Bayer Announces End To Monsanto Name After Merger

The mega merger between Bayer and Monsanto was approved last week by the U.S. Justice Department ending months of anti-trust scrutiny. Bayer will have to sell off an unprecedented $9 billion in industry assets in order to clear the regulatory hurdles and the deal is expected to close on Thursday.

The news on Monday was that Bayer will end the Monsanto name after the merger due to the negative public image it has with consumers. The news is not surprising given the backlash Monsanto has received for years from the American public and the farming industry.

The news that the merger was going to move forward is a surprise to many people, the companies are both huge and have very diverse product portfolios. However, those product portfolios are clustered in the same types of industries especially when comparing the agriculture products holdings of both companies.

Therefore, that necessitated the big sell-off of assets by Bayer to make this merger happen. The precedent for a merger this large to actually be approved will have a tremendous impact on future M&A activity.

The Bayer – Monsanto merger will clear the path for mega-mergers to take place in other industries in the future. This is a merger that makes Dow-DuPont look small and that is a frightening prospect.

In my view I think the “Big Pharma” industry and the major media companies are going to try to capitalize on this merger with attempting to push through M&A proposals of their own in similar scale. The biotech field could also use this merger as an example of precedent for their own consolidation activity.
Furthermore, this merger between two titans in the agricultural industry will have an impact on the Disney bidding war with Comcast over the remaining assets of 21st Century Fox. That is a big decision that federal regulators will eventually have to make which will have an impact on the consumer who spends time watching TV or movies.

The Bayer – Monsanto deal is far more significant because, even though the Monsanto name is being erased from history, the products they manufacture will remain. The brand names such as Roundup will remain active and the merger with Bayer will not change anything, it is business as usual. This is bad news for the consumers, the farmers, and just about everybody.

Monsanto has built a negative public perception and an even worse brand image on the unabashed manufacturing of pesticides, herbicides, weed killers, and GMO containing seeds for food crops. The company has continued to make products that have been linked to certain cancers, autoimmune diseases, asthma, autism, and a host of other maladies.

The perception of Bayer in the U.S. is one that largely is shaped by the eponymous brand name of aspirin that is very popular as well as Alka Seltzer and some other branded products in the drug store channel. Those brands enjoy a largely positive image in America, and in my conversations with many people about this topic another theme came to the surface.

That theme is that German companies have a perception of integrity and for producing goods of high quality. The people I spoke with had the impression that Bayer would “turn around” Monsanto and that European influence would be for them to start making organic, environmentally friendly, and non-GMO containing seeds.

Unfortunately, from all the public statements we have from Bayer in Germany that will not be the case in this merger. They plan on keeping the U.S. headquarters for the new conglomerate in St. Louis, and they plan to continue to make those same products that Monsanto is producing currently. This is not to imply either that Bayer lacks integrity or that European companies are losing that sense of common values because that would be an inaccurate generalization.

Bayer is a microcosm of society: it creates some things that make the world better and it creates some things that make the world worse. It is also a perception versus the reality, some people feel that GMOs are safe and that having a good-looking lawn is more important than not using chemicals on the grass.

That strategic direction may surprise some people, especially Americans, but it is to be expected. Bayer will inherit brands from Monsanto that make billions of dollars in revenue each year. The American consumer and the farmers lose out here because this merger creates less competition in the seed and other agricultural products areas. The American consumer loses because the GMO and genetically altered food fight just became more difficult to win.

In the end, Bayer might enjoy a positive public perception in America right now, but it remains to be seen how that might change in the months and years ahead. The name Monsanto might be retired from the ranks, and Twitter is going to take the place of Monsanto in the S&P 500 this week, but Bayer is now tied to the legacy that Monsanto has built, and it is a rather negative one at best.

Bayer has made statements that they plan to “engage the consumer in new ways” I have no idea what that means. I do know that it does not include the discontinuation of Roundup or any of the other harmful chemical products produced by Monsanto.

This merger will have a direct impact on the American food supply, on the prevalence of genetically engineered ingredients in food, and on the future of mega-mergers. The effects of this merger will be seismic and will be felt for a long time to come.

Monsanto Invests in Partnership with Pairwise Plants

In a follow up to another article done on genetic editing and CRISPR technology in modifying food products, Monsanto made an investment on Wednesday that made headlines.

The agricultural products giant, Monsanto, released a statement that it has made a $125 million investment in Pairwise Plants, a startup company specializing in genetic editing. Monsanto is banking on the technology, especially the method known as CRISPR, to produce fruit that lasts longer on store shelves and tastes sweeter.

The initial testing, according to published reports, in this Monsanto – Pairwise Plants venture will be on the strawberry. The process of genetic editing of food is different than that of genetically modifying (GMO) because it acts as one scientist explained, like a pair of “molecular scissors” which will cut out certain parts of the DNA strand to enhance other attributes.

The method allows for manipulation of the DNA of apples or strawberries, or soybeans to make them either taste better or stay fresh for a longer duration of time. The ethical implications are significant with many questioning whether science should be changing something that God created.

