Corteva, Inc. ($CTVA)

All right. Our next fireside is going to be with Corteva. We have Chuck and we have David for a fireside chat. Please submit questions on the app. We're at a very interesting time for Corteva. They're expecting to split -- are going to split up later this year. The seed company is going to be Vylor. Corteva is going to be New Corteva and happy to have the team here.

So Chuck, Dave, why don't we maybe just do a state of the union, what's going on at Corteva and looking into the breakup later this year?

Okay. Well, hi, everyone. Nice to see you all. Hopefully, you're having a good conference. Let's start with the quarter. Overall, we were very pleased with the first quarter. We saw double-digit growth and growth basically across the board when it comes to both businesses, Crop Protection and Seed. And I'd say a pretty clean growth when it comes to price volume, we also have good mix improvement, lower costs. So overall, in almost every region of the world, we're seeing very good growth. We held our guide. I think that's important. We don't typically raise our guide in Q1, and we're feeling very comfortable at the $4.1 billion. I'd say the agricultural backdrop is still relatively mixed. Really good growth in demand when it comes to grains and oilseeds. Even for biofuels, which will be a record demand again in 2026 versus 2025 and 2025 was a record. So very good growth. Crop prices are up a little bit, which I think is helping farmer economics. And I'd say, generally speaking, most of the farmers that we're talking to are focused on maximizing productivity and yield. I did mention in the first quarter call that our top corn hybrids, for example, were completely sold out in the spring. So farmers are looking for technology to drive yield and productivity, which is what we would expect them to do. So I'd say the year is shaping up probably a little better than we thought. The first quarter doesn't make the year. The first half is really, really important. Our order book looks good for both seed and CP. So that is coming together pretty nicely. Shifting gears to the separation. I'd say everything is on track for a fourth quarter separation. And we've been pretty busy, as you saw some of the announcements. We filed the initial Form 10 with the SEC, which was a lot of effort. We announced the new CEO for New Corteva come October 1. Luke Kissam joined the company on June 1, and we announced the 2 executive leadership teams. Just this week, we announced the 2 headquarters, which I think is important for our employees to understand that. And then we announced the name of the seed business and the genetics company, and it's -- we're going to name the company Vylor. So we've been pretty active. But I'd say, so far, no showstoppers, things are looking good. The ag fundamentals are something we're keeping an eye on. And so far, the business is performing very, very well.

We'll work top next that. We'll work top down a bit. We're obviously in a very volatile environment. We've only seen crop prices start to move more recently, but encouraging. What's kind of your view on corn acres, costs in this environment?

Yes. So we actually saw the week of our earnings corn futures touched $5. And usually, there would be some bullishness in the market at $5. And of course, given the Middle East conflict that we're seeing with elevated energy pricing, we're seeing higher fertilizer and fuel pricing at the farm level. Now our view, as I mentioned already, is that farmers have seen this market condition before. I'm not suggesting for a second that there isn't challenges because there are, but it is a sustainable market set of conditions, and they'll farm like this. And so from a planted area perspective, Joel, to answer your question, we're expecting about 95 million acres of corn in the U.S., 85 million acres of soybeans. So that's 180 million acres that get planted. That's the mix. We're seeing the right behaviors when it comes to applications for pre-emergent sprays, and I've already mentioned the need for technology in seed. Overall, what we're watching carefully is most farmers already had their fertilizer sourced for the spring. So I don't think there was a planting decision because of higher energy prices that have shifted in North America. So we're going to probably see that the first time in LatAm. And so that's the one area that we're watching with elevated energy pricing, what happens in LatAm. And our view is that we're probably going to see 1 million or 2 million hectares of incremental soybean production, just more land going into production. And the safrinha crop, which is considered a secondary discretionary crop, it's a corn crop, could be flat or modestly down. And that's the one area that we're watching quite carefully. And there's a little bit of time before we will know that. But overall, I'd say that the impact of sort of the higher energy is being reflected in higher fertilizer and fuel input costs.

