LEVERKUSEN, GER & ST. LOUIS, MO – Third time is the charm for Bayer and Monsanto, as the companies announced today that they have finally signed their long-awaited definitive agreement to merge. Bayer will acquire Monsanto for $128 USD per share, an offer up $0.50 a share from its last. Combined with its debt acquisition in the company, Bayer will be purchasing Monsanto for $66 billion USD. 

"We are pleased to announce the combination of our two great organizations. This represents a major step forward for our Crop Science business and reinforces Bayer’s leadership position as a global innovation driven Life Science company with leadership positions in its core segments, delivering substantial value to shareholders, our customers, employees, and society at large," said Werner Baumann, CEO of Bayer AG.

The companies stated in a press release that the per share all-cash transaction is a 44 percent premium to shareholders, based on Monsanto’s closing share price as reported on the day before Bayer’s first written proposal on May 9, 2016. Combined with the debt which Bayer will also acquire through the deal, CNN is calling the agreement the biggest takeover of the year.

“Today’s announcement is a testament to everything we’ve achieved and the value that we have created for our stakeholders at Monsanto. We believe that this combination with Bayer represents the most compelling value for our shareowners, with the most certainty through the all-cash consideration,” said Hugh Grant, Chairman and Chief Executive Officer of Monsanto. 

Bayer and Monsanto stated that the merger will benefit from Monsanto’s platforms for Seeds & Traits and Climate Corporation, with Bayer’s broad Crop Protection product line contributing to the comprehensive range that the deal will encompass. From the merger, stated the companies, growers “will benefit from a broad set of solutions to meet their current and future needs, including enhanced solutions in seed and traits, digital agriculture, and crop protection.” 

As sources throughout the industry and beyond debate the impending merger and its impact, both Bayer and Monsanto asserted that the merger will create significant value with expected synergies from the companies to reach $1.5 billion USD after three years. The companies also intend to invest in innovation by allotting themselves a research and development budget of EUR 2.5 billion.

So what trials are in store now for the merger’s pending finalities? The merger deal, though signed in agreement between the companies, must now pass through international regulations in order for the deal to finalize. 

The Wall Street Journal reported that Baumann stated Bayer would voluntarily file for the merger to be reviewed by the Committee on Foreign Investment in the U.S., and that he saw no hangups to come from a national security review. Grant stated, according to Reuters, that the companies will need to file in approximately 30 jurisdictions for the merger to clear. 

The deal, should it be approved by regulators, is aimed to close at the end of next year. WSJ stated the companies acknowledged there is overlap between the two entities, which could create later challenges for passing regulations. Bayer agreed to pay Monsanto a $2 billion fee should the deal fall through. 

Prior to the announcement that the deal had be signed, Monsanto's stock was flat and trading below the prospective offer price from Bayer. CNN stated that this could reflect investors doubts that the deal will go through.

Monsanto’s Board of Directors, Bayer’s Board of Management, along with Bayer’s Supervisory Board, all approved the agreement. At this time, there is no word on what the merged companies would be named.

Will international regulators approve the deal? Or will Bayer and Monsanto remain separate entities? AndNowUKnow will keep you updated as the story unfolds further. 

Bayer Monsanto 

CALIFORNIA - It seems that the NOAA has joined the ranks of those no longer expecting a La Niña winter. It has canceled its watch for the seasonal pattern that was in place the last several months.

Typically peaking between December and February, La Niña is associated with dry winter conditions that would deter any progress the West Coast might have made during the El Niño events of last winter.

As we reported previously, the Climate Prediction Center (CPC), a subsect of the National Weather Service, released a monthly forecast also predicting La Niña is no longer likely to occur, despite last month’s statement that La Niña conditions were favored to occur with a 55-60 percent chance.

Those have slipped down to the 40 percent level, according to The Weather Channel, leaving room for the possibility but removing any expectations.

In an interesting turn, the anomaly brewing off the West Coast, fondly known as The Blob, could be a contributing factor shielding California from La Niña conditions.

“These are really strong anomalies,” Art Miller, Head of the Ocean and Atmosphere section at UC San Diego’s Scripps Institution of Oceanography, told the San Diego Union Tribune. “They’re far larger and more persistent and spread out over larger areas than we think we’ve ever experienced.”

