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Published March 31, 2014, 09:25 AM

Dow seeks growth with seed and chemicals

INDIANAPOLIS — Dan Kittle has spent more than a decade waiting for this day. As the man in charge of research and development at Dow AgroSciences, the unit of Dow Chemical Co. that develops agricultural seeds and pesticides, Kittle remembers the “big shock” when rival Monsanto Co. unveiled a genetically modified seed in 1996, designed to be used in combination with a specific herbicide, a combination that rapidly led Monsanto to riches.

By: Carey Gillam, Reuters

INDIANAPOLIS — Dan Kittle has spent more than a decade waiting for this day.

As the man in charge of research and development at Dow AgroSciences, the unit of Dow Chemical Co. that develops agricultural seeds and pesticides, Kittle remembers the “big shock” when rival Monsanto Co. unveiled a genetically modified seed in 1996, designed to be used in combination with a specific herbicide, a combination that rapidly led Monsanto to riches.

Since then, Monsanto has become the world’s largest seed company with $15 billion in annual sales, up roughly 200 percent from a decade ago, and Kittle and a team of Dow researchers have been working to catch up.

In that quest, Dow has increased research and development spending 75 percent, expanded greenhouse space, also by 75 percent, and made 14 acquisitions since 2007.

With a string of new crop and chemical products in its pipeline, the company projects it will double revenues over the next five to seven years. For 2013, sales totaled $7.1 billion.

One key to Dow’s rise in the agriculture seed and chemical kingdom is the company’s new GMO seed and herbicide combination branded the “Enlist Weed Control System.”

“Enlist is the most important release we’ve had,” Kittle says.

Dow pegs the market opportunity for Enlist at about $1 billion. It plans to offer Enlist corn and soybeans, the two most widely planted U.S. crops, next year in concert with Dow’s Enlist Duo herbicide, which the crops are engineered to tolerate.

“We are moving ahead, assuming we will have regulatory approvals,” says Tim Hassinger, vice president of Dow crop protection. “We feel very good.”

Enlist is aimed at replacing Monsanto’s biotech “Roundup Ready” crops, which make up roughly 90 percent of U.S. corn and soybean plantings every spring. Dow is currently a small player in both, with an estimated market share in U.S. soybean seed of about 2 percent and a 4 percent share in corn.

Monsanto’s Roundup Ready cropping system has dominated U.S. agriculture because it is easy to use. Farmers can spray Roundup herbicide directly on top of their crops, then watch the weeds die and the crops flourish, because a genetic alteration makes the crops impervious to the weedkiller.

But heavy use of Roundup has triggered an explosion of herbicide-resistant “superweeds” that farmers have found hard to fight.

Rocky road

Dow and its competitors have been racing to come up with a replacement crop and chemical combination. Monsanto is also developing a new biotech cropping system, and Monsanto spokeswoman Gayla Daugherty says Dow’s advancement through the regulatory system is “good news for ag technology.”

While Dow is poised to be the first to garner regulatory approval, Monsanto hopes to be next in line.

Tough competition is only one of many hurdles Dow has faced. Even though Enlist combines a 60-year-old herbicide component known as 2,4-D that is found in hundreds of commonly used lawn care products, with glyphosate, the chief ingredient in long-used Roundup, the new herbicide has many critics.

The component 2,4-D has a reputation for drifting easily through the air and sometimes kills not just weeds but also crops beyond the fields where it is sprayed.

Also, 2,4-D was one of the ingredients in the Agent Orange defoliant used in the Vietnam War that later was linked to illnesses in soldiers and Vietnamese civilians.

Opponents, citing US. Department of Agriculture estimates for a dramatic increase in the use of 2,4-D, say they fear potential health and environmental problems stemming from increased herbicide pollution in soil, air and waterways.

USDA estimates that the use of 2,4-D will rise 74 percent, even without Enlist, to 44.5 million pounds by 2020, up from 25.6 million pounds in 2011. If Enlist is approved, USDA says usage could rise to 176 million pounds by 2020.

“The admission that 2,4-D use will increase that much is huge. That is the biggest thing,” says Bill Freese, a researcher with the Center for Food Safety, which opposes approval of Enlist.

Dow says research shows the Enlist system is safe if properly used, but critics argue that Dow has falsely made that claim in the past. Dow’s Dursban insecticide was a widely used household pesticide for decades until numerous health concerns led the Environmental Protection Agency to phase out certain uses in 2000 because of risks found with the active ingredient, chlorpyrifos.

The EPA is currently wrapping up its evaluation of the Enlist Duo herbicide. EPA spokeswoman Cathy Milbourn says the EPA final regulatory decision will be coordinated with the USDA’s final decision after both agencies review the public comments about Enlist.

Spray booth tests

Dow researchers acknowledge some past problems with 2,4-D. But they say Enlist is much improved, thanks to a new formulation that dramatically reduces the pesticide’s ability to drift off-site or travel through the air as vapor.

It has been no easy task. Researchers set up a high-tech laboratory “spray booth” where technicians have taken tens of thousands of measurements of droplets of 2,4-D to formulate a spray that is less able to drift on the wind.

Dow researchers also had the new 2,4-D tested in a state-of-the-art wind tunnel in Queensland, Australia, and measured air concentration levels over field tests.

“When we first started, we didn’t know if we could do this,” says Dow senior research scientist Steve Wilson. “But we’ve been at this for years. And we are where we need to be.”

Many farmer groups say they are eager for the new herbicide and crop combination.

“These new products like Enlist will help us address some of the weed resistance issues. It is something we need,” says Ray Gaesser, an Iowa corn and soybean farmer and president of the American Soybean Association, which has urged the USDA to approve Enlist.

Still, more hurdles lie ahead. Dow has not yet won China’s approval for import of Enlist crops, and Dow officials say they may go ahead with commercialization in the U. S., even without Chinese approval. Such an approach could jeopardize some U.S. grain sales to the world’s second-largest economy. A similar scenario involving a biotech corn developed by Syngenta has caused some shipments of U.S. corn to be rejected by Chinese importers.

There is also a possibility that weeds will become resistant to Enlist, as they have to Roundup.

Dow officials say they hope to extend Enlists’ longevity by encouraging farmers to also make use of other herbicides.

“The last thing we want to do is invest all this in Enlist and have resistance develop,” Hassinger says. “Enlist is going to be a key contributor to our growth.”

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