Okay. You're probably getting very close to putting out Brazilian seed price cards. How is that going?

We are getting very close. Okay. So look, in corn, what I would say is our order book looks great, first of all. We did mention that if you expect the acres to be somewhat flat year-over-year, and our price cards will come out, but we're expecting a modest price increase in the corn technology as we price for value with our normal strategy. In soybeans, it's really interesting, right? That's probably one of the largest opportunities that Corteva has today because we actually have a very -- if you look at our seed business around the world, we're either #1 or #2 in every major markets we operate in, in corn and soybeans. And we're building a really interesting and exciting licensing business around the world. The soybean market in LatAm is the one that we are underrepresented and so therefore, the largest opportunity. And we're rolling out our Conkesta E3 technology. So the same technology that we had in the U.S. We're bringing that down to Latin America. And we're seeing just huge demand for that. So this year will be the year where we actually cross double-digit market penetration for the technology itself. From a pricing perspective, I'd say we're consistent with the market. The market is probably a little less than corn. So I'd say somewhere around flat to slightly up. But we're seeing very good demand for our next generation of technology. And that's the opportunity. If you recall, what we said is we'd like to have about 1/3 of the Brazilian soybean market by the end of the decade. So that's where a lot of our growth is going to come from. We're pretty excited about that.

Can you walk through the bridge for '26. I know you held your guidance the other week. You also said things are trending a little bit better than that, but you wait until August to update -- to give a little more official numbers. But can you talk about the bridge in '26? So moving parts, what's been a little bit better, what's been a little bit worse? So far this year?

I handle that, Joel. So thank you very much for having us. When we step back and look at the pricing, we just talked about that, our initial estimates were low single-digit up in seed and low single-digit down in CP. And I think generally speaking, that's still our outlook at this point in time. When you look at volumes, Q1 was very strong volumes. You saw that in seed, but we believe some of that is just timing. We had some Q4 volume that moved into Q1. And we always have this volume component depending on weather between March and April. April is always our largest month. So it's always a little bit difficult when you look at Q1 in isolation. That being said, CP, new products were up 20%. I think the other thing that's really important about that is we're seeing pricing to be stable, if not up a little bit in new products in CP. So I think that's just, again, reflecting the need for technology and people willing to pay for technology. So I think the volume price more or less Joel, pretty much in line where we thought. When you start looking at things like cost, we had a very good start of the year in productivity. So I think if that's one element that could be a little bit favorable going in. However, we are looking at this Iran conflict. We mentioned that, that could be a $40 million kind of headwind in the back half of the year. We also said that there could be some upsides in things like our tariff number that we had relatively put in. And we do think currency, we showed that is favorable in Q1, probably a little bit favorable to where we were. And then we also talked a little bit about royalties. And we said that going into the year, royalty neutral was where we expected. And right now, we think that might be a little bit favorable. So you add all that together early in the year, we feel pretty good with our guide and the midpoint being up 7%.

Yes. Fair enough. And maybe we can talk about also you signed the agreement a few months ago with Bayer. Talk about how that changed some of your plans or acceleration plans on the out-licensing?