La Niña conditions brew when temperatures in the ocean cool, opposite of the warming brought on by El Niño. The Blob, as we’ve reported in the past, brings temperatures 2 to 3 degrees Celsius above average, which could be preventing La Niña conditions.

So what’s in store for us this winter? Despite predictions of much needed moisture from the Farmers Almanac, it is still too soon to tell.

“El Niño was a dud for Southern California rainfall, so maybe a wannabe or puny La Niña could deliver a much needed wet winter,” Bill Patzert, Climatologist with NASA’s Jet Propulsion Laboratory, said.

As we continue to look toward possible drought reprieve, and measures taken in its place, keep checking in with AndNowUKnow for all the latest in weather and other industry influencers.

WASHINGTON, D.C. – In efforts to provide the organic industry with a valuable resource for American exporters and importers of organic industry members, the Organic Trade Association (OTA) has unveiled a new and enhanced International Organic Trade Resource Guide.

“Around the world, the desire for traceable, sustainably produced food is growing, and global demand for U.S. organic has never been stronger,” said Laura Batcha, CEO and Executive Director. “One of OTA’s most important missions is to promote organic, and part of that mission is helping to connect U.S. farmers, ranchers, and businesses with international buyers that are eager to bring the USDA Organic seal to their market. The better the set of data that organic businesses have to work with, the better able they are to connect with those global buyers and to compete on the world market.” 

The resource guide, accessible here, is an online resource available to the industry for free, and encompasses the most comprehensive and up-to-date market, policy, and trade information for global organic markets. According to a press release, the Guide includes in-depth information for 40 countries and 38 trade regions with the following:

• Key marketing and policy data for each region
• Latest data on a country’s organic regulations and standards
• Special requirements for imported organic products
• Certification information
• Contact connections for government agencies

The guide also hosts an interactive map that allows users to pick a country and quickly understand the growth and demand for its organic products, top retailers and brands, and consumer demographics in the respective markets. 

The company stated that this information will allow exporters to strategize for success and compare high opportunities with consistent data points across different regions. This information will be beneficial to both businesses already participating in the international market, and those just beginning to enter. 

“The complex task of understanding foreign government regulations, along with the challenges of obtaining accurate information about a non-U.S. market and the difficulties in locating and connecting with buyers, are all frequently cited as barriers to organic exports,” said Monique Marez, Director of International Trade for OTA. “The new Global Organic Trade Resource Guide equips U.S. businesses with a baseline for success.” 

The new and enhanced guide will also contain specific pages for countries, which will expand on the following in addition to integrating relevant data and analysis from Euromonitor:

• Qualitative and quantitative market information
• Educational infographics
• Detailed and in-depth policy information
• Informative “Go to Market” reports

OTA stated that demand for the organic segment in the U.S. has grown, as shown through 2015 sales hitting a new record of $43.3 billion. U.S. organic exports in 2015 reached $3.2 billion, showing the growing organic international market as well. 

The U.S. has organic equivalency arrangements with Canada, the E.U., Japan, Taiwan, South Korea, and Switzerland, to allow organic products that are certified in one country to be labeled and sold as such in other countries without further inspections or authorizations, according to OTA; which could potentially impact the organic integrity of the products. 

The upgrade for this resource was provided by the U.S. Department of Agriculture’s Market Access Program, and the department’s Technical Assistance for Specialty Crops program.

OTA has worked since the mid-1990s to promote organic agricultural products in global markets, and to connect buyers and sellers. OTA’s membership represents around 85 percent of U.S. organic exports, according to the company, and offers its market promotion activities to the entire organic industry. Since 1999, OTA has been an official cooperator in USDA’s Market Access Program.

Organic Trade Association

SALINAS, CA - With the market holding steady, and potential for a tight season upcoming, the spinach category is cultivating good volume and quality on the West Coast with a couple months left until region's transition.

As Brittany Trebino, Spinach Commodity Manager at Ippolito International, recently told me, the company is past its halfway point in the season with harvests occurring right on schedule.

“The Salinas season has been very good to us so far,” Brittany says of the company’s current program. “Our yields have been great, and right on track.”

Brittany says that weather this year has provided for the plentiful harvests, with only minimal mildew, which she says is typical of the Salinas season for the category. Industry wide, spinach saw slow growth initially due to mild weather, but has now picked up production to resume a normal schedule of harvesting dates.

