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Roundup Ruled the Farm, Now Its Maker Has a Challenger

The Wall Street Journal. logo The Wall Street Journal. 1/6/2020 Jacob Bunge

DECATUR, Ill.—Before it was targeted by tens of thousands of plaintiffs in lawsuits, Roundup was the king of the field—the world’s most heavily used weedkiller. Now it’s mired in court over claims it caused cancer and viewed as a major liability for its parent company, Bayer AG. On top of that, some weeds have evolved to survive Roundup.

That has left an opening for a new contender to cover for Roundup’s failings, kicking off a clash of agribusiness rivals as fierce as Pepsi’s showdown with Coca-Cola on store shelves.

At stake are billions of dollars in herbicide and seed sales, and influence over how farmers manage crops for decades.

Bayer, the German inventor of Aspirin, was already a leading supplier of pesticides when it took control of Roundup as part of its acquisition of Monsanto Co. in 2018. The merged company is the largest seller of seeds and crop chemicals.

Bayer’s big rival, seed and pesticide maker Corteva Inc., is making moves to woo farmers away from the giant. On a sticky August morning, Corteva field specialist Dan Puck stood before dozens of farmers in an air-conditioned tent with screens flashing a green thumbs-up logo of a new weed spray named Enlist.

Corteva erected the tent to help promote the weedkiller at the late-summer Farm Progress Show. Following a magician performing Enlist-theme tricks, farmers recounted losing battles against Roundup-tolerant weeds like marestail, waterhemp and palmer amaranth.

The Enlist spray, Mr. Puck told them, was a watershed in their war on Roundup-resistant weeds. “People want a weed-control system they have confidence in,” he said. “We’re filling a void right now.”

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Roundup revolutionized farming when, combined with seeds genetically engineered to tolerate the spray, it vastly simplified weed control and helped farmers expand.

It is still No. 1, by most estimates. Many in the industry expect it to stay there for the time being, because it still kills a wider range of weeds than most other herbicides. It is used on 65% of major U.S. crops and is the biggest global herbicide brand, according to research firm Phillips McDougall.

Roundup’s dominance is waning, though, as U.S. farmers are forced to supplement Roundup with other herbicides to dispatch evolved weeds. That’s where Corteva is taking on Bayer.

Corteva, formed following Dow Chemical Co.’s 2017 merger with DuPont Co., is striking while its chief rival is vulnerable.

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Bayer’s weedkiller business, with 2018 sales of $5 billion, is contesting lawsuits claiming Roundup causes cancer. Bayer argues scientific studies prove Roundup’s safety, a position backed by regulators such as the U.S. Environmental Protection Agency. Though some farmers have filed cancer lawsuits against Bayer, most remain confident in the spray’s safety and continue to use it.

Corteva aims to exploit another concern around its rival: Bayer’s new herbicide for Roundup-resistant weeds, XtendiMax, has drawn complaints for damaging neighboring crops because its active ingredient is susceptible to evaporating off plants, drifting on wind and shriveling other crops. Bayer says its formulation of the herbicide is less prone to drifting than older versions and that complaints have declined as the company has trained farmers to spray safely.

Corteva is dispatching representatives like Mr. Puck—along with a network of seed sellers, agronomists and others—to sow doubt about Bayer’s newer spray among farmers and agricultural retailers and win them over to Corteva’s weedkiller.

The battle is on two fronts: weedkillers and seeds. For seed suppliers, it is a chance to loosen Bayer’s grip on lucrative crop-gene licensing. Seed developers insert genes that let crops resist specific herbicides—creating, for example “Roundup Ready” seeds—and other seed companies must pay to license the genes that provide that resistance. An estimated 85% to 90% of soybean seeds sold in the U.S. contain Bayer’s Roundup-tolerant genes, agricultural-industry officials estimate. Rivals including Corteva pay Bayer hundreds of millions of dollars a year to license those genes for their own seeds, analysts estimate.

For consumers, the weedkiller war has implications because herbicide-resistant weeds require farmers to spend more to keep fields clean, adding expenses that can push up food costs. Hard-to-kill weeds also threaten parks and wilderness areas.

Corteva and Bayer are pitching families of products—weedkillers, along with the seeds and genetics that survive them—under the brand names Enlist and Xtend, which includes the XtendiMax spray. About 50 million U.S. acres last year were planted with Bayer-developed soybean seeds resistant to XtendiMax, the company estimated—about 65% of U.S. soybean acreage. Corteva sold a relatively small quantity of Enlist-resistant soybeans after receiving regulatory approvals earlier last year.

