Growing up "Farm size will continue to increase ...for three reasons: to spread machine costs over more acreage...; the desire to achieve higher income levels; and concentration of land ownership in older hands." - Neil E. Harl, Iowa State University, in a speech to the Chicago Farmers group.
Tyson deal off Smithfield Foods' plan to purchase Tyson Foods' hog operations recently fell through. Smithfield had announced in September it would buy Tyson's The Pork Group for about $80 million. An announcement from Tyson about the failed deal reports that its hog operations did not fit Smithfield's expectations or long-term plans.
Smithfield's other big hog purchase is expected to go through, however. Early this year, Smithfield should take possession of Murphy Family Farms' hog operations with its 325,000 sows. Added to Smithfield's current hog operations with 350,000 sows, the company will account for 13% of the nation's hog slaughter.
Seeking a new Team FIN As we enter a new year, we've decided it's time to add more members to our elite group of farmers that we refer to as Team FIN. We involve members in many projects, from generating ideas and critiquing stories to supplying input buying expertise, walking farm show aisles and even testing some new products.
If you want to be a member of the new Team FIN, you should represent the farmer of the new millennium. You may be a mechanical wizard, a technology lover, a large crop or livestock guru, a contract crop grower, a farm manager or crop consultant, or even all of the above. You are honest, trustworthy, open-minded and objective, and you combine a passion to succeed with the skills to make it happen.
Quickly, send us a letter and/or resume describing your farming experience and operation, and your specific skills and interests. You can e-mail it to FIN@Intertec.com or mail it to Farm Industry News, Edit. Dept., 7900 International Dr., Suite 300, Minneapolis, MN 55425. Application deadline is February 15, 2000.
Monsanto, Pharmacia & Upjohn to merge Monsanto Company and Pharmacia & Upjohn an-nounced before the holidays a planned merger-of-equals transaction that surprised industry watchers. The merger will create a combined company, still unnamed, that has $17 billion in 1999 sales and a market capitalization of more than $50 billion. Monsanto reported it expects about 20% of the agricultural business to be offered in an initial public offering (IPO). The ag business will then be a separate legal entity with a stand-alone board of directors and its own publically traded stock after the IPO is completed.
Headquarters for the new company will be in Peapack, NJ. Current CEO of Pharmacia & Upjohn Fred Hassan will be president and CEO of the new company. Monsanto Chairman and CEO Robert Shapiro will become a nonexecutive chairman for 18 months.
Lawsuits...lawsuits...lawsuits On November 23, Pioneer Hi-Bred International re-ceived a broad patent to a method for making transgenic corn.
Pioneer developed the system for corn transformation using the "gene-gun" technology. But rights to products derived from bombardment-mediated transformation - including insect and herbicide-resistant hybrids and inbreds on the market today - are in dispute.
That same day, Pioneer filed a lawsuit against Monsanto and Novartis for infringing this patent, contending that their seed divisions are wrongly making and selling corn plants modified by this gene-gun method. The suit asks a judge to stop the companies from using the method and to award damages based on reasonable royalties on sales.
Because this gene-gun technology has been widely used across the industry to develop many biotech hybrids, the big questions are, How far will this suit go, and what price will farmers pay?
Monsanto also faces a headache from a class-action lawsuit, which charges that the company runs an international cartel to control the world's market of corn and soybean seed. It also accuses the company of failing to thoroughly test bioengineered products for safety.
Well-known activist Jeremy Rifkin and a coalition of environmental groups including Greenpeace initiated the lawsuit on behalf of six corn and soybean farmers from Indiana, Iowa and France.
Rifkin reportedly hired a "dream team" of lawyers to handle it. The team includes David Boies, who led the Justice Department's prosecution of Microsoft, and Michael D. Hausfeld, the Washington lawyer who represented Alaskan natives on the Exxon Valdez oil spill.
The lawsuit says Monsanto has tried to gain control over the corn and soybean seed markets since 1996. It states the company conspired with other seed companies to inflate prices and tech fees.
Monsanto responded to the lawsuit, stating it is based on unfounded claims by "veteran antagonists." A company official says the company is confident the suit will be dismissed.
EPA actions in question A study by Harvard University shows that the EPA's proposal to regulate several classes of pesticides will do more harm to public health than good. The Harvard analysis reports that EPA's attempt to limit the use of certain compounds including all organophosphate and carbamate pesticides could cause 1,000 premature deaths of Americans each year. The deaths are attributed to a decrease in disposable income and lower intakes of nutrients related to a ban on the two pesticide classes.
"It is impossible to link consumer exposure [from the two groups of pesticides] to any specific harm," the Harvard analysis states. "Any benefit that might come from preventing farmers from using these products will be partially or totally offset by risks induced by [their] ban." EPA has targeted these two classes of pesticides in a review under the Food Quality Protection Act. The American Farm Bureau Federation supported the Harvard study.
Lawsuits ended An agreement between Novartis Seeds and Mon-santo Company along with its seed unit Dekalb Genetics Corporation settles all pending lawsuits between them. The legal actions involve property rights regarding Bt corn, specifically Novartis NK Brand YieldGard corn and Novartis NK Brand Knockout corn.
Novartis secures a royalty-bearing license for future sales of Bt corn and for glufosinate resistance in corn. The company also agrees to pay the license for past sales of NK Brand Knockout corn.
The agreement ends the patent infringement lawsuits of Monsanto against Novartis; Dekalb against Novartis; and Novartis against Monsanto and Dekalb; and the mutual breach of contract lawsuits between Novartis and Monsanto.
Garst still Advanta The recent AstraZeneca and Novartis merger does not include Garst Seed Company. Instead, Garst, AgriPro Seeds, AgriPro Wheat, Interstate Seed Company and PSA Genetics are still members of the Advanta group of companies.
Survey says DECREASED CHEMICAL USE 19% of farmers who planted Bt corn in 1997 decreased their insecticide use. 26% of farmers who planted Bt corn in 1998 decreased their insecticide use. (Study conducted by Marlin Rice, Iowa State University entomologist, in conjunction with entomologists from Nebraska, Minnesota, Kansas, Illinois and Pennsylvania)
Finding humor in mergers We recently received this e-mail from a colleague who found some humor in today's big-business merger mania:
Hale Business Systems, Mary Kay Cosmetics, Fuller Brush, and W.R. Grace Company merge to become Hale Mary Fuller Grace.
Polygram Records, Warner Brothers, and Keebler Crackers become Polly-Warner-Cracker.
3M and Goodyear become MMMGood.
John Deere and Abitibi-Price become Deere Abi.
Honeywell, Imasco, and Home Oil become Honey I'm Home.
Zippo Manufacturing, Audi Motors, Dofasco, and Dakota Mining become Zip Audi Do Da.
Denison Mines, and Alliance & Metal Mining become MineAll Mine.
Federal Express and UPS become FED UP.
Xerox and Wurlitzer merge and begin manufacturing reproductive organs.
Fairchild Electronics and Honeywell Computers become Fairwell Honeychild.
3M, J.C. Penney and the Canadian Opera Company become 3 Penney Opera.
Grey Poupon and Dockers Pants become Poupon Pants.
Knott's Berry Farm and National Organization for Women become Knott NOW!