point, the farmer is looking at it as what is it costing me to control weeds today.
What's it going to cost me to control weeds tomorrow with a new system.
And the really cool thing about dicamba is they all know it.
It's been around for a long time.
And they feel very comfortable with that technology.
So, when you look at it today, they are spending substantially more to control weeds, for example, and soybeans than they would have been spending a few years ago because of the resistant weeds.
Tomorrow, they'll be able to spend less because they'll use less other herbicides.
We'll still encourage them to use multiple molecules, but they will use less to control their weeds.
So it will be a good deal for farmers when they look at the total benefit of the whole system, both looking at seed and the chemistry package.
Yes, we get great visibility in the order books.
Maybe the puts and calls of what we're ---+ it's still early-ish, <UNK>, but what are you seeing.
I would say, <UNK>, where we're at today, it's more about logistics and moving seed into place.
I think as <UNK> mentioned earlier, if you look at the report that came out, where we would agree is that there was strength in corn in the South and strength in corn in the North.
Not sure it's as big and bold as they were suggesting that it would be, but we would have been seeing the same kind of thing.
The puts and takes is it's really wet in the South right now, it's hard to plant.
And the price change that occurred with the announcement of the corn expected planting beans look pretty attractive now.
And then you have the weather.
And I always say by the time you get to April, the weather between now and the end of May will have a whole lot more to do with how many acres of corn actually end up getting planted than what the farmers' intentions are based on ---+ from a generalization.
They're not going to swing a whole lot from where they already intended to plant.
And our order book would say they weren't quite as bullish on corn as the USDA, but we'll see how that one plays out and we'll know that over the next few months.
We're not hearing farmers making substantial changes.
It's changing a field here and there.
Yes, hard to call, <UNK>.
I think there's going to be continued ---+ I think the drive towards that integrated acre is going to continue to be important.
And when you look at <UNK>'s last point and some of the conversation this morning, it's really magnified in times that are tough for the grower.
They are looking for that incremental fraction of a bushel.
I think we've got the technology to unlock that.
So there's a piece of the consolidation of things driven by pure cost.
I think the winners in the space are those that are going to be able to combine these technologies and unlock a bushel rather than unlocking a dollar of cost synergy.
So hard to call.
But I think as we look at it today and in the comments that I made earlier and in my prepared remarks, for us the path in this is going to be driven less by large scale M&A and my guess is a lot more by collaborative efforts in bringing chemistry up onto our 400 million acre footprint.
And that 400 million acres, there is a lot of leverage and that shelf space and I think it's going to help growers in tough times.
So, that's going to be our focus going forward.
Say that again, <UNK>.
How much (multiple speakers).
Well, we are where we are.
I think you play with the cards that you have.
If you're contrasting it with and without Syngenta, Syngenta was an accelerant because it got us there I think potentially faster.
But the reality in this is we'll be able to cherry pick what products that we bring up.
So I think it's going to be more asset light.
It's going to have a smaller investment base, and we will do it I think with fewer products.
So that's the course that we're charting now at the moment and I think as every month passes we're getting smarter on the data science side.
The fascinating side of that is you are not waiting for months on a European regulatory approval.
You're not pouring fractions of billions of dollars in R&D and you see faster cycle times.
So I think the integrate ---+ our confidence on how we integrate this continues to increase more of that data science that we see unfolding.
So, that's definitely what we are trying to achieve.
Over time rebuilding from the currency, if you look at the calendar year ---+ at the fiscal year, unfortunately what happened to us is with the pricing from last season.
So entering into the first quarter, a big part of our Brazilian business happened before we took those actions because, as you know, we price in Brazil in the fourth quarter for a season that goes in the fourth and first quarter.
So when you look at our fiscal year this year, the real loss for us regarding Brazil was the first quarter when we didn't have any pricing offset.
When you get into the Safrinha season and the summer season to come, definitely what you are mentioning as totally valid.
That's exactly what we're trying to do.
So, in terms of how to quantify that, I'm not sure I've got all the numbers in front of me, nor the agility to do that on the fly.
But definitely this is exactly what we are trying to achieve.
So you would say 40% devaluation, 20% price increase, the net should be in this 20% range on the volumes to be sold.
Now, as you know as well, by the end of the first half, we've done pretty much most of our income in Brazil.
We still have a big business to come in the fourth quarter, but we also have costs in the third and fourth quarter.
Yes, we have a long-standing, very strong relationship with Sinochem that goes back probably 15 years.
In the recent years we formed a seed joint venture.
We've committed ---+ we're all in on that ventures, so we've taken our best germplasm, our best seed and we think we're well-placed within that to be a front runner in what the Chinese call the green channel, which is the accelerated process for approval of new corn hybrids and I would hope eventually new technologies.
So we crossed that bridge, <UNK>, three or four years ago.
Four.
Four years ago.
So we've been working with that team for a decade and a half.
We've been doubled down in seed for the last four years.
And <UNK> and I were there before the end of the year and then I was back earlier this year, so we've got a good relationship there.
Yes, yes.
<UNK>, why don't you cover that.
Yes, think of it a couple of ways.
So first of all, our newest varieties that we have been breeding to bring forward are going to be on the Xtend platform.
So that will be our best, highest yielding products, higher than anything else.
And that will be driven on breeding, but breeding with the Xtend technology or Roundup Ready 2 Yield for weed control.
There's another piece of this, though, that I think is also relevant.
As it becomes harder to control some of the tough to control weeds and you have to spray more herbicides, you have more risk of challenging the crop with the additional herbicides, as well as the lack of weed control also damages the yield.
As you clean up that field, the farmer is going to see the benefit of that as well.
So it will be hard to tell which it's coming from, but both of those are going to add to the overall system and the yield from the varieties.
So earlier cleanup and our best varieties, best germplasm.
So a lot of parallels with the Roundup Ready 2 system.
So, <UNK>, thanks ---+.
Thanks for your question.
Thanks for all of your questions on the line today.
Just a couple of concluding remarks to respect your time.
So I'd say in closing this morning we recognize a challenging 2016, challenging for our grower customers, challenging for our industry, but we remain bullish in agriculture and we remain bullish on our position as an industry leader.
We're confident in our long-term standalone growth plan, driven by our emerging blockbuster soybean platforms, our corn portfolio and, as <UNK> mentioned, our financial discipline.
And importantly, and I hope that came through today, we remain committed to an integrated solution strategy that's driven by innovation and by collaboration.
So, I think it places us in a very unique position to unlock value for our grower customers and for you, our shareowners.
So I'd like to, on behalf of the team here in St.
Louis, thank you for joining us on the call this morning.