Furthermore, the boundaries of the gene-editing process are also in question in the context of what they could look to use the CRISPR method with in the future. The questions surrounding the use of the method on livestock to prolong or change the shelf life of meat or fish is a huge potential dilemma.

Some fine journalists have compiled some excellent content on the topic of gene-editing. I am more concerned with the implications this presents from the perspective of man playing God with our food supply.

The research shows that GMO is a dirty word, associated with all sorts of problems and issues. I have written several pieces on the GMO debate and the negative impact that genetic modification has had relative to certain health problems and disease states.

The process of genetic editing is one that Monsanto and the other agriculture products manufacturers are pinning their hopes on being more acceptable to the general public. They have pinned those hopes to the messaging around the process of genetic editing being more of a subtle procedure than the GMO scenario.

They also hope to confuse the customer with the science involved and talk about how the process is “more natural” than the GMO process. The whole situation is one of twisted logic. The core of the process still involves altering the way the fruit or vegetable is currently constituted.

The farmers and grocery industry will be whole heartedly behind this new process because it will yield them better profits. However, our society has to ask itself: at what expense?

This is also not the first strategic business move that Monsanto has made with regard to genetic editing, about a week ago they entered into an agreement with a firm called TargetGene to explore what are known as multiple gene edits. They also plan to use this partnership to expand the gene editing process into more potential product categories.

The fact that this activity has gone mostly unnoticed by the public and mostly unchecked by the federal government is also an issue which compelled me to put this piece out. The process changes the genomes of certain crops in our food supply. The results of which have potentially serious consequences.

The proponents will point to the assumption that genetic editing will reduce the amount of GMO seeds being produced (see my previous post to this one) especially in the case of certain crops. The detractors will bring up that the seeds and the process of CRISPR will not happen overnight and may not have that widespread impact on the GMO seed issue.

In a world where autoimmune disease rates are increasingly on the rise as are rates of autism and Parkinson’s disease all being linked to the food we eat, we do not need any more altered food products.

The potential for Monsanto to merge with Bayer to become an even larger entity could provide even further potential investment into genetic editing. The potential for use of genome editing in animals and in humans also hangs in the balance.

The question remains: should scientists have the ability to play God? Should this process be used in human embryos to alter what God created?

My answer to both of those questions is a resounding: No.
It is my hope and prayer that your answer is the same.

Tip Of The Iceberg: Syngenta Settlement With Corn Farmers

The settlement that was announced last week and awaits the approval of the court system involving a class action lawsuit by corn farmers against the agricultural chemical juggernaut, Syngenta, is just the tip of the iceberg involving international concerns over genetically modified crops.

The suit dealt with a strain of modified corn that Syngenta sold to the farmers under the guise that it was going to be grown for export to China. However, the big issue was that China had not approved that strain of GMO corn and Syngenta did not get approval prior to negotiating the deal with the farmers.

Ultimately, China rejected the import of millions of tons of the genetically modified strain of corn called Agrisure Viptera. This tremendous amount is what caused the settlement numbers in this case to multiply significantly.

The settlement is over $1.5 billion and, according to Reuters, would be the largest class action settlement for an agriculture case in American history. This whole case represents a larger problem with the conglomerates running the seed industry, with GMO containing products, and with the import and export of certain staple crops within the food supply.

Syngenta is now owned by ChemChina, in a merger that was well publicized recently and heavily debated because of the implications of Chinese ownership of a company which supplies products which are integral to the American food supply.

It should be noted that ninety percent of the U.S. corn crop supply is genetically modified.

This sadly, is one piece of a giant patchwork of international export deals involving GMO staple food sources, not only corn. It includes wheat, soybean, and sugar beet crops as well. It is nearly impossible to find a mainstream food product without the “made with genetic engineering” disclaimer on the label.

The international laws around GMO food products make for even more unknown variables. There are certain countries that do not require the disclosure of ingredients that are GMO containing and do not label crop sources that are genetically engineered.

The push for organic foods and organic staple crops is making a resurgence in some parts of the world but the main issue is that the farmland is already tainted from GMO seeds that it is very difficult to impossible to use that land for organic crops.

The seeds are already genetically altered for so many crops that even if a farmer used organic products to preserve and sustain the crops they would inherently contain GMOs. The most effective way to deal with GMOs is at the seed level and growing less crops of corn for ethanol use.

However, this also is easier stated than put into tangible action. The agricultural seed industry is dominated by a few conglomerates: Monsanto, DuPont, and Syngenta. Monsanto controls over one quarter of the entire seed industry globally, and those three companies account for almost half of the entire global seed industry, which is a staggering figure.

That level of control into the hands of so few companies is a setback to any substantive progress being made with non-GM seeds. Then, consider further that all three of those enormous companies are in transition: Monsanto is in merger talks with Bayer, DuPont has merged with Dow, and Syngenta was merged with ChemChina in a $43 billion deal.

Some companies have taken the “Safe Seed Pledge” promising to not use GMO ingredients in their seeds, but they are used in smaller scale amounts for gardening and not for mass production. The scale up for the demands of the food supply make the reductions in GMO crops problematic.