Yes. So this is probably one of the more exciting growth platforms we have in the seed side of the house. If I just distill it to the highest level, the corn soybean addressable market for licensing in the Americas is about $4 billion. And we have a very small part of that. And as David just mentioned, this will be the first year we're sort of royalty positive, which we're very excited. It is a milestone for us. So what we think our journey is now is to create about $1 billion of net licensing revenue over the next decade in corn and soybeans only in the Americas. So really significant growth. The agreement that we finalized with Bayer, which I think is good for both companies, really allows us to access a part of the market many years earlier than we thought we could, which is what we call the triples, which is herbicide protection and then aboveground and belowground insect protection in corn. It's about 1/3 of the U.S. corn market, very, very lucrative market. So what we -- the reason we're going to be royalty positive this year is because we're able to at least sell some of that. We have more demand than we have supply today because we now we have to create the parent seed to be able to sell to our licensees. There's about 100 licensees we're working with across the United States. But $1 billion over the next decade is sort of the bottom line for the licensing business. So it's a pretty exciting growth trajectory. I will make one caveat. We're also launching hybrid wheat in 2027 in the United States. We're getting started on that. So if you think about that, there's been a lot of R&D effort to try to hybridize wheat. And if you recall, we hybridized corn about 100 years ago, Pioneer did that. And so I think we've cracked the code. We've got some phenomenal technology. That is another $1 billion of growth opportunity, probably not in the next decade, probably in the next 10 to 15 years as we ramp that up and we take that technology around the world. So that's sort of the growth trajectory that we've got for Vylor for the seed business now is $1 billion of out-licensing and $1 billion of wheat over the next 15 years or so.

And also this year, like you updated a bit on the CP market, talking about how with what's going on in the war conflict, you've seen maybe the price of generics, the cost of generics go up, maybe it's early days you said. Can you talk about that a little bit and seeing if that's maybe going to help lessen some generic pressures?

It's very early days. I'll just caveat it, footnote it, however else you have to describe it. 1 or 2 data points is hard to say a trend yet. But what we're finding, the March data that we referred to on the earnings call was we're seeing higher pricing because of higher energy pricing coming out of Brazil for actives. And what that's prompting is several of the active suppliers from China have increased pricing. And David referenced the impact on our P&L, most likely in the second half of the year being about $20 million on the CP side. But at the same time, we're seeing a slowdown in some of these actives entering Brazil, which I think will have some supply-demand tightening effect, but probably not until the earliest late this year, and it could even go into 2027 because there's inventory in the channel, of course, and all of those good things. So we're not declaring victory by any stretch of the imagination right now, but the trend line seems constructive and it's something we're watching very, very carefully. And I think that, that's what the market needs. And then -- and so if you think through our assumption for CP is we -- the CP industry over the last 3 years has been challenged. I don't think that's any secret. Last year was the first year where the industry was flat, and we declared that victory because the prior 2 years were down. We always thought that 2026 for CP for the industry would be a return to growth year, really driven by volume with negative pricing. And so if we can see some stabilization in price in LatAm, I think that sets up maybe even a further recovery in 2027 for the global CP industry.

So you would have thought '26 would be more L, but maybe there's a chance it may be -- do you call it a V, whatever we call it.

I don't know if I'm really good with the letter.

I don't know.

I just think that the trend line is slightly better than we thought, especially -- and we need to see how we get into the second half of the year. And how long does this higher energy continue because there are pros and cons to that. But the one thing it will do is it will elevate actives coming out of that part of the world. And then I think there will be a supply-demand adjustment because of that.

Think of things in the competitive landscape in '27. On the seed side, one of your competitors is starting to put out a couple of blockbusters in their terms. They've got the short stature corn Preceon, you've got your own competitive responses. You've got Vyconic soybeans, it will be small. What do you think about the competitive landscape in seeds? How does it look a bit different next year? Or does it look different at all?