“The market right now is ranging from $9.50-11.50, with good demand and movement,” Brittany tells me of the currently steady market. “With a lot of the East Coast growing regions and homegrown programs nearing a close, we can also expect to see a spike in demand as business moves back this way.”

Brittany says that the market could potentially tighten as these regions and programs wind down their production, opening up further supply opportunities for the category. Ippolito International expects its Salinas production to run through November.

Ippolito International is continuing its growth for the category with an increase in production planned for the year. “We are expecting about a 10-15% growth on our program from last year. From what I gather, it seems other shippers in the industry are experiencing moderate growth on spinach as well.”

The company is capitalizing on consumer demand and the blossoming segment by offering a variety of spinach packs such as wire bounds, RPCs, totes, and a value-added spinach program

Ippolito International is also shipping its spinach to Canada, with projections for this international demand to pick up as the region’s homegrown season will be winding down soon.

As spinach production prepares to shift regions across the nation, stick with AndNowUKnow for the latest on the state of the market.

Ippolito International

WASHINGTON, DC - The U.S. Department of Agriculture (USDA) has filed an administrative complaint under the Perishable Agricultural Commodities Act (PACA) against G K Produce Inc. According to a USDA press release, the Pennsylvania-based company allegedly failed to make payment to eight produce sellers in the amount of $548,441, from November 2013 through March 2014.

G K Produce Inc. will have an opportunity to request a hearing, and should USDA find that the firm committed repeated and flagrant violations, it would be barred from the produce industry for two years. Furthermore, its principals could not be employed by or affiliated with any PACA licensee for one year and then only with the posting of a USDA-approved surety bond. No principles were listed in the USDA release.

The Agricultural Marketing Service (AMS), PACA Division, regulates fair trading practices of produce companies operating subject to PACA, including buyers, sellers, commission merchants, dealers, and brokers within the fruit and vegetable industry. Under PACA, all interstate traders in fresh and frozen fruits and vegetables must be licensed by USDA, which is authorized to suspend or revoke a trader’s license for violating the act.

In the past three years, USDA resolved approximately 3,700 PACA claims involving more than $66 million. Its experts also assisted more than 7,100 callers with issues valued at approximately $100 million. These are just two examples of how USDA continues to support the fruit and vegetable industry.

Agricultural Marketing Service

IRWINDALE, CA – In a move to lend a helping hand to those affected by the recent flooding in Louisiana, Ready Pac Foods has graciously donated 30,000 of its freshly-made Bistro® Salad Bowls to the relief effort. The complete meal salads with protein will be distributed by the American Red Cross Disaster Relief teams in the region over the next two weeks. 

“We saw the suffering and knew we had to do something to lend a hand,” explained Tony Sarsam, Ready Pac Foods’ Chief Executive Officer, about the reason behind the large charitable donation.

Ready Pac Foods, who has recently penned a new business partnership with Domino’s to provide fresh salads, donated more than 7,000 of those branded salads within the region through the American Red Cross as well.

“We hope that this care package will provide a little comfort during this difficult time, and we continue to send our thoughts and prayers to those affected by the devastating floods,” Sarsam added.

In its company press release, Ready Pac Foods urged both customers and associates who wish to help to text “LAFLOODS” to 90999, thereby donating $10 to American Red Cross Disaster Relief. Those interested in helping can also visit the American Red Cross website at www.redcross.org to learn more.

Ready Pac Foods

SUNBURY, PA - The Weis Markets banner is about to multiply significantly, growing its store count by 25% as it begins the conversion of its recently acquired 38 Food Lion stores.

"Once the conversions are completed over the next two months, we will have nearly doubled our Maryland store count and expanded into Virginia and Delaware," Kurt Schertle, Chief Operating Officer of Weis Markets, stated, according to news source Virginia Business.

As we previously reported, Weis made its biggest purchase of the year when it acquired the nearly 40 Food Lion locations in three separate states back in July.

The Food Lion stores were up for sale as Ahold and The Delhaize Group look to appease the FTC and obtain the go-ahead for a $28 billion merger.

Now, the 4 Delaware, 21 Maryland, and 13 Virginia stores are expected to be wearing the Weis name by the end of October.

Additionally, the retail chain plans to hire more than 2,000 current Food Lion employees to staff the converted stores, according to the report.