The genetically modified trend is growing to impact fish and other livestock as well. It is presenting some moral and ethical questions along the way.

In a time period where social media and the internet has made for increased transparency, the international trade deals and ambiguous labeling laws for genetically engineered or modified foods make it incredibly difficult for people to know what they are eating.

The import of genetically modified ingredients is a whole other avenue where food products could become infiltrated with GMOs. The link between certain ingredients and genetic modification has been well established and internationally it is difficult to find alternate sources.

The United States got into the GMO crop scenario so deeply it is going to be hard to reverse course at this point. The European Union, by contrast, does not allow the sale of GMO food and produces it on a small percentage of their farmland for export purposes only.

The settlement by Syngenta over the failed exports to China is just one trade deal gone wrong. It is just one piece to the puzzle, it is the tip of the iceberg in a maze of deals centered on GMO products. The rest of those pieces will fall in future and the public questions about GMOs will continue and sadly the answers are not very promising.

Follow Up: The GMO Labeling Debate Continues

The GMO labeling debate continues on, now almost eighteen months after the 2016 bill was signed to require food producers to disclose genetically engineered or genetically modified ingredients on the labels of consumer products.

The debate at this point centers around new legislation in Congress that the big lobbying groups, such as GMA (Grocery Manufacturers of America), are advocating for which will allow some loopholes to the disclosure of genetically altered ingredients.

This week in the news, the GMA suffered a setback when Nestle decided to join The Campbell Soup Company and withdraw from the GMA over the issue. Nestle and Campbell Soup disbanded their membership in the group over this contentious issue of GMO labeling.

Both Nestle and Campbell Soup favor more transparent disclosure of genetically modified or engineered ingredients. In a previous article I produced, the decision by The Campbell Soup Company to make a full disclosure of GMO ingredients before it was required by law brought significant traction and attention to the legislation that eventually gained passage in 2016.

The GMA group wants less transparency in the process, and the opinion of the Nestle and Campbell Soup is that direction will damage the relationship with the consumer more than just disclosing the presence of GMO ingredients up front. The average consumer today has far more information available to them and many shoppers are significantly more health conscious than in prior generations.

However, at the same time, some consumers do not care about GMO or genetically engineered ingredients in their food. Some consumers have a favorable view of GMO ingredients and feel they are safe. Many consumers are making purchasing decisions strictly based on price, and they cannot afford to stretch their budget to buy products that do not contain genetically engineered ingredients.

The other force at play here is that depending on the type of grocery item on the list, the non-GMO versions are either difficult to find or do not exist. The second most important attribute to shoppers in grocery channel surveys after price/value is time/convenience. The average shopper has a very busy lifestyle and most people have what they would term “time sensitivity” and that is a huge component in some shoppers just doing the “grab and go” without reading labels.

It should be noted that the majority of Americans have a negative opinion of GMO and genetically altered or engineered ingredients in food products. It has become an issue where the consumer is making purchasing decisions based on that one factor, which makes the labeling transparency crucial.

Some food companies have noted sluggish sales of certain product categories and are rapidly designing alternative versions that are either organic, gluten free, soy free, or GMO-free.

The current legislation regarding GMO labeling has a few different options for the food producing company with regard to the design of their label deck. The first option is to highlight the ingredient(s) that are genetically modified and then put a disclaimer below the ingredients list that the highlighted items are made with genetic engineering.

The second option is to place an asterisk next to the ingredient(s) that are modified or genetically altered and then below the ingredient list have a similar disclaimer as option one: made with genetic engineering/modification.

The third option is to not highlight or asterisk any individual ingredients on the label and put some type of bold or highlighted statement reading: this product contains ingredients made with genetic engineering.

Then what is known in the industry as “option four” which is going to become more prevalent on packaging and label decks for companies who want to be less transparent about their ingredient statement. This option allows the food producer to put the disclaimer of the genetically altered or engineered ingredients on a document that can only be found if the consumer scans the QR code on the package.

The lobbying and special interest groups for the GMO free or those against the use of genetically engineered ingredients in our food products have several issues with this option for disclosure.

The first point of contention being the obvious one, the consumer has limited time and yet they are going to have to scan a QR code on individual packages and then read the disclosure statement to determine whether or not it is genetically modified, that is an unrealistic expectation.

The other major point of concern is the elderly, the economically disadvantaged, and those with other physical handicaps do not have access to the technology needed to scan the QR code to find this information.

The option four labeling is also being used on items that the average consumer would not anticipate being genetically engineered: such as grapes, certain types of juice products, and bottled spices. This option, just at face value, seems dishonest to the consumer as well.

The role of the QR codes in the labeling of food products and disclosures in any future legislation remains to be determined. It is definitely going to be one point of contention moving forward.

The labeling of food products and GMOs took another on another aspect in the news this week, with a major news organization publishing a story based on the results of a study published in JAMA where scientists analyzed the effects of the pesticide called Roundup.

The study found that people living in Southern California in recent years have had an increased level of glyphosate in their system which is the active ingredient in that pesticide product (see my earlier article on the effects of this product and the food supply) it is increased about 500%.

