You couldn't blame Robb Fraley and his colleagues for thinking it's starting to look like déjá vu all over again. Like Yogi Berra, the former manager of the New York Yankees who popularized that phrase, Fraley may be beginning to get the feeling he and Monsanto have been at this juncture before.
Fraley, the company's executive vice president and chief technology officer, has become the public “face” of Monsanto's efforts to buy Delta and Pine Land Co., touching at least briefly on the acquisition in more than two dozen speeches the last few months.
The last time Fraley and Monsanto were this close to buying D&PL — 1998 — the company's rivals raised so many anti-trust objections that Monsanto called the sale off, prompting a lawsuit from Delta and Pine Land that dragged on for two years before being settled out of court.
Fraley, who brings the patience of a scientist to his position as the No. 3 man in the company, talks about the earlier, unsuccessful attempt to buy D&PL as if it were a mere bump in the road.
“As you know, we had attempted an acquisition of Delta and Pine Land several years ago that didn't quite work out,” he said in an interview at the company's Chesterfield research facility in St. Louis. “But cotton was still important to us, and when Stoneville became available we moved very quickly there.
“And now that things have changed to enable us to do the acquisition of Delta and Pine Land, we feel very strongly about it because we believe that cotton is one of our core strategic crops, and, as a company, we want to be both a player and a partner in cotton.”
Obviously, Monsanto thinks it can make money on the $1.5 billion it reportedly has offered to pay for Delta and Pine Land, but Fraley says the acquisition would provide tangible benefits for cotton producers, as well.
He says Monsanto has several new biotechnology traits in its pipeline that he believes will reach the cotton marketplace “better and faster” if the 100-plus-year-old Delta and Pine Land is a part of Monsanto.
“Over the years we've had a good relationship with Delta and Pine Land,” he said. “It got a little tense after the failed acquisition, but we were clearly able to successfully bring technologies like Bollgard and Roundup Ready into the marketplace together. We believe you can always do it better and faster when you're completely linked together.
“We feel that by having Delta and Pine Land as part of Monsanto we'll be able to do a better job, for example, of bringing the drought-tolerant cotton that we just saw up in the greenhouse to the marketplace.” (Monsanto is conducting early testing on cotton containing a gene that helps the plant use water more efficiently.)
Other traits under development: a gene that makes cotton tolerant to dicamba (Clarity, Oracle) herbicide; genes that control stink bug, lygus and other “piercing, sucking” insects and genes that may be effective against some classes of nematodes.
“The trait we're developing for dicamba tolerance ultimately will be combined with our Roundup Ready technology,” he said. “I think that will provide growers with a much more durable weed control and with new options for tough-to-control broadleaves, perennials and some of the weeds that have become resistant to glyphosate.”
Fraley says the company's experience with sequencing the genes of corn and soybeans for its Asgrow and DeKalb brands could provide a model for what cotton farmers can expect if the Delta and Pine purchase is approved this summer.
Over the last six years, Monsanto has spent thousands of hours sequencing the 44,000 genes in corn. “In addition to sequencing all the genes, we've now been able to map thousands of gene traits and their position and location in the corn genome,” says Fraley.
“So today our breeders can use a DNA marker and know that that marker will identify genes for root strength or for oil composition or for grain dryness or starch content or protein content or oil content or other characteristics.”
Mapping the corn genome means Monsanto scientists can breed new varieties with greater precision and bring more new combinations of traits together than was possible before.
“My head breeder, Ted Crosby, says using these tools is like having someone turn the light on, said Fraley. “Literally, a breeder today has a printout of the mapped genes. If he is going to cross two lines, he or she will have the genetic map of both of those corn plants.
“When they make the cross, they will take a DNA sample from the young seedlings and pick the individual that has the precise combination of the two sets of genes they actually want. They can map hundreds of genes and bring together combinations that you never would have been able to do through a traditional breeding approach.”
Those tools will drive increases in cotton yields at a much faster clip, says Fraley. In corn, which has enjoyed a “robust” rate of yield increase of about a percent and a half a year, the new tools are doubling and tripling that rate of gain.
“We think these tools will be very useful in cotton for increasing yields,” he said. “It's these kind of tools that we need to address some very complex, difficult-to-breed-for traits like fiber quality.”
Fraley cited work Monsanto has done in soybeans as an example. Monsanto scientists have mapped, tagged and sequenced most of the major genes involved in producing the oil in the soybean plant.
“As a result, we've been able to use these tools to literally change the kind of oil soybean produces,” he said. “We've changed the amount of linolenic acid in the Vistive soybean, for example, so that it basically produces a trans-fat free oil. In a few years, we will produce a soybean with no saturated fats.
“For all practical purposes, the oil this soybean will produce will be olive oil in terms of its health and nutrition properties. That's only possible by using marker and mapping tools that allow you to bring together unique combinations of genes that would never have been possible with traditional breeding.”
Those same tools can allow Monsanto and Delta and Pine Land to breed varieties with greatly improved fiber quality. “That's important because we've gone from producing cotton for a domestic market to shipping much of our cotton to India or China,” he said. “And it's critical for the U.S. cotton producer, much as it is with the U.S. corn and soybean producer, to be able to compete with technology and not necessarily with the lowest cost producer.”
Fraley said he was able to sell the Monsanto board on trying to buy Delta and Pine Land again because of the promise of the biotechnology tools the company has developed.
“You could say we've made a pretty big bet in cotton with a billion-and-a-half-dollar acquisition at a time when the cotton market has a lot of instability,” he said. “But we feel very strongly that cotton is strategic to us, and we have tools that can make a difference in the long run because we've seen how those tools can impact other crops.”
Monsanto, which has been credited with turning around the fortunes of both of its corn and soybean subsidiaries, believes it could apply the same knowledge to making Delta and Pine Land a more formidable competitor.
“What's benefited the corn and soybean grower has been a large amount of research and development investment and tremendous gains in productivity,” says Fraley. “To put this in perspective, the average corn yield for the United States today is 150 bushels. Twenty-five years ago, it was half that. We think these technologies in corn will allow us to double that yield again in 25 years.
“What the cotton grower needs is for us to be thinking about how we can put all these tools to bear in cotton so that in the next 25 years we're doubling productivity. And, if we do that, we will be successful competing in a global business.”
The prospects that Delta and Pine Land could emerge from the acquisition as an even stronger company worry some cotton producers and Monsanto's competitors, especially those, such as Syngenta and DuPont, who have technology agreements with Delta and Pine Land.
Delta and Pine Land has been working with Syngenta to insert the latter's VIPcot gene (for vegetable insecticidal protein) into Deltapine varieties. The agreement with DuPont covers its Optimum GAT herbicide tolerance gene. Monsanto has promised to honor all existing agreements.
Analysts say the Delta and Pine Land acquisition could give Monsanto control of 85 percent of the cottonseed business in the United States. But that includes business from the Stoneville unit, which Monsanto has promised to sell, simultaneously with the closing of the Delta and Pine Land purchase.
Fraley believes the key to success in cotton is more research and development investment to be able to sequence the cotton genome and map the genes in cotton and to launch the next five to seven traits Monsanto has in its pipeline.
“To do that will take a significant investment in cotton, and, as a company, we're prepared to do that,” he notes. “And, importantly, if we do that, and we raise the bar, it will cause others to do the same thing.”
He believes Delta and Pine Land already has “a lot of strong competition in cotton. We've seen the tremendous success Bayer has had with its FiberMax varieties. Clearly, Dow has made a number of investments in new varieties and seed products.
“There's competition in cotton. What cotton needs is more investment.”