Yes. Look, the seed landscape is always competitive. There's a lot of great players with tons of phenomenal technology. And there are some new technology coming in, but we'll have ours as well. So our reduced corn will be available into the market most likely 2028 is sort of our time line. We've got a natural version, and we've got a gene-edited version. So depending on which way the market takes us, we'll be ready when the market is ready for reduced corn. I don't think it's going to be a switch where the entire U.S. market is going to switch to reduced corn. I think it's a new cropping system. And because it's a new cropping system, it's going to take a little bit of time for folks to get comfortable with. But I really like our lineup. I would say that our seed pipeline has probably never been as strong as it is today. Even well before my time, the veterans of our company would say we have got a phenomenal lineup. And so I think our whole mission is just to keep driving genetic gain. We're placing a significant amount of capital bet on the advent of gene edited technology, which if you've heard me talk before, we fundamentally believe that, that could be more impactful, more powerful than biotechnology was 25 years ago, not to oversell it, but I don't know if we've seen the limits on what gene edited technology can do. We're seeing higher yields. I think we're able to bring more disease resistance into the genome. We think we can bring insect resistance into the genome. And we can also make healthier, more nutritious food with the manipulation of the genome. So there's a lot to like here when it comes to gene-edited technology. We are one of the leading patent estate holders in the world. We've made an early bet and the first corn hybrid that we will bring into the market, we're very excited about this will be what we call a disease super locus -- it will be a gene edited corn hybrid that will have significant disease resistance built into the genome, and we're going to bring that into market in 2028 and put that in the hands of growers around the world.

In fact, let's talk about gene editing because is it such a way -- is it going to be in a way that we're going to change how we develop innovation, new products, revenue models? How does Vylor have to adapt? Please go do it by the way.

Okay. Good question, Joel. Look, I think the short answer is we're not sure yet. The traditional way that we price for our seed is we price for value. So we've got this massive breeding machine on the seed side of the house, we spend $1 billion a year in R&D. It's enormous. And what that gives us is it allows us to drive genetic gain on the farm every single year. And what -- the way we price for the seed is if we give a farmer 3 bushels per acre, we want to share that disproportionately to the favor of the farmer, but we price for that genetic gain. So now you have to think about, okay, well, what happens if we were able to really crack that model where we're not getting 3, but we're getting a lot more than that. What happens if we can eliminate complete fungicide application sprays. That's worth incrementally more. We're not sure how to price for that yet. We're obviously talking to our customers. We're running some models. But I think that, that is just a win-win for us as a technology company, but more importantly, for farmers. If we can drive up profit per acre that significantly and then allow them to enter new markets. So think about biofuels. With gene edited technology, driving -- as we talked about last night, driving the oil content, for example, up very significantly. We can have multiple sources of revenues for farmers. Yes, we'll get paid for that, but it diversifies their business, and it allows them to make more profit per acre with the modification of the genetics. I think that is huge. And that's not only a win for us and a win for farmers. I think it takes global food security to the next level, which is really why our company exists today.

Okay. Let's talk about the breakup a bit. Maybe you can give a bit about.

It's not a breakup, it's a separation.

It's a separation. Okay.

We still like each other.

Okay. Can you talk about some of the rationale for the separation?

Okay. Well, I think, this is probably old news by now when it comes to the separation, but it's a leading question.

It is.

Okay. Look, I think when we started to look at this some time ago, we were looking at the future of crop protection and where the industry most likely is going to head. And we were looking at the future of the seed technology business, and we just talked about gene editing and new technology that we're able to kind of undertake there. Both of them are very exciting futures with significant growth opportunities, but the overlap is becoming less and less today. And so -- and you've got this company that we built and the decision to create Corteva is absolutely the right decision at the right time. And the reason I say that is if you just look at the Enlist platform, which is a proprietary herbicide technology platform, it's created enormous amount of value for farmers and for our stakeholders. But when you think about the future now and what it's going to take to be successful in the kind of the next gen of technology, those are primarily going to be more open source technology and farmers are going to need multiple modes of action. The days of having sort of one herbicide tolerant technology in a set of genetics, they're long gone now. And so you're going to have to have multiple modes of action, which means that the industry is going to have to collaborate more together. That's our thesis. And so how do you do that? And so how do you and if you think about what it takes to invent a biotech trait today, it's hundreds of millions of dollars and 15 years of development and regulatory. To develop a new active ingredients, it's almost the same amount of money and it's close to 12 years to get it developed and bringing it to the market. So that's a lot of risk for companies to take. And we think that when we separate, there'll be more opportunities to partner like-for-like companies and derisk some of this innovation, which I think will bring costs down for us and at the farm level. And this is super important. So the reason that we're separating isn't one thing, and it certainly wasn't to create some short-term lift. We think that the path for the 2 companies fundamentally are not going to overlap as much. And it's going to actually open up other partnerships and availability in terms of working with other companies to leverage the strengths of either company. So that was the thesis, Joel. And I think when I -- after we announced the separation, I went on the road and I went through Latin America and I went through Europe and then, of course, through the United States, and I checked with our channel partners and our farmer customers, they see this as a nonevent. They just want access to the best technology, whether it's in one company or not, they're really indifferent about. So I think that from a customer perspective, this is going to be neutral, maybe even positive. And for us to unlock value, I think there's going to be a lot of great opportunity here.