By next summer, predicted Corteva Chief Executive James Collins, one in 10 U.S. soybean fields will be planted with varieties tolerant of its Enlist weedkiller. “Nothing would make me happier than to be aggressive,” he said.

Brett Begemann, chief operating officer for Bayer’s agricultural business, said farmers and crop sprayers are getting better at keeping XtendiMax under control and that Bayer’s seeds produce superior soybeans. “We’re never afraid of competition,” he said, “or farmers having a choice.”

The World Health Organization’s International Agency for Research on Cancer, which classified Roundup’s active ingredient as a probable carcinogen in 2015—Bayer has contested the classification—doesn’t see the same risk in the new weedkillers. In 2015, it classified so-called 2,4-D, Enlist’s active ingredient, as “possibly carcinogenic to humans,” one step below the risk it assigned to Roundup’s active ingredient, glyphosate. The EPA says 2,4-D has low toxicity for humans and isn’t a cancer risk.

The WHO agency hasn’t evaluated the cancer potential of XtendiMax’s active ingredient, dicamba. While some studies have linked dicamba exposure to non-Hodgkin lymphoma and birth defects, the EPA doesn’t consider dicamba likely to cause cancer in humans and hasn’t found evidence of chronic health problems from its use.

Roundup is ubiquitous thanks to its ability to wipe out dozens of weed species and to the debut of crops genetically engineered to survive the weedkiller. Inserting those genes into corn, soybean, cotton and other crops allowed companies to breed Roundup Ready plants that could survive being sprayed with Roundup while plants around them died.

Corteva’s top seed brand, Pioneer, helped spread Roundup Ready crops after it gave the new technology a stamp of approval among farmers in the 1990s by licensing biotech genes from Monsanto. The relationship soured as both companies expanded and launched competing technologies, even as licensing deals kept them mutually reliant.

On U.S. soybean fields, Roundup and other glyphosate-based weedkillers rose from 15% of farmers’ herbicide use in 1996 to 89% in 2006, according to U.S. Agriculture Department data. By then, about two-thirds of soybean fields were being sprayed solely with glyphosate-based herbicides.

Roundup’s power faded as weeds evolved. By 2002, Roundup-resistant weeds were identified in Missouri, Tennessee and some other states, according to the International Survey of Herbicide Resistant Weeds. Six years later, resistant weeds were popping up across the Midwest. In 2020, about 70% of U.S. soybean fields will harbor Roundup-resistant weeds, estimates pesticide and seed maker Syngenta AG.

Farmer Lynnet Talcott for years has fought Roundup-resistant marestail and waterhemp weeds in her family’s eastern Nebraska fields. Extra herbicides required to kill them increased expenses, but she was afraid to try Bayer’s XtendiMax or other dicamba-based weedkillers after nearby spraying damaged her soybeans, she said.

“Your liability you’re looking at is a major issue,” she told attendees in the Corteva tent at the Farm Progress Show, where she joined other farmers on a panel discussing Enlist. Corteva covered her travel and lodging for the event.

She and the other farmers described how the Corteva spray killed weeds but didn’t harm nearby crops and wildflower patches. “Peace of mind,” Corteva’s Mr. Puck told the audience. “Such an important benefit.”

Studies and field work by university agricultural researchers in Arkansas, Missouri, Tennessee and North Dakota have found 2,4-D, the ingredient in Corteva’s Enlist, to be less prone to evaporation than dicamba, the ingredient in Bayer’s XtendiMax.

Bayer has said its XtendiMax version of the herbicide holds closer to where it is applied, that most crop damage has arisen from farmers not following spraying instructions and that XtendiMax doesn’t drift when applied in the right conditions and with the correct equipment. Ty Witten, Bayer’s director of North American crop-protection strategy, said complaints last year declined even as XtendiMax-tolerant soybean acres expanded, showing farmers were improving their control of the herbicide.

Bayer’s herbicide has divided farmers in some farm states since it began selling the Xtend herbicide-and-biotech-seed combination in 2017. There have been fistfights and even a murder over alleged crop damage, according to Arkansas law-enforcement officials and farmers. State and federal regulators have placed restrictions on how it can be sprayed.