This is the most recent in moves made by the company for strategic growth, which also finished converting five Maryland Mars Super Markets last month.

Upon completion of those 38 locations, Weis will be an operation spanning seven states with 204 stores in total.

AndNowUKnow will continue to report on major strides the retailer makes in its reach, as well as others in the market, throughout the rest of the year and beyond.

Weis Markets

BAY AREA, CA - California’s Bay Area is continuing to be a testing ground for retailers expanding their reach. Safeway has announced that it will be opening three new stores tomorrow in the increasingly competitive market.

"We are excited to open three new stores to meet the needs of customers and create new jobs in the Bay Area," said Tom Schwilke, President of Safeway Northern California, in a statement. "These new stores will give customers new local, fresh and organic options."

The three new stores will be opening in the following locations:

• Fairmont Shopping Center at 709 Hickey Blvd. in Pacifica
• Ridge Shopping Center at 5100 Broadway in Oakland
• The Orchards at 2800 Ygnacio Valley Blvd. in Walnut Creek

While details on the size of the other two stores have not been released, the Walnut Creek location will be 55,000-square-feet.

With competition ramping up from healthy and locally-focused chains like Nugget Markets and Whole Foods, Safeway has decided it will highlight its locally-grown products with designated tags throughout the store, according to the East Bay Times. The source reports that Safeway is partnering with Cal-Organic Farms, and will also carry popular local brands like Clover Stornetta Dairy Farms, Three Twins Ice Cream, and Rocky Chicken.

The stores will also offer a grocery delivery program to rival e-commerce services like those form Walmart, Amazon, and Instacart.

"We continuously evaluate and invest in areas where there's an opportunity to improve or expand our operations," Safeway’s Senior Communications and Government Relations Manager, Wendy Gutshall, told the San Francisco Business Times.

Will Safeway be able to take a healthy chunk out of the Bay Area’s retail money machine? AndNowUKnow will keep our eyes on the scene for updates.

Safeway

ORLANDO, FL - The USDA’s Agriculture Secretary, Tom J. Vilsack, appointed six members to the National Mango Board beginning January 1, 2017.

“We would like to thank the NMB members that will be completing their term this year for serving on the board and for representing the mango industry,” Manuel Michel, Executive Director of the NMB, said in a press release. “The knowledge and expertise they bring to the NMB truly makes a difference and drives the success and growth of our industry.”

Members who have completed their terms on the board for their service to the mango industry included Jorge Perez of Sinaloa, Mexico; Reynaldo Hilbck of Piura, Peru; Altamir Martins of Fortaleza, Brazil; and Sergio Palala of San Carlos, CA.

“The NMB also extends a welcome to those members who have just been appointed to serve on the board during the 2017-2019 term,” Michel said.

The appointees include four new members and two returning members. Both importers and foreign producers were appointed, including:

• Chris Ciruli of Tubac, AZ (Importer)
• Jiovani Guevara of C.H. Robinson, Phoenix, AZ (Importer)
• Marsela Mcgrane-Vogel of San Pedro, CA
• Norberto Galvan of Tapachula, Mexico (Foreign Producer)
• Joaquin Balarezo of Piura, Peru (Foreign Producer)
• Eddy Martinez of Guatemala City, Guatemala (Foreign Producer)

The NMB noted that both Mr. Ciruli, COO of Ciruli Brothers, and Mr. Guevara, Global Grower Development Manager at C.H. Robinson, are returning to the board to serve a second consecutive term.

In regards to the new members appointed to serve, Michel continued, “We look forward to working with them to develop new strategies and projects that will continue to support the industry and increase mango awareness and consumption.”

Having each been appointed to a three-year-long term with the NMB, the new members’ terms will close on December 31, 2019.

National Mango Board

WENATCHEE, WA - “The way we grow apples is not just about those one or two new varieties you hear about in the trade,” Roger Pepperl, Director of Marketing for Stemilt Growers, tells me as we discuss the company’s new program Inspiration Orchard^TM. “It is about those anchors to your program that actually change the category. This program is about being consumer driven and adapting a new perspective on apple growing and marketing.”

Roger has a strong knack for marketing and perceiving the nuances in the produce game. Between his time at Stemilt and his years spent as a buyer for Meijer, he brings a unique perspective that allows him to listen, and respond, to the changing consumer landscape.  