And I mean the synergies kind of low, I mean, decent. And I think there were some doubts you could hold it there, but you've been able to. Maybe talk about some of the work on that.

Yes. So I'll handle that one. So when we first announced our separation, it was -- we said we had put in a net dis-synergy number of $100 million. So -- and I think in some cases, some people were thinking as a little skeptical was pretty low. I think it's a reflection on the fact that the businesses today do operate somewhat separately, and I'll go through some of the examples. The seed business today is very much a local regional business. And when you look at the CP business, it's fundamentally a global functional business. And so when you think about how you operate that under one umbrella as Corteva, we had a layer of management and so on and so forth to keep the glue together, to keep those businesses together. So as we start looking at how do we take our 22,000 employees and frame and purpose-built organizations, we found opportunities to save some money that said that we don't need that glue anymore, and then we can make these organizations very specific to the needs of those individual businesses. So when you look at that, we know that the non-headcount number will be a dis-synergy. We have certain corporate costs and so on and so forth that will be more expensive. But as we sit here today, we're about halfway through 6-plus months in. We're saying that we're actually trending a little favorable to that net $100 million number. So we feel really good about that. And probably one other thing, too, Joel. We said on timing, I think a lot of folks were a little bit skeptical again about how fast we could do this. And I said we're right on target. And the reason why we're able to do that, when you think about separations, some of the longer lead time items usually are things like systems that we already had our ERP system separate. And in some cases, there might be co-minglement around manufacturing or what have you. Our manufacturing is 100% completely separate. And so when we're looking through the details, there's really literally a handful of agreements that we're going to need between the 2 businesses to go forward.

Thinking about the separation, a couple of things. So on the CP side, so in the Pioneer channel, you do a bit of CP. Talk about the opportunity might be to do a little more CP in the channel -- in the Pioneer channel and maybe open the door up to even more from third parties?

Yes. So the way the Pioneer agency model works, it's a direct-to-farmer model. So we have local independent business owners that are pioneer reps, and we allow them access to our seed technology and they work directly with farmers to sell seed. But a lot of these are really good business people and they sell many other things. So they will -- about 20% to 25% of them will sell crop protection. They usually don't do the order fulfillment. They usually work with a local retailer in some capacity. And the model I'm describing is an American model. It's a U.S.-based model. And of course, our crop protection would be part of that. But we've never ever mandated even inside of Corteva that they can only do this or that with CP. We just don't feel that, that is for us to do. We want the Pioneer agents first to focus on seed. But if they want to do something else, obviously, they can sell our crop protection, we would allow that and help them, but they can sell every other crop protection as well. So once we separate, I don't think there's a lot of change here on either side of the house necessarily initially. But I think where you're going, Joel, is that you've got to imagine that what we have in the United States is we have a relationship with about -- well, the top growers in the U.S. with about 65 million acres that grow corn and soybeans every year. And these relationships run deep. They're strong. So the question is, okay, well, should we, as a seed company then invite others to have access to that channel. And how do -- is that good for farmers? Is that good for the Pioneer reps? Is that good for Vylor? And so those are interesting questions that are in the early days today. We'll probably have a little bit more to talk about that in September. But it is an interesting -- when you think about that channel and how powerful it could be, what could go through that channel, it has some interesting questions. But these are just, I'd say, today, musings more than anything. What we're going to really focus on right now is making sure that we're putting the best seed in the hands of growers so that they can produce really high-quality crops.