The study in Great Britain of the effects of glyphosate on rats demonstrated an increased level of liver disease and liver cancer. This is something that the scientists will monitor in California with their study participants. In fair balance, it is not known whether the increased levels in Southern California are due to the ingestion of foods with higher levels of GMOs, or if the participants breathed in particles of the pesticide from nearby farms.

The use of pesticides, herbicides, and genetic engineering has altered our food and our crops. It is trending in lockstep with an increased rate of illness in Americans from higher rates of cancer, to autoimmune diseases, autism, Parkinson’s disease, and dementia.
The American public should have the right to know if the products they buy to feed themselves and their families contain ingredients that are genetically modified or altered. It should be up to the consumer to make their own choices based on having all the facts in front of them.

The debate on GMO labeling and whether or not genetically modified foods are safe will continue on, and what is left is for you to decide which side you will be on.

The Next Battleground: Gene-Editing & Food Products

The vigorous pushback that GMO (genetically modified) or genetically engineered ingredients in our food supply have received is a topic that I have covered here on Frank’s Forum as well as for other news websites for about four years.

My position regarding this issue is well documented as being against the use of genetically modified organisms or genetically engineered ingredients in our food. I have also detailed the problems inherently built into our food supply chain with genetically modified seeds. This scenario has fostered conditions where it is very difficult in the agricultural realities of today to avoid GMOs or genetic engineering in certain staple crops: corn, soybean, wheat, and sugar beet.

In those cases, I am a staunch proponent of the need for clear labeling practices for food production companies to notify the consumer of whether or not the item in question is made with genetically modified/engineered ingredients. I believe in the movement and the slogan fostered by another group, we have “a right to know if it is GMO”.

I was researching a set of different resources last week in the library for a GMO related piece, and I stumbled upon some research on genetic editing, or gene-editing, used in crops. This particular data set was on a study using genetic editing in corn for commercial use and not for human consumption.

The process of gene-editing inserts desired traits into the genetic pathways of crops and livestock. This trend is alarming to some, and intriguing to others; it certainly presents an ethical set of questions.
The intent, according to some published reports, is for gene-editing to be used in the human food supply in the future. The large corporate players in the industry have already made statements to the media indicating that their expectation is for gene-editing to be integrated into food production.

This raises some very important ethical questions about the alteration of the DNA of food which is grown in the earth. It raises serious questions about the line of division between man and God.

The process of genetic editing in food is also generating a new oracle within certain circles as “GMO 2.0” ; an inference to this scientific method being simply a continuation or new version of GMO ingredients in food. The use of the CRISPR method allows large chemical companies such as Dow/DuPont the capability to splice the genetic makeup of the food source.

The agricultural science and seed suppliers have become increasingly enmeshed over the course of the last two to three years due to mergers and acquisitions activity. The repercussions of that activity translate to molding scientific advances into what could be marketed to generate profits. This is a dangerous trend particularly when it is connected to the food supply.

These same agricultural/chemical giants: Dow/DuPont, Monsanto, Syngenta, Bayer, and others are “softening the ground” (all irony aside) with campaigns designed to almost condition the consumer to accept genetically edited products. They seek to avoid the public backlash that GMOs and products with genetically engineered ingredients have faced within the marketplace.

The key to that campaign objective is to position the genetic editing as more closely related to science and the scientific makeup of the crop or produce involved. The splice at the DNA level is going to be marketed as “more natural” than the process of GMO – which has an overwhelmingly negative public perception surrounding it.

This method of direct to consumer marketing is certainly nothing new, and is an increasingly common trend in marketing. The obstacles that face the agricultural titans mentioned earlier is that the public has access to so much information now than it did twenty or thirty years ago when the genetic engineering experiments began.

The other fact that is neglected in all of this, is that the process of CRISPR and genetic editing still modifies the DNA and the chemical structure of the crop in question. The process still alters what God created with something that mankind engineered. The questions will persist that if they are moving toward genetic editing to clone a “super crop” – where does it end?

The inevitable and controversial topic of cloning will take a renewed position within the national dialogue in America. The question of human cloning will be soon to follow. The debate will again be brought to the surface and the concept of genetic editing will have higher stakes than just the food supply.

In the end analysis, the responsibility shifts back to us to educate ourselves on the concept of genetic editing, and there are numerous sources of information on this subject. The central question will remain: should man be involved in the alteration of the DNA of something that was created long before we had any technology available? Should mankind use science to change what God created?

Those answers will not be concluded easily but those are the issues we will confront in the months ahead. The battle lines are drawn: which side wiil you be on?

European Union Votes To Ban GMO Crops

The majority of countries in the European Union voted to ban crops made with two different types of genetically modified maize on Monday. However, the measure failed passage because the countries that voted against the measure did not represent 65% of the population of the EU, a requirement to defeat this proposal from moving further in the legal process.

The crops in question as part of this measure were the Pioneer brand and another from Syngenta. The EU has been consistent in their resistance to genetically modified food and to crops utilizing genetically engineered seeds for both human and agriculture use such as to feed livestock.

