Farmers: Merger may drive up costs

Associated Press

ST. LOUIS

Bayer’s buyout of St. Louis-based Monsanto has agricultural groups and farmers concerned that the merger will lead to higher prices for seed and crop protection products, though some experts are confident the deal will be good for farmers.

Monsanto produces seeds for fruits, vegetables and crops, such as corn, soybeans and cotton, and is the world’s largest seed supplier, including genetically modified seeds. The company also makes a variety of products to protect crops from pests, disease and weeds; its Roundup line is the world’s best-selling weed killer.

Bayer makes several brands of crop protection chemicals used to kill weeds, insects and fungal diseases, including Liberty herbicides and Movento brand insecticides.

Various stakeholders have different takes on what Wednesday’s buyout will mean:

THE COMPANIES

Farmers will benefit from the combination of expertise that will emerge, officials from Monsanto and Bayer said, citing the possibilities of a combined research and development team that will be able to “accelerate innovation.”

ANALYSTS

Prices for seeds and crop protection will remain low because the farm economy simply won’t allow for higher prices, according to Juli Niemann of Smith Moore in St. Louis said.

“Everything is about cost right now because the farm industry is in the tank,” Niemann said.

FARM GROUPS

Some organizations that advocate for farmers worry reduced competition will force up prices on necessary products.

National Farmers Union president Roger Johnson said in a statement that the deal marks the fifth major agribusiness merger in the past year.

FARMERS

Blake Hurst, who farms 6,000 acres of corn and soybeans near the northwest Missouri town of Tarkio, wonders whether less competition will mean higher prices for seeds and herbicides.

“I think farmers are always concerned when mergers occur that there will be upward pressure on prices,” said Hurst.