So, what is Inspiration Orchard^TM and what is the vision behind the program? Roger breaks it down for me. 

“The concept behind Inspiration Orchard^TM is not to brand a product, but to brand a program,” Roger says. “And not only at retail, but also in the orchard, in the field, in our facilities, and in the conversations that our ownership has about the program.”

Through internal, trade, and consumer branding, Stemilt is seeking to bring apple-lovers, and buyers, into the Inspiration Orchard^TM fold. With the Inspiration Orchard^TM tagline, “Where Flavors Grow,” Stemilt President and fifth generation grower West Mathison is rallying the company and fueling the quest to grow apples that are not only crisp and juicy, but full of flavors that deliver a unique and unforgettable eating experience.

While Inspiration Orchard^TM is not a physical orchard, the concept itself creates its own geography as a vision. This is a place “Where Flavors Grow,” because of an integration of the ground, locations, horticulturalists, varieties, and root stock. 

“We say that our journey is an endless journey to a consumer driven place,” Roger adds. “We have combined the signature apples within our program along with exclusive, and new varieties, to raise the bar on how we define flavor within the apple category - and to change it.”

The line-up for Inspiration Orchard^TM features an amazing selection of Stemilt’s portfolio. Take the Piñata^®. A cross of three heirloom apples – Golden Delicious, Cox’s Orange Pippin and Duchess of Oldenburg- the apple presents full red to striped-red coloring, over a yellow-orange background and a crisp and juicy, eating experience with a tropical flavor twist.

With fall spices and vibrant acidity, the SweeTango^® brand Minneiska cultivar apple is the successor to the popular Honeycrisp apple variety. Part Honeycrisp, part Zestar, the SweeTango has larger cells than many apples, so it shatters when bitten, making for a unique sweet crunch and a way for Stemilt to differentiate its program. 

Stemilt has also folded the Pink Lady apple underneath Inspiration Orchard^TM as the variety excels as one of the fastest growing apples in the category. Stemilt was one of the founding members of the Pink Lady program in the U.S. and now competes as one of the largest growers of the variety. Stemilt farms some of the most strategic locations and horticultural-superior orchards of Pink Lady apples to be found anywhere. Stemilt’s farming history with Pink Lady has created a superior product in both flavor, texture, and appearance.  A cross between a Golden Delicious and Lady Williams variety, Pink Lady apples are very firm and dense, with a tart flavor and effervescent finish. 

On the horizon is a new trademarked Honeycrisp program called Honeyhill™ which is focused on delivering to the consumer, a great eating experience every time.  

“There is a need and a demand to bring better quality Honeycrisp apples from later winter into the summer. The problem is that with traditional Honeycrisp varieties, acids and pack-outs are diminished as they hold later into the season,” Roger tells me. “We found the Royal Red variety that offered a solution to the diminished quality in late season Honeycrisp apples. This new apple colors incredibly well while maintaining good starch reserves for targeted storage room openings which allows you to offer a better tasting Honeycrisp experience throughout the late season. With our new plantings, we can take the traditional standard strain of Honeycrisp apples and sell those in the fall and winter when they are excellent, and then round out the program with the Royal Red variety in the spring and summer months.” 

On top of all of these advances, West Mathison and his Stemilt team have also spent endless hours developing a controlled atmosphere storage program together with horticultural techniques in the orchard to create a season long program that will always delight taste buds. That is what the new program called Honeyhill™ stands for. 

In addition to the latest in Honeycrisp cultivars, is the introduction the Aztec variety, a new strain of Fuji apples that Stemilt has pioneered to offer premium-quality Fuji apples year-round. This fruit can be harvested at full color and yet can choose the starch reserves that Stemilt needs to deliver a year-round consistent profile. 

And these are just a handful of the coveted and the new apple varieties powering the vision behind Inspiration Orchard^TM. 

Stemilt has long been known for its progress through brand innovation with a family of products to address the demands of changing consumer demographics, and the evolution does not stop here. 

“Consumers want consistent flavor, and while that is a pillar of the program, what we really want to is to create a new standard for the apple eating experience,” Roger tells me.

With the goal of delivering the best apples in the industry, we are intently waiting to watch how this new program takes off and to experience Inspiration Orchard^TM “Where Flavors Grow.”  

Stemilt Growers