The rules regarding these particular proposals seem to work against the union itself from a political and policy point of view because even if a majority of the countries vote against a specific policy, in this case being GMO seeds/crops, the motion can still carry if the more populated member countries vote in favor of it.

It would stand to reason that the citizens of the smaller or less populated countries would certainly have some frustration or anger over that voting mechanism within the structure of the E.U. at this point. The European mindset toward rejecting genetically engineered or modified food ingredients has been consistent over the course of the past several years, and they have been far more successful than the anti-GMO lobbying efforts have been in the United States.

Moreover, that is not meant to be an indictment on the anti-GMO movement in the U.S., because in my view, they have been tireless in their efforts toward further transparency in food product labeling and ingredient disclosure. The movement has even gained some victories in the past 18 months or so, in the declarations on the labels for food products from major manufacturers of nationally distributed brands.

The anti-GMO movement has been successful on the state level in gaining new legislative action regarding the use of genetically engineered products in a variety of applications from food production to agricultural use. The growth of new brands that are organic and non-GMO and their subsequent success in the marketplace is evidence of a growing trend in America away from processed and modified food to more natural and healthier food choices.

However, despite the policy victories and despite the change in the consciousness of the general American consumer, the new Administration in Washington threatens to rescind some of those legislative changes regarding the ingredients in food products. This includes the policy enacted by the previous Presidential Administration requiring food companies to disclose if the product contains any genetically engineered ingredients.

In my prior article about Campbell Soup Company and their decision to disclose those ingredients prior to the change which would make that disclosure mandatory, the stock market and shareholders alike had some trepidation on how it would affect sales at the company. The disclosure has resonated with the consumer especially in the case of their soup products, where there was some shock value to the presence of genetically engineered ingredients.

In the current context of GMOs in the food industry, there are some factions that feel that a rollback of the disclosure policy would damage the overall movement for the non-GMO interests. Then, there are others who maintain that the consumer now knows which companies and products contain GM ingredients, and will likely avoid them in their future purchase patterns. The other fact remains that once a purchase pattern is changed, most consumers do not revert back to a prior pattern for product selection.
In the context of the current situation in Europe, all of this comes within the backdrop of some major shifting and consolidation activity within the agricultural seed and crop protection industries. The largest players in those industry segments: Monsanto, Dow, DuPont, and Syngenta are all the subject of merger and acquisition activity at this point.

Monsanto is in the process of being potentially purchased by German corporate titan, Bayer. Dow and DuPont are in the process of merging together to form one goliath sized company and that merger just went before some E.U. regulators and is in regulatory review in the United States as well. DuPont is in the process of selling off some business units to FMC at this time to meet regulatory approval.

Syngenta is in the review process of being acquired by a Chinese corporation, which has left some within the Western economies feeling uneasy for a variety of reasons. The potential for the Chinese to gain access to specific technologies and processes that could impact the “playing field” in that industry segment is one issue. The concerns over quality control and product assurance/ product safety when it comes to the reputation of Chinese companies for bending the rules on certain protocols is an anxious proposition when it comes to the products used to grow food.

The European Union as a governing body must be facing pressure from an economic standpoint to start utilizing more genetically modified products from a cost efficiency point of view as well as a crop protection standpoint. The lobby from the corporations involved must be significant as well or else these types of proposals would not even be under consideration.

The EU currently uses GMO products but only certain types of products are approved for each type of main staple crop. The food produced from those crops is subject to very strict testing and regulations. The political movement by the union in recent years is to provide the member states with more latitude to determine how they will regulate GMO crops.

This current vote on EU crops represents the first new GMO crop products to be considered in almost twenty years. The measure, when or if it is passed, will only affect nine countries and some regions in Belgium and England. The other 19 members of the EU have banned GMO crops from being grown within their borders.

The future of genetically modified crops in the EU is going to be interesting especially given the backdrop of the major consolidation activity within the seed and agricultural/crop protection industries currently. Those companies will get even larger and more influential, and the resistance from the citizens and governments in the members states of the EU will have to ramp up their defenses to continue to resist the policies from being altered.

Follow Up: Dow – DuPont Merger Outlook Upgraded

The latest news on the now 12 month saga that is the Dow – DuPont merger proposal is that both stocks have been upgraded from “Hold” to “Buy”. The upgraded status from Jefferies is being reported by CNBC and Barron’s among other financial news outlets, and it is due to the outlook for the merger looking more promising.

The ratings staff at Jefferies places the new odds at “90%” that the year-long quest for the mega-merger of these two chemical giants will gain approval. The rationale behind this upgrade, according to their ratings report which was quoted by CNBC is that the increased stock market activity and economic growth has created conditions where the EPS (Earnings Per Share) for chemical companies will not be tied to just traditional metrics.

The changes in the economy also have combined to create favorable industry conditions in the chemical space. The regulatory bodies involved apparently maintain that this merger will not inhibit growth and competition in their specific industry segments.

This is the backdrop for the next round of regulatory proceedings, and if this merger is ultimately approved, it amounts to a whole new slate of issues for the farmer, the consumer, and the protection of our environmental resources

The detractors to this merger are still the farmers, some agricultural groups, and environmental groups. These factions all have legitimate claims to skepticism when it comes to an over $120 billion dollar merger that will further consolidate the seed industry for crops into fewer hands.

