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Agribusiness value shift

Just back from visiting my colleagues at the Purdue University Center for Agri-Business, where I was teaching in a program on Strategic Decision Making. I always enjoy hearing what they are up to, because although agribusiness affects us all in many ways, most of us don’t have a clue how huge, commercialized and almost industrial this sector is. The world of seeds, for instance, has undergone a revolution since Monsanto’s introduction of Round Up (a weed killer) created the opportunity for genetically altered seeds called “Round Up Ready” that withstand the chemicals.What that means is that to keep a field weed-free without destroying the valuable crop, a farmer that has planted Round Up Ready seeds can just spray away. The business side of this shift is fascinating: instead of value in crop management flowing to the guys that make chemicals, the value now flows to the guys that make the sturdy seeds. This has completely changed the economics of the seed business in less than a decade, and driven phenomenal growth in the modified plants.

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