Monsanto, DuPont sign supply agreement for dicamba herbicide

Thu Jul 7, 2016 1:57pm EDT
 
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By Karl Plume

CHICAGO, July 7 (Reuters) - U.S. seed and agrochemicals companies Monsanto Co and DuPont said on Thursday they have signed a multi-year supply agreement for the weed killer dicamba in the United States and Canada.

Under the deal, whose terms were not disclosed, Monsanto will supply its farm seeds and chemicals rival with the herbicide, which will be sold as DuPont FeXapan herbicide plus VaporGrip Technology, the companies said.

The chemical is meant for use with Monsanto's Roundup Ready 2 Xtend soybeans, a genetically modified variety designed to tolerate applications of dicamba and glyphosate herbicides. DuPont signed a licensing agreement in 2013 to incorporate Monsanto's Xtend trait in its seeds.

Widespread planting of glyphosate-tolerant corn, soybeans and cotton in the United States has contributed to the rise of weeds resistant to the herbicide so farmers are seeking alternative varieties that can withstand other weed killers.

Monsanto has invested more than $1 billion in a dicamba production facility in Luling, Louisiana, to supply demand it expects will blossom in the coming years. The company has said the Xtend platform will be its largest-ever technology launch.

The Xtend soybean trait was planted on around 1 million acres in the United States this year, less than initially planned due to import-approval delays in the European Union. Monsanto expects 15 million acres to be planted with Xtend soybeans next season and 55 million acres by 2019.

DuPont's deal with Monsanto comes amid a period of heightened consolidation in the farm seeds and chemicals industry that has long been dominated by six large companies.

DuPont and Dow Chemical agreed to a $130 billion merger last year and Syngenta agreed in February to be bought by ChemChina for $43 billion. In May, Monsanto turned down a $62-billion takeover offer from Bayer but said it remained open to a deal.

(Editing by Tom Brown)