This merger, if approved, strikes fear into the environmental advocacy groups because of the prevalence of pesticides, herbicides, and other chemical agents that the combined Dow-DuPont will market more aggressively and more cost effectively to the farming and agricultural products areas.

The combined Dow-DuPont along with chemical giant Monsanto would control the majority of the seed industry used for crops for food and other staple crops such as corn, used for alternative energy sources. The stakes for the farming industry, which is dwindling because it is harder to maintain profitability, and is still dominated by family owned farms, are enormous. These two companies could set pricing and put enormous cost pressures on farms.

The proposed merger of these two chemical titans has been tied up in the European Union by their regulators, and at one point the outlook was bleak that it would move forward. The EU regulators were told by Dow-DuPont that they would sell some of their assets to clear up the concerns over anti-trust issues that the oversight board had regarding the merger.

In February, Dow-DuPont discussed with the EU board a plan to sell off some assets in DuPont’s crop protection brand portfolio and Dow’s acid copolymers and ionomers business holdings, this is from CBS Market Watch. In earlier work I have done on this specific merger, I had mentioned the selling off of business assets or brands as the best pathway to work with anti-trust, anti-monopoly concerns held by regulators in both the EU and the United States.

The US regulators, provided that the assets are sold, seem apparently through this upgrade and the reports today to be willing to move ahead with approving this merger. The changes potentially on the horizon in Congress with regard to business regulations and the strength of the overall business climate seem to have opened the opportunity for Dow-DuPont to get this done.

The concerns of the farmer, the consumer, and the environmental advocates have definite merit because any merger this large is going to have an impact on all of those areas: the food supply, costs of food and other products, increased pesticide/ GMO use, as well as potentially huge negative environmental consequences.

Honeybees & Zika: The Spray That Saves Humans Kills Bees

The mainstream news cycle has featured the stories related to the Zika virus for a few months now. In the past two weeks a couple of those stories gained some rather significant importance in the overall context of the costs of fighting the spread of the virus.

The first was in South Carolina where government officials from both the state and county levels failed to warn the local beekeeping communities regarding a massive spraying they were carrying out to prevent the spread of Zika. The result was that those chemicals sprayed to kill the mosquitoes that potentially carry the Zika virus also killed about 1 million bees.

I have written previously on the importance of the honeybee to our domestic food supply and about the epidemic of entire colonies of bees dying in America. The honeybee population could ill afford a situation such as the one which took place in South Carolina.

Due to the fact that we are a reactionary society, the government there (and in other states) have stated that they will introduce protocols to give advanced notice to beekeepers in the future regarding the scheduling of these massive chemical spraying projects.
That change does not reverse the damage already done by the spraying in South Carolina for many beekeepers who lost their livelihood, and for the farming community there which is looking at lost crop yields. The lost yields are due to the honeybees being unable to pollinate because of the massive depletion in their numbers.

The lost crop yields translates into higher costs for the consumer on certain food products. The chemicals being sprayed may save humans from the greater risk of contracting the Zika virus, but it will come at a cost to the food supply. That is certainly a consequence that must be curtailed in the future.

The second story in the news cycle with an impact on this situation is the announced merger of two petrochemical giants, Bayer and Monsanto, which is going to have a profound effect on the honeybee population. This merged conglomerate will produce increased amounts of herbicides and pesticides which the honeybees will ingest during the course of pollination which can cause the death of the entire colony.

The impact of the widespread use of chemical agents such as Roundup has a detrimental impact on the honeybee population, and this merger will increase the availability of this and other products of similar agricultural use.

In fact, a study was just released which concluded that American farmers had increased their usage of this product by more than 20% from the prior years examined. The rationale is mainly from the resistance that some weeds had established when treated by other products. This will have detrimental consequences to the American food supply, as the main ingredient, glyphosate has been linked to all sorts of health issues in humans and animals alike.

In addition, the use of the Roundup product by the average consumer for lawn care has led to active lawsuits against Monsanto regarding the potential link to the spraying of the product and Non-Hodgkins lymphoma.

Some research has also indicated that insects which fed on the leaves of corn stalks sprayed with this product have died in large numbers. The merger of the two companies will only increase the marketing efforts around this and other products which will cause harm to humans.

The data behind many of these studies is both revealing and troubling at the same time. I encourage all of you to take a closer look at the impact of pesticides and other petrochemical products, GMOs, and other agricultural products which will have an impact on you and your family.

The use of these products also merits increased consideration because we need to protect the population of honeybees, or our food supply will face a crisis level situation.

I understand the need to protect the population from the potential spread of the Zika virus, but all of these chemicals and their consequences and effects should be examined more closely as well. It certainly bears close observation as the regulators make a determination on this merger and the federal government weighs the GMO labeling laws in the coming months.

Bayer Beware: The Monsanto – Bayer Merger

I write often about mergers and corporate takeovers here on Frank’s Forum so the opportunity to offer some commentary on the largest merger of the year was an opportunity I could not miss.

