READ the NAFB’s National Ag News for Tuesday, May 24th…

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Bayer/Monsanto Merger Deal is Imminent

German pharmaceutical giant Bayer and Monsanto are on the edge of agreeing to a merger deal that would create the world’s largest seed company if it’s completed. The Fox Business Network says bankers with knowledge of the matter say the deal could be made public in the next 24-48 hours, barring any unexpected setbacks. Bayer said the potential acquisition is an all-cash offer of 62 billion dollars. These bankers also told Fox the deal is not complete yet, and an unexpected hitch could delay the timing or kill the transaction. Earlier this month, Monsanto said it had received an unsolicited and non-binding proposal from Bayer for the potential acquisition of Monsanto, and the company is reviewing the deal. If the two companies merge, the combination could be worth 44 billion dollars and give Bayer a large footprint in the genetically modified crop business. Monsanto shares gained 8 percent since the deal was announced.

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Legislation Introduced to Set Food Labeling Standards

Congressional legislation introduced on Wednesday aims to help consumers understand if their food is safe to eat. According to the Washington Post, the legislation is known as the Food Date Labeling Act and was introduced by Senator Richard Blumenthal (D-Conn.) and Representative Chellie Pingree (D-Maine). The Food Date Labeling Act proposes standardized language for retail packaging. “Best if used by” will indicate peak quality for shelf-stable foods, and “expires on” for riskier foods like raw meat, fish, and eggs. Previously, retail language wasn’t specified on a national level, leaving states to develop their own label regulations, which were sometimes confusing. Some labels were meant to indicate when food could no longer be safely eaten, and some when food wouldn’t taste as good but was still edible. Consumer confusion led to throwing out food which may have still been safe to eat. If the bill passes, companies would have two years to comply with the requirements.

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John Deere Tightens Leasing Terms

Deere and Company announced it’s tightened conditions for equipment leasing as lower farm incomes are leading farmers to lease rather than purchase equipment. The Dow Jones reports that the fall in worldwide commodity prices has eaten into Deere’s sales and profits for nine straight quarters. The farm and construction machinery market slump has affected Deere’s customer finance arm. Leases now account for a growing volume of business, forcing the company to tighten the terms for renting equipment that has rapidly depreciated in value. Leases make up a quarter of the company’s financing deals, compared with 15 percent in recent years. As Deere has stepped up its leasing activity in recent years, its finance unit and dealers are left with more used equipment as producers walk away when their lease expires. Deere said it’s restructuring leases to share more of the risk of further declines with its dealers.

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Monsanto Issues Statement on Glyphosate Renewal in EU

The European Union member states recently delayed a vote on the renewal of glyphosate. Monsanto said the EU’s risk assessment on glyphosate has been one of the most thorough reviews of an agricultural product ever conducted. The risk assessment conducted by Germany and reviewed by the European Food Safety Agency included more than 90,000 pages of data. It also had 353 reports that hadn’t been reviewed previously by the EU. Monsanto feels the assessment considered the best available science and found no evidence of unreasonable risk. In addition, the joint WHO/FAO meeting on pesticide residues again reaffirmed that glyphosate is unlikely to pose a carcinogenic risk to humans exposed through their diets. Monsanto said further delay in the renewal is unwarranted and puts European farmers and the Ag industry at a disadvantage. The company is urging swift and full renewal of glyphosate by the EU member states.

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Ag Appropriations Bill Hits Senate Floor in June

The fiscal year 2017 Ag Appropriations Bill will likely hit the Senate floor in June. The Hagstrom Report said that update came from Kansas Republican Senator Jerry Moran, who chairs the Senate Ag Appropriations Subcommittee. After the subcommittee approved the bill, Moran said he expects it to be the second measure considered in June after the Senate returns from its Memorial Day recess. The full Senate Appropriations Committee amended and approved the bill last Thursday. 

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Bayer Shareholders in Uproar Over Monsanto Bid

Bayer’s takeover offer to Monsanto had investors in an uproar on Friday. Reuters said the German company’s top shareholders were calling it “arrogant empire building.” Investors were nursing an 8.2 percent drop in Bayer’s share price on Friday after the bid announcement came out the day before. John Benett of Henderson Global Investors called it an “immediate destruction” of shareholder value. US seeds giant Monsanto said Thursday that Bayer had made an unsolicited takeover proposal of 62 billion dollars, in order to create the largest agricultural supplier in the world. Bayer’s shares did rebound slightly on Friday. Bayer had no comment on the investor backlash. Bennett said investor discontent seems to be mostly targeted at the sheer size of the proposed deal. One investment fund manager in Germany feared the size of the deal would stretch Bayer’s finances too much.

SOURCE: NAFB News Service

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