Watching the birth of an agricultural company through its share offering is a lot more interesting than one might imagine, at least for me.
I’m not talking about a tiny new tech-startup. This one was a carving off of one of the largest agricultural-inputs providers in the world from a merged pair of chemical and manufacturing giants.
Corteva AgriScience is the two-year old name for Dow and DuPont’s combined agricultural division. The new company split the agricultural group off, as you might have read in this and last week’s Western Producer or seen in the video with the stories on producer.com.
The result is a new stock: CTVA on the New York Stock Exchange.
The slicing and dicing and gluing back together of companies isn’t new, but this time it felt like business was fixing something that had been broken inside some large agricultural companies. When agriculture and food form pieces of multinational, multi-industry organizations, the parent corporation can be supportive when times are tough in the sector. However, more often than not, it means that when times are fair-to-middling in agriculture and food, the parent organizations will refocus agriculture and food’s success and profits into short-term, growthy non-ag areas of the business or cover those operations’ shortage of dividends to shareholders.
When times are good, rather than shifting increased profits away from agriculture into other sectors, pure-play businesses can, provided the management has explained things well-enough to the shareholders, invest those returns for increased long-term growth and competitiveness. When times are average or poor, investments in science and marketing remain important to the stability of the company. If you haven’t noticed, the really good times are hard to predict in this business.
Like plant breeding, the rewards of investing in agriculture are built on well-researched dreams, well-executed plans and luck.
Not having to compete for internal investments with paints and coatings, cellular phone components, fabrics and myriad other industrial and pharmaceutical businesses mean that DowDuPont’s agricultural brands will be charting their own course.