Consolidation may continue in grain markets

DEVAN FLAHIVE

Grain farmers ’ profitability can be crudely measured by the spread between input costs to grow crops and prices that commodity purchasers pay for crops . Markets for crop production inputs — including seeds , fertilizer and pesticides — have recently been shaped by mergers between agricultural biotechnology titans , including Dow-DuPont and ChemChina-Syngenta .

Now , another significant merger , this time affecting the second half of grain farmers ’ profitability equation , may be on the horizon . Reports indicate that grain trader and processor Archer Daniels Midland Co . ( ADM ) has made overtures relating to a takeover of competitor Bunge Ltd . ADM and Bunge are both powerful players in grain trade ; according to the Wall Street Journal , ADM ’ s valuation as of Jan . 19 , 2018 , was about $ 22.6 billion , while Bunge ’ s market value was about $ 9.8 billion . Due to the transaction ’ s potential size , an ADM-Bunge merger would likely be reviewed by antitrust regulators to determine the tie-

Food & Agriculture Quarterly March 2018 | Page 9

Consolidation may continue in grain markets

DEVAN FLAHIVE