As Big Ag Mergers Pile Up, Farmers Brace For Impacts

Sep 14, 2016

Monsanto's corporate headquarters is located outside St. Louis.
Credit Annie Ropeik / Indiana Public Broadcasting

The list of big agribusinesses pursuing mergers is growing, and their plans could affect Indiana facilities.

Germany's Bayer is buying St. Louis-based Monsanto, and two Canadian fertilizer-makers, Potash and Agrium, announced Monday that they'll seek to join forces, too.

Potash just opened a $90 million fertilizer distribution warehouse and rail hub in Lake County, but its future is now unclear.

A Potash spokesman says nothing will change at the Hammond facility yet. The companies will draw up an integration plan if and when their merger is finalized next summer. It would create the world's largest crop nutrient company, worth $36 billion.

The Potash-Agrium announcement was followed, just days later, by news that American seed giant Monsanto will accept a $57 billion offer to merge with Bayer. The German company is known for making aspirin, but it's also a leading producer of insecticides and herbicides.

Antitrust authorities in the U.S. and abroad are also considering Dow's merger with DuPont, and the China National Chemical Corporation's acquisition of Syngenta, Monsanto's main competitor. And last month, regulators sued to block the merger of John Deere and Monsanto's equipment unit, saying it'd form a monopoly.

"This has been a trend, where we've seen the consolidation increase in the market," says Indiana Farm Bureau lobbyist Justin Schneider. "Everyone's trying to find a way to financially stay ahead of the game."

The merging companies employ thousands of Midwesterners, including many Hoosiers, who sell seeds, chemicals and other technologies to farmers. Schneider says these multinational corporations can protect themselves from low commodity prices -- but it's unclear if they'll pass any savings on to Indiana’s farmers and agribusinesses:

"They can develop new products, they can change products, or they can do things to try to make products more stable in the environment," Schneider says. "You can also have fewer players in the market -- therefore, you're not trying as many new things. So the competitive nature is gone."

He says the Farm Bureau plans to ask the state to help fund additional independent agricultural research as more mergers go forward. Most of the deals are set to wrap up next year.