Okay. So you're separating BASF is separating Crop Science. Bayer could separate their crop science. FMC has got lots of stuff going on, maybe they'll start separating some assets from themselves as they try to shore up their balance sheet. So the world that we know it in this landscape could be a lot different in 2, 3, 4 years or it will be. How do you see that? And how do you think of, I guess, New Corteva, the CP space of pure play being an aggregator, being aggregated, like what will its role be in that new world? I know it's for Luke to answer, but he's not here.

Here. I don't want to speak for Luke. But let me tell you how to set up what we're going to give Luke. We're going to give Luke a ton of options and strength is how I would describe it. So the first thing I need to say right upfront is we plan to do nothing that will impact the separation. So our first job is to deliver 2026 the way we've committed it. And the other first job is to separate in the fourth quarter. So that's really, really important. Beyond that, though, David is going to ensure that both companies have very strong balance sheets, and we've already committed to being investment grade on both sides of the house. So by definition, our Crop Protection business will have the financial strength, and it's got very good margins. It generates a lot of free cash flow, and it's going to have a wonderful balance sheet. So it will have the strength to grow. Now my view is that the primary mechanism for growth in CP will be through that multibillion-dollar pipeline that we've already invested in. And just to talk a little bit about the CP pipeline is in the next decade, we have 7 new active ingredients that will come into the market. So not quite one a year, but one every year in a little bit. Plus we have an entire biologicals portfolio on top of that, those 7 actives, those 7 actives are chemical actives to bring into the market. So when I start thinking about the growth for New Corteva, I think it's going to be organically driven for the record. But if it chooses to participate in M&A because there's a consolidation event or there's portfolio of assets available, it will have the strength to do that, for sure.

Okay. And just the new world order of CP and C companies, do you have any thoughts on that?

No. I think it's all natural and healthy on what's happening across the industry. I certainly believe that my view is that the 2 halves of our company, so Corteva and Vylor are going to be very, very well positioned. I do think the industry needs to collaborate more together. I've said it many, many times, I come out of the commodity world where in the commodity world because costs are so important, the industry is just naturally built to collaborate more together. What I find a little odd in this industry is that there's more tension when it comes to sharing and collaborating in areas where it makes sense. And it's usually to derisk technology because technology is so darn expensive to bring to market. So I'm hoping that with the adjustments that are being made that the industry will find a way to co-collaborate on big technology to allow productivity and cost to come through to farmers. That's my vision of the future.

On the Department put out a statement this week about wanting everybody to share IP and be more collaborative. Is that the way you interpret it?

Look, I think that certainly, when it comes to our seed technology, there's already a lot of commercial relationships. So as I mentioned, right now, we license our seed technology to 100 licensees in the United States. So there's lots of access to the best technology. We also spend $1 billion a year to continue that to ensure that, that technology in the seed side is the best it can be. And so it's one of these interesting things, right, is if you're going to make an investment like that, you need to be able to have a sufficient return. But we do make the technology available to those that want to license it and want to brand it as their own. And I think that allows for us to have large companies that are innovating. We have smaller companies that are innovating and we have companies that don't have the innovation engine, but want access to the latest and greatest. So certainly, we're supportive of all of those things. We think it is very, very important that we have a highly competitive industry, access to technology, where we don't want the industry to go, though, is where we have companies that have not invested the money into the innovation and then they try to access it inappropriately.

Have you thought about the dividend structures of the 2 separate entities?