In between research and drafting of other pieces I have in the pipeline, and a final draft submitted for editorial review, I was reading the mainstream coverage of this gigantic transaction on Forbes and CNN Money among others.

I am not sure what I am more surprised about: the fact that Bayer made a third attempt which was more outrageous than the first two attempts to get this deal done, or that I knew that this merger deal was going to be announced before the end of the 2016 calendar year.

I thought the Dow and DuPont proposed deal was huge and scary (which it still is) especially given the implications for the seed market. However, this move by Bayer is also very large and bold with the valuation they put on Monsanto stock ($128 per share) and the clause if the deal does not meet regulatory approval (Bayer would pay Monsanto $2 billion). All of these factors and many more make this deal the most influential merger of the year.

The total valuation when this deal is broken down means that Bayer put a value on Monsanto of $66 billion. The deal, if approved, would do two things right away: have a huge impact on the U.S. seed market where Monsanto is the top player in that marketplace and dramatically expand Bayer’s North American footprint.

American Dream or Nightmare?

The value to Bayer is undoubtedly the opportunity to enter the North American market in a top strategic position and expand upon that through other product areas and industry segments in the future. Bayer is much more recognizable in Europe and Asia than in any other areas of the world, so growth into an essential and largely untapped marketplace for some of their products was the main impetus.

In the case of Monsanto, which has been dealing with an endless onslaught of negative publicity regarding their products and GMOs, the deal makes a lot of sense when you consider that the Dow-DuPont merger looks like it is gaining traction toward approval by regulators throughout the world. That deal did hit a snag in Europe recently, but if you are Monsanto, you proceed thinking it will eventually get done and they will be a tough combined duo to compete against.

The premarket trading of Monsanto stock, as noted by CNN Money, was $104 per share and that sort of gap between that number and the merger valuation of $128, in my time of covering M&A activity usually means that Wall Street is anticipating this deal to not be approved through regulatory channels.

Bayer is thought of in America as the company that makes aspirin and Claritin, but the reality is that they are a major player in other parts of the world in petrochemicals and agricultural chemical products. They have a position in the agricultural seeds marketplace in other regions of the world as well, and from that perspective this deal makes sense.

Why Monsanto?

Although I had a strong feeling that this outcome was going to take place with regard to this merger, I still keep coming back to the question: why would Bayer want to purchase Monsanto? I understand that Bayer swung and missed at a deal for Syngenta, another major American seed manufacturer (which is in the process of being purchased by a Chinese company, ChemChina).

Monsanto has so much baggage with the P.R. nightmare over the perception of their products in the marketplace, the potential links to their products and certain cancers, and the inevitable GMO questions. It is also no secret that I hold Monsanto responsible for putting greed ahead of the health and wellbeing of people. I have read enough data and reviewed enough clinical trials to understand the effect of pesticides and herbicides on both humans and wildlife to know that my opinion of Monsanto is not very favorable, to put it diplomatically.

Bayer top executives may have felt that the Monsanto acquisition was the best pathway to getting the market share they desired in the product areas where they have synergy in order to compete with Dow-DuPont in both the North American market and the global marketplace.

Heavy Scrutiny

This deal, make no mistake about it, will be scrutinized heavily by the political powers at play here; other online news sources are already running separate stories about that aspect of this proposed merger. Bloomberg featured a story on the merger’s impact on the cottonseed industry which if the two companies joined forces they would control a staggering 70% of the market. What further complicates the deregulation of this particular market is that Monsanto sold a piece of their cottonseed business portfolio to Bayer recently to make another acquisition themselves. I am not sure who would be to purchase assets from either company in order to satisfy regulators.

The overall picture for Bayer and Monsanto joining forces is made even further complicated because they will have limited pathways to sell off assets overall because Dow-DuPont and the ChemChina deal I mentioned earlier puts all of those companies in a holding pattern as well. Those companies are not going to be undertaking any large transactions while under regulatory review themselves.

A merged Bayer and Monsanto would control an alarming amount of agricultural products and products directly related to our food supply. They would have enormous influence and power over the pricing that all of those markets are set within. In addition, they would be able to exert enormous price pressure, which could translate to cost increases that are passed along to the consumer.

The potential combined behemoth would also have a tremendous impact on the global environment through an increased number of synergies in the pesticide, herbicide, and other agro-chemical products which will have negative effects on the soil, water, and wildlife.

The potential merger of Bayer and Monsanto is, in short, bad for the consumer, bad for the environment, bad for ingredient suppliers, and bad for farmers. I hope that the analysts on Wall Street are right, and that this merger fails to meet regulatory approval.

It is a proposal with tremendous consequences on a multitude of levels which could have a detrimental impact to our society. This proposal represents greed and the unbridled pursuit of power. I am very concerned over the outcome, and I hope I have proven to all of you that you should feel the same.

Tainted: Academies of Science GMO Report

The report issued today from the Academies of Science which essentially stated that GMOs in our food supply are safe for humans to consume came under fire by several consumer advocacy groups. The media coverage of the report can easily be found, and in fact, USA Today did fair and balanced overviews of both sides of this argument.

