Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Could you break down the $150 million of inflation and other costs, particularly the seed trade transition costs? A: Dave Johnson, Executive Vice President and CFO, explained that about 2/3 to 75% of the costs are in the Seed business, primarily due to trade transitions. Tim Glenn, Executive Vice President of Seed Business Unit, added that the costs are related to transitioning corn traits in North America, which will be a factor over the next couple of years.
Q: Can you elaborate on the initial modeling for seed and crop protection cost deflation in 2025? A: Chuck Magro, CEO, stated that the $600 million gross cost improvement is driven by cost management, productivity, and deflation, with deflation accounting for about half. He emphasized that seed deflation benefits will be realized over three years, starting in 2025.
Q: How much seed sales were deferred to Q4 from Q3, and what's the impact on earnings? A: Tim Glenn noted that the reduction in Argentina's corn area is real and not deferred. The impact is significant as Argentina is a major seed market with high margins. The reduction in Brazil's summer corn area also represents a permanent volume loss.
Q: Why are seed royalties expected to decrease next year, and where does Corteva stand on its journey to royalty neutrality? A: Chuck Magro mentioned that Corteva is ahead of schedule on its path to royalty neutrality, expecting to achieve it by the end of the decade. Tim Glenn added that the focus is shifting from royalty reduction to royalty collection, with significant progress in licensing new technologies.
Q: Can you clarify the expectations for crop protection volumes and pricing in 2025? A: Chuck Magro indicated that the crop protection industry is stabilizing, with Corteva expecting mid-single-digit volume growth driven by new technologies and biologicals. Pricing is expected to remain under pressure, but the company anticipates outperforming the market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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