Upstream Ag Insights September Recap

Welcome to the Upstream Ag Insights September recap!

The goal of each monthly recap is to surface the handful of things that can be valuable for any agribusiness professional over the next thirty days: a theme shaping the industry, key numbers that quantify market dynamics, useful images that deliver concise insights, and a framework to think about for the month. That is what you’ll find below.

Index:

Theme from the Month: What Route Does Innovation Take to the Farmer?
Notable Numbers from the Month
Framework of the Month: Proprietary Product Value Ladder
Image of the Month:
In Case You Missed It

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1. Theme from the Month: What Route Does Innovation Take to the Farmer?

September was investor day heavy, with Bayer Crop Science in Iowa, Corteva and Vylor in New York, and FMC at the Jefferies Global Industrial Conference. Across all of it, there was a heavy emphasis on innovation and the question: where does your next differentiated product come from, and how much control do you have over access to it?

The backdrop also includes the structural dynamics within the industry. Corteva split seed from crop protection on October 1st, BASF is targeting an IPO of Agricultural Solutions mid-2027, and Syngenta has filed for a Hong Kong IPO, while UPL has also changed their structure and is looking to spin out seed.

As I covered in the September 20th edition, capital structure defines time horizons, risk tolerance, product focus and what behavior gets rewarded internally, and that eventually flows into what a farmer is offered and how they get served.

Within that backdrop, two threads stood out.

a. Crop protection companies are increasingly partnering for their pipelines.

This isn’t entirely new, but I would suggest it is more publicly emphasized by major crop protection companies as of late, specifically at events in September.

At a Jefferies conference, FMC CEO Pierre Brondeau said:

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“I think we have to learn to cooperate. I think there is nothing wrong to take a product which is in your development pipeline. You’re a few years away from taking that commercial and you partner with a Bayer, with a BASF, with a Corteva, with a Kumiai, with a Sumitomo, to accelerate the process and bring those to the market.”

Full Breakdown of the FMC Event here: Highlights and Analysis from FMC Appearance at Jeffries Global Industrial Conference

The new Corteva is planning to operate in a similar way. The Globachem joint venture pairs late-pipeline and commercial-stage technology from both companies with Globachem’s formulation and registration capabilities, and at its Investor Day Corteva shared three external innovation channels for their business: in-licensing (Rimisoxafen from FMC is an example), out-licensing (two actives that did not clear hurdle rates were out-licensed, and two more went to animal health), and Corteva Catalyst, which has invested $93 million across 8 companies since 2023, bringing innovation to them that they can apply their commercial capabilities and market access to.

Vylor is similar on the seed side, going from licensee to licensor. Chuck Magro called Vylor as “a technology platform built on genetics, powered by AI and monetized through IP,” with targets of $500 million in gross licensing income in 2027, $1 billion by 2035 and approaching $2 billion by 2040 (Vylor 2026 Investor Day Highlights and Analysis). Add Vylor Edge, the new Rainbow Crops collaboration on AI-guided multiplex gene editing, and Magro’s comment that Vylor is licensing its gene editing platform to anyone who wants to use it.

Then we can factor the Nufarm Investor Day where they emphasized the same:

b. Retailers are positioning to be a channel innovation runs through.

In Proprietary Product Strategy Is Evolving: Are You Ready?, I suggested that the biggest driver of proprietary brands moving forward is not off-patent generics, it is control and optionality. This isn’t a new comment, companies have been moving this way for decades: 70% of the largest US ag retailers already have a proprietary brand and strategy, and roughly 24% of Nutrien’s retail gross margin across all product segments has come from proprietary products for about the last five years, with its crop protection and fertilizer proprietary products north of 30%.

What is changing is where innovation comes from and how it gets to market in the crop protection and seed world.

Chinese discovery companies like KingAgRoot (which just named the vertically integrated Sarabia Group its exclusive distributor in Paraguay), Japanese and Indian players, and biological startups all need a route to market, and increasingly that route can run through the retailer, as we have seen with Wilbur-Ellis and AgroSpheres, and Nutrien and Ascribe Bio. And as Bayer’s distribution changes with Simplot and WinField United showed in August, relying on a supplier for access is a risk of its own.

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2. Notable Numbers from the Month

Roughly two-thirds of VC deals fail to return capital, about 4% return 10x or more, and 0.4% return 50x or more. Ag has rarely had exits above ~$300 million. - Upstream Ag Professional, September 27th Edition
Bayer says 52,000 farmers make up 66% of the market in the United Sates. Other data shows there are only ~3,500 Midwest farmers running more than 2,500 acres - Bayer Investor Day
Vylor called short corn a niche of 10–15% of corn acres. Bayer is targeting 5M Preceon acres by 2030, 26 million by 2035 and 50 million by 2040 - Vylor Investor Day, Bayer Investor Day
Bayer is cutting in-house active ingredient production from 34% to 26%, moving more than 10 actives and precursors outside, mostly to China. Bayer is also dropping more than 200 product groups worth about €200M, with margins 10–15 points below its crop protection average from its portfolio.
FMC's Arc covers 13 million acres - Highlights and Analysis from FMC Appearance at Jeffries Global Industrial Conference
Per FarmDoc Daily, July 2026 US tractor sales were down 10.9% year over year (13.1% year to date), four-wheel-drive units were down 27% year to date, and dealer inventories have fallen 22.2% from the October 2022 peak to $5.62 billion.
AGCO said its dealers now complete 65% of work on farm (75% for leading dealers), while 2026 PTx revenue should be flat at ~$900 million with a 2029 target of $2 billion.
xFarm reaches more than 600,000 farms on 24 million hectares after its sixth acquisition.

3. Framework of the Month

The Proprietary Product Ladder

Most conversations about proprietary strategy in ag retail start and end with off-patent generics. I think about it as four tiers, where each tier builds on the one before it and each takes more capability to execute:

Most retailers need to start at Tier 1 and move up over time, but it is a mistake to view proprietary strategy solely as Tier 1. Value brands drive the beginning, while the tiers above are where differentiation and control increasingly will come from. It ties directly to this month’s theme: as manufacturers partner for their pipelines and discovery companies look for a route to market, the Exclusive and Systems tiers are where retailers can capture that innovation.

For the full breakdown, including what you need to enable proprietary execution, check out Proprietary Product Strategy Is Evolving: Are You Ready?.

4. Image of the Month

Share of farmers who prefer a digital channel, by journey stage (McKinsey Global Farmer Insights)

From the McKinsey Global Farmer Insights 2026 report: digital preference rose at every buying stage between 2024 and 2026, with the largest jump where farmers evaluate and compare products (22% to 36%).

It begs the question: If the farmer’s first source is increasingly no longer a person, what is the advisor’s role in the conversation that follows?

For the full breakdown, check out Considerations for the Advisor’s Role After GenAI, or the expanded version Influence Erosion: The Risk JD Brings to Ag Retail.