NEW YORK, N.Y. — A slowing global agricultural economy is sending a jolt through the worldwide agribusiness community, as several top companies in recent weeks made strategic moves to strengthen through selling assets, tossing out top executives, layoffs and revamping company operations with hope to head off further losses.
Most recently, forced by a third-quarter decline in earnings by nearly half and poor company performance, DuPont USA named Ed Breen as interim chief executive following the sudden resignation of Ellen Kullman. She named Breen earlier this year as a DuPont director, as she fought with an investor group over cutting costs in attempts to save her job.
At Syngenta AG, the Swiss pesticide and seed company that turned back a takeover bid from Monsanto Co. this summer, CEO Mike Mack resigned, promoting the company’s chief finance boss, John Ramsey, on an interim basis until a permanent top executive is found. Mack left the company on Halloween.
Syngenta also announced it is selling its Vernon, Texas-based triticale research center to Montana’s Northern Seed LLC, a move the company had contemplated as Syngenta was reorganizing and deciding to put its $633 million vegetable seed division up sale. Triticale, a crossbred grain produced from wheat and rye, plays a critical role in solving the need for forage, especially in area with high cattle productions and limited water. Terms of the sale were not disclosed.
Among other company reorganizations, Dow Chemical Co. has announced a new executive leadership team, the second such move following its front office shuffle in 2012. Dow called the executive changes "the completion of a series of strategic portfolio management actions" first announced two years ago.
Jim Fitterling was just named vice chair and chief operating officer for all of Dow’s businesses except Dow AgroSciences, and Howard I. Ungerleider takes on the new position of vice chair, adding to his role as chief finance officer, taking control of Dow AgroSciences. The two will report to Dow Chair and CEO Andrew Liveris. Seven months earlier, Dow announced it was cutting 3 percent of its employees, or between 1,500-1,750 positions. It did not specify how many of these are from its agricultural division.
In mid-October Monsanto announced plans to lay off 2,600 people. Last week the company announced it is shutting down three research and development centers early next year, all part of its restructuring efforts in the face of slumping ag commodity markets. The centers are in Middleton, Wis., and Mystic, Conn., focused on seed trait development research, and at Research Triangle Park, N.C., conducting plant screening and phenotyping research.
Of the 155 employees at the three locations only 65 will be saved and moved to its expanding Chesterfield Research Village center in the St. Louis, Mo., area.
Monsanto has 22,500 employees at more than 400 facilities worldwide in more than 60 countries. The planned 2,600 job cuts account for about 11.6 percent of its workforce. Monsanto said it is committed to the St. Louis area, where it employs 5,400.
Layoffs at Syngenta began earlier this year in a plan to save $265 million. The company said the 1,800 job cuts hit its global operations and did not detail locations or how many people, if any, would be relocated.
Falling grain prices continue to hurt two of the nation’s leading farm equipment manufacturers – Illinois-based Deere and Co. and Caterpillar. During the summer, Deere facilities cut more than 1,100 workers, and just last month, it slashed 910 jobs in Iowa and Illinois, all attributed to a slowing farm economy.
CAT continues to reduce its workforce, announcing two months ago declining sales of farm and other types of equipment has forced the Peoria-based firm to slash another 10,000 jobs on top of 31,000 positions cut over the past three years.
Most of the 4,000-5,000 salaried and management positions will come before the end of next year, and a "significant" portion will be in Illinois, the company announced. Total sales projections for the year are down $1 billion from $49 billion. The company has 114,233 employees worldwide.
On a positive note, many colleges and universities turning out graduates in ag-related fields say the grassroots farm industry is thriving and hiring. A report by the USDA and Purdue University earlier this year projects an average of nearly 60,000 high-skilled ag and related job openings expected over the next five years.
The report estimates a strong demand in life science-related fields, the strongest for plant scientists, water resource professionals, engineers, farm animal veterinarians and precision agricultural and pest control specialists, and other professionals. At the same time, the farming industry complex will see a sharp decline in many normal farming positions as the aging Baby Boomer generation heads into retirement, which may also open new opportunities for others in farming.
At DuPont, as Breen steps into the temporary position, he said the company is moving swiftly to choose a new permanent leader but told analysts on a conference call Oct. 27 his review of the company included looking at potential deals in agriculture. "I am personally talking to CEOs of some other companies," in the agriculture sector, he said. "Something will give here on the (agriculture) side, consolidation should happen."
While Breen declined to say whether he is a candidate for any DuPont role, he signaled his interest in staying on. "The board knows I am fully engaged." DuPont ranks among the world’s biggest sellers of crop seeds and pesticides, along with Monsanto and Syngenta.