The focus of this commentary on my own blog here is to not delve into the specifics of the report from this organization, but rather to focus on the facts and implications that still remain in the “great GMO debate” in America. Most of you know as readers of my prior work on the topic of GMOs that I am very strongly anti-GMO. That stance has been honed by researching tons of scientific studies and empirical data from trusted sources and reading accounts of the effects of herbicides such as Roundup and their impact on the soil and crops in our country over a period of roughly 20 years.

Despite what this report released today states, GMOs are not safe for humans to consume, products such as herbicides and pesticides have caused all sorts of illnesses in children and adults. The use of genetically engineered seeds and other products in our agricultural production processes has a direct correlation to increased incidences of gastrointestinal, autoimmune, cancers, and other diseases.

Several other consumer advocacy groups and others involved in the food industry agree with my view on this report and on this situation. The reason: the Academies of Science report is tainted, it is skewed because the scientists and other members of the organization are linked with the large biotech companies and the agricultural production giants such as Monsanto. This effectively caused one group, Food & Water Watch (which is a respected consumer advocacy group) to call the results “watered down”.

This is not the first time, nor will it be the last, that the biotech and big agricultural giants like Dow Chemical and Monsanto got involved to directly or indirectly influence a report or a legislative measure when it comes to GMOs. I have written numerous articles over the past few years on this same subject with political donations being linked to high powered politicians who then change the course of a particular bill so that it is favorable to the big business interests involved.

This should come as no surprise to anyone in the audience because the genetic engineering of food has always at the core been inherently about pure greed. The ability to grow more product or make the food last longer so that stores had less perishable or expired inventory has been the catalyst behind a “make it GMO or bust” mentality.

The evidence of that is clear in the U.S. according to reports published in USA Today, Yahoo! News, and other trusted sources the following numbers for 2015 are staggering with regard to the prevalent nature of genetically engineered produce in our food supply. I have listed below the percentage of each crop that is genetically engineered:
Sugar beets = 99%
Soybeans = 94%
Cotton = 94%
Feed corn = 92%

I have written previously about the pervasive and persistent nature of the GMO problem in the U.S. based on these numbers above. It has created conditions where now the staple products are genetically modified and the soil has been degraded to a point where it is not capable of growing non-GMO produce. The other issue which is just as troubling is that the seed used in so many crops are genetically modified and two main companies – Dow and Monsanto control a huge market share in the seed business for our food supply.

The amount of feed corn that is genetically modified is also a tremendous problem because it has a direct impact on so many areas of agriculture which impacts the food that is provided to many of our sources of animal protein. In turn that creates a scenario where it is very difficult to avoid GMO containing products in your given daily food intake.

In any case, despite your view on the situation, God created all that we have been given here on Earth, every living thing, the soil, the seeds, the water, and the Sun. Then mankind came along and decided that they knew better than God and they decided to alter what God created in the name of enhanced profit margins. There are many other people and groups out there that also agree with this component of my argument against GMOs.

The incidences of increased levels of autoimmune diseases such as celiac, Parkinson’s disease, dementia, certain types of cancers, and other gastrointestinal diseases all jumped up in the past 20 years since man decided that they would alter the crops and the seeds and the soil with chemical ingredients and herbicides.

I cannot emphasize enough that the ties to the Academies of Science and the biotech and agricultural products suppliers casts a huge cloud of suspicion over the validity of the report issued today. It certainly was a far cry from an independent analysis on this issue.

National Geographic put together a really informative and well done piece on the effect of Roundup brand herbicide on the crops and the soil in the American farming system. The results, and the amount that we do not know about such a widely used chemical are alarming.

The final subtopic I will touch on with regard to this issue is the labeling of GMO product which is a debate that I have covered vigorously over the past few years as well. The consumer groups today stated that the majority of Americans still believe strongly that they have the right to know if the food they are consuming is GMO containing. That fight over labeling standards and a national protocol for labeling food products is not going away with this announcement today.

The basic premise being that even if a group states that GMOs are safe, the majority of people, whether they believe those ingredients are bad or unhealthy or not, still maintain that they should know whether the product they are going to purchase contains genetically engineered components.

The fact that so many of the staple food crops that I referenced earlier in this piece are genetically engineered creates a potentially very negative situation for certain large food producing companies such as Nestle and ConAgra just to name two. The consumer will most definitely think twice about buying a can of soup with genetically modified soy in the ingredients.

The federal government has to get involved with a standard protocol because each individual state cannot have their own separate ways of declaring GMOs on labeling for grocery products, it will become a complete nightmare for interstate commerce.

In the end, the report today did nothing to quell the debate over GMOs in the food we eat, instead it stoked the fire. This debate will continue because there is a mountain of evidence to refute what this report claimed today. The trend toward healthy and fresh/ organic eating habits in the American consumer will not change because of this report today. The distrust of the government, the disdain for lobbyists, and the general skepticism towards large corporations will continue in America, and in fact was emboldened by this report today. I urge you to educate yourself on this topic because it can have a dramatic impact on your health and that of the rest of your family. This report cannot change that fact.