Farmers fear weeds more, and dicamba has proven effective against weeds that can spread rapidly and choke out crops. Bayer’s biotech soybeans secured final regulatory approvals in 2016, getting a jump that enabled the new seeds to capture a majority of U.S. soybean fields.

Corteva’s rival soybean products were held up for years by a regulatory review in China, the biggest soybean importer, over whether to approve their importation. China granted approval in January 2019, and Corteva is racing to catch up, growing more Enlist soybeans in its seed-production fields in Argentina, Brazil and Chile.

To match Bayer’s success, Corteva aims to also license out its Enlist-tolerant crop genes to other seed companies, which pay fees to insert those genes into their own soybean varieties. Corteva estimates 120 seed companies, including Syngenta, have licensed Enlist genes. Corteva could benefit from farmers needing to spray those crops with Corteva’s related weedkiller. Syngenta also licenses Bayer’s Xtend genes.

That means persuading local farm suppliers like Nathaniel Muzzy, a Thief River Falls, Minn., seed and pesticide dealer who last year began offering Corteva’s Enlist products alongside Bayer’s Xtend line. He said Roundup-resistant kochia and ragweed arrived in northern Minnesota around four years ago.

Bayer’s XtendiMax works, he said, but farmers worry about damaging neighboring fields, and local sales have been slow. Farmers, he said, have been desperate for a solution.

When Corteva announced on Jan. 17, 2019 its planned launch of Enlist-tolerant soybeans, Mr. Muzzy said farmers began asking him about the products. He quickly switched about 40% of his soybean-seed orders to Corteva’s products and soon sold out. “People don’t want to spray and go to bed,” he said, “and hope it doesn’t move and two weeks later, their neighbor’s crop is fried.”

Bayer over the past two years has hosted XtendiMax training sessions for farmers and crop sprayers across the Midwest to reduce damaged fields and mitigate complaints. It said it has given away over one million specialized nozzles that can produce herbicide droplets that better stick to plants.

Last year, the 19 biggest soybean-producing states recorded 1,544 dicamba-damage complaints, versus 1,604 in 2018, according to state agriculture officials. In 2016, the number was 257. Bayer is developing a new XtendiMax version it says will better remain where sprayed.

Terry Fuller, who sells Bayer and Corteva products in Poplar Grove, Ark., said farmers are interested in Corteva’s spray. But, he said, dicamba’s proven weedkilling ability means many Arkansas farmers will keep planting Bayer’s XtendiMax-tolerant soybeans. Some, he said, will plant them to ensure their crops aren’t damaged by an XtendiMax-using neighbor.

“I had a friend tell me,” he said, “ ‘You either plant Xtend or hate your neighbor.’ ”

Corteva is also a big customer of its big rival—and would like to change that. DuPont, Corteva’s predecessor, in the mid-2000s developed soybeans to resist Roundup and another herbicide as a solution to Roundup-tolerant weeds. Monsanto sued DuPont in 2009, saying DuPont’s seeds illegally incorporated Monsanto-patented genes. DuPont filed a countersuit accusing Monsanto of unfair business practices.

They called a truce in 2013 after Monsanto prevailed in court. DuPont agreed to a 10-year, $1.75 billion licensing deal to use Monsanto-developed crop genes. That deal made Corteva a major licenser of Bayer’s XtendiMax-resistant soybean genes. About 65% of Corteva’s Pioneer soybean seeds use XtendiMax-tolerant genes, Corteva officials said.

By early 2020, Corteva’s Mr. Collins said, Corteva will know how fast it can increase sales of its Enlist herbicide and seeds—and when it might scale back business with Bayer. “We write some big royalty checks,” he said, “and would love to back ourselves out of those as fast as we can.”

One August afternoon, Corteva salesman Casey Mattke courted farmers and agricultural retailers in a field near Whitewater, Wis. In muddy boots, he led them past soybeans sprayed the previous week with Enlist and then past rows of green pumpkin vines—sensitive to herbicides—undamaged nearby. It is a presentation he and colleagues gave over the summer at demonstration fields across the Midwest.

Mr. Mattke pointed to a field across the road. “What if this was an Xtend field?” he asked. Between the afternoon’s moderate wind and the government-mandated buffer to protect neighboring fields, he said, spraying the Bayer product would be prohibited.

With Corteva’s weedkiller, he said, “you could spray today.”

© Jeff Roberson/AP  

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