Yes. So we -- one thing I should mention is in September, mid-September, we're going to have 2 Investor Days, one for each company. And during that period of time, we'll be giving an outlook out to 2029 with the financials. We'll also be going through and basically deciding what the capital deployment strategy will be for each company. Right now, Joel, we've really been spending our time on capital structure. Like Chuck mentioned, we expect both companies to have an investment-grade metrics for both. I think you saw the announcement that we invested $1.5 billion essentially into our pension plan that would have remained or will remain with New Corteva. So that derisks a lot of liabilities on that side of the balance sheet. So that's really where we're spending the time. But I think the more important thing is Corteva has a very strong balance sheet today. So both companies, we expect to have strong balance sheets going forward, which I think will give them the flexibility to do whatever they want whenever it comes to capital deployment.

You talk a little more about hybrid wheat. You're rolling out -- I think there's also another competitor KWS rolling out some next year. Can you think about the hybrid wheat has been a tough nut to crack for ever. Talk about why it's been hard and now you and another player are trying to get in the market, what's going to be like?

Yes. So the challenge is, obviously, the companies that are working on this understand hybridization. But the challenge has been that the hybridization models that exist today prior to our technology have been cumbersome. And what that means is then that the cost to produce the seed is very expensive. So then once we try to get an appropriate margin and we have to price that at the farm level, a farmer is looking at the yield advantage and the price that they're paying and it doesn't work. So it's not like we haven't been able to -- we haven't tried, but we've never been able to make the economics work at the farm level. So what's different? So we have now a proprietary production system for our hybrid wheat, and it's the first of its kind, and we have patented it. And what that's going to allow us to do is -- so the very first set of hybrids that we're producing right now is showing 10% to 15% yield improvement in wheat production. And you got to think about that for a minute, right? That's the worst it's ever going to be because it's the first hybrid coming out of the pipeline. So it's just going to get better from there with breeding. It's really powerful. But the difference is the cost of production is lower. So we're able to charge an appropriate price at the farm level where a farmer can look at it and the economics will make sense. And so what we're hoping for is if they see a higher yield and then most importantly, a higher profit per acre, they'll invest in that seed technology because it's better for them. And so we're going to roll this out in 2027. It's going to be a small launch. And then we're going to take this technology, I'd say, around the world, but only around the world where we can have the IP protected. So there are some parts of the world that don't protect the IP, just like corn and soybeans, we won't sell in that area. We may sell the seed when we have access to the right germplasm, but we may just license the IP to other germplasm holders in other parts of the world. And so that's the work that's underway right now. But it's a pretty exciting future for us. And then if you think about why it's so important, so wheat is the largest row crop in the world. And it's also 20% of the calories we consume as humanity. So it can go a long way. Yes, we talk about profit and we talk about yield at the farm level, but this can move the needle when it comes to global food security because the most insecure parts of the world actually rely on wheat more than others. So this is an area where we can really move the needle, I think, with feeding people.

I have a different question. And thinking about your separation, I mean, what should like high-quality seed -- pure-play seed company top innovator. What type of multiple should that company trade at? And then what type of multiple should a high-quality CP company like New Corteva trade at, you think on the market?

Yes. So I'm not going to give you a number. Joel, that's your job.

First 2 numbers.

But let me just say this. Okay. So for Vylor, what we're going to try to articulate for you in September is a company that is going to grow the bottom line at mid-to-high single digits. It's going to have like 25% plus EBITDA margins, and it's going to convert an awful lot of its EBITDA to cash flow. You can put the multiple on that. To me, it's a pretty special business. But at the same time, if you look about the CP business, it's a chemical -- it's a specialty chemical business that has a large part of its portfolio protected by IP and innovation. So I would take the specialty multiple and start looking up from whatever that is because it's got the IP around it. And it's got a pipeline around it, and it's going to invest about 6% to 7% of its revenue in R&D and create next-generation technology. So the answer is more higher. But we also recognize that our jobs as officers of these companies are to execute and to deliver. You guys will decide how much it's worth. But to me, the opportunity for both is going to be very, very exciting.

Thank you, gentlemen.

Thank you.

Thank you.