Operator: Your next question comes from the line of Steve Byrne of Bank of America Securities. Please go ahead.
Unidentified Analyst: Yes. Thank you. This is [indiscernible] filling in for Steve. So I wanted to ask a little bit about seed pricing outside of the US. And the first part is, you had pretty good pricing — well price mix. And can you discuss a little bit how much of this was like-for-like price increases versus increase as you mentioned, for example, in Turkey to offset the FX or just farmers upgrading to new hybrids and varieties? And what is driving this especially since farmer economics outside of the US are a little bit worse than here we think. And the second part of the question is can you let us know how do European seed price is compared to US price currently? And what is in your view the upside to pricing once you start marketing genetic products?
Chuck Magro: Okay. So look, I’ll have Tim talk first maybe about our strategy on how we price for value. And then, we can talk a little bit about what we’re seeing in each of the regions. Tim, go ahead.
Tim Glenn: Yes. So on the price for value, I mean that’s — we anticipate that over time that we’re going to be pricing in that low-single-digit range based off of the value of the new products that we bring to the market every year. So we plan to have 20% 25% of our lineup in new genetics that open the door for value share with our customers and gives us that pricing power. And I think I had a little bit of difficulty following the question but I think you asked about the relative pricing between Europe and North America. So in Europe, I would say that, as Dave mentioned, Turkish lira was one of those inflationary currencies where we had a price to offset currency. And we still would have had low-single-digit price increase in Europe, excluding those countries where we’ve had the price to offset currency devaluation.
So, there’s still positive momentum there. And in terms of absolute pricing differences between the two regions, really not comparable, because they’re completely different products and technology packages. The majority of our products in North America would have some biotechnology associated with it and virtually none in Europe would. So really, it’s not an apples-to-apples comparison, but both are priced fairly for value and for their marketplace. So that’s how we operate around the world. And I’d say the philosophy is very consistent between the regions, the geographies. It’s all about bringing more value to our customers and when we do that, then we have the opportunity to earn a share of that value back through pricing.
Operator: Your next question comes from the line of Chris Parkinson of Wolfe Research. Please go ahead.
Chris Parkinson: Great. Thank you so much. Can you just speak on the latest update on how you’re thinking about COGS for both CPC as well as Seed? Obviously, on the latter, you have a few hedges this year. So could we just think about on a preliminary basis, how should we think about that as we progress throughout 2024 and into 2025. And then on the CPC side just given the number of turns of inventory you have on a per annum basis, how we should be thinking about that second half onwards? Thank you so much.
Dave Anderson : So maybe I could, Chris, just give you some — this is Dave, give you some perspective on that. I think, first of all, when you look at our prior guide to this guide, we do have some increase in cost on a year-over-year basis, and that’s associated with the Seed business and the assumptions around the second half and particularly safrinha volume, which the anticipation is that we’re going to see, call it, recovery — market recovery there in terms of that volume. And we’ve got some higher cost inventory that’s going to flow through in terms of cost of goods sold. And that’s part of just carrying some historic higher production costs, but also it’s a transition from older technology to newer technology for that market, which really will set up very, very well for improved costs in the Seed business in that market in 2025 for the 2025-2026 season.
When you stand back and look overall, we’re absolutely on track in terms of productivity for the full year of about $200 million. On the Crop Protection side, in terms of — and I may have mentioned this earlier, in terms of the cost deflation, in other words ingredient or raw material cost deflation, we anticipate $150 million benefit in the second half. So that will tie to our expectation of $100 million of deflation benefit for the full year. So kind of under the banner of what we call or speak to in terms of controlling the controllables where cost is a very key element of that, we’re absolutely on track with the exception of what I mentioned about the Seed business in the second half, where we’ve got also a fairly significant volume uptick again associated with that market, if you will, improvement in that market recovery assumption we have for safrinha.
And for both businesses, what it does is it sets up for additional favorability for 2025. And because we’ll see now some of, call it, additional deflation benefit in Crop Protection as well as now some of the commodity cost improvement as well as other cost actions improvement for 2025 and for the Seed business. Again, I hope that helps.
Operator: Your next question comes from the line of Adam Samuelson of Goldman Sachs. Please go ahead.
Adam Samuelson: Yes. Thank you. Good morning everyone. I was hoping to maybe dig in a little more on the Crop Protection side and some of the pricing dynamics that you’re seeing there. And just how much do you think that just reflects some of the deflation in some of the active ingredients on the generic side versus an actual kind of change in the competitive landscape in any of your kind of key product lines? And maybe specifically, in herbicides, for Enlist in the U.S., can you talk to what the attach rate of branded Enlist herbicide is now tracking at to the Enlist acreage that you have in place? And is that — is the value kind of realization on Crop Protection meeting kind of your own expectations from a couple of years ago as Enlist has garnered a much higher share of the soybean market? Thank you.
Chuck Magro : Good morning, Adam. Let me give you the overall backdrop. And then I think Robert can give you sort of the specifics to your questions. What we’d say is that there is a lot of competitive tension right now, and it’s not one thing. I think it’s still the industry working through the global destocking that we’ve seen. And the good news is there are some green shoots. The US seems to be behind it. We’ve called out though that the market is going back to sort of just-in-time closer to the application window. So there’s some timing and seasonality there. Europe is going through the destocking now and it’s been through the — in terms of the first quarter. And then they’ve had some difficult weather that we’ve already talked about this morning and even some missed applications.
But I think they’re trending in the right direction. APAC has been a little bit less impactful. They had some, but not a significant amount at least not in the products and the portfolios that we participate in. So then it comes down to Brazil. And the bottom line with Brazil is, it is still imbalanced. It is trending in the right direction. We’re seeing the channel inventories reduce certainly from the December numbers that we’ve seen early numbers now for the first quarter that are positive and heading in the right direction. But Brazil still needs to destock a little bit more. And we think that will happen. It goes without saying, but on-farm demand in Crop Protection globally is still stable and healthy. And that is a very important statement.
So with that now, I’ll turn it over to Robert to answer your question on Enlist and the attach rates.
Robert King: Thanks, Chuck. Price competition as Chuck talked about is pretty stiff. But our price for value continues to be pulled through by the industry and creates value on the farm. When you think about our new products and Spinosyns combined and the performance rate there, they continue to perform better than the portfolio and better than the industry. And this first quarter was no different. These things aren’t immune to impacts of the environment of marketing — market environment et cetera. But then on the specific to Enlist, it continues to have a strong pull, very strong demand. We expect spray rates to be still in that 80% range, as we’ve seen in the past. And we do expect that we’ll see continued volume growth this year over last year with this technology. Thank you.
Operator: Your next question comes from the line of Aleksey Yefremov of KeyBanc Capital Markets. Please go ahead.
Ryan Weis: Thanks and good morning. You’ve got Ryan on for Aleksey here. Just wanted to dig in a little bit on the generics in Brazil. I know in 3Q you kind of saw an influx of imports which you then called out a little bit of a slowdown in 4Q. Just trying to understand, how that progressed throughout 1Q and what you’re kind of seeing today? Thanks.
Chuck Magro: Yes. So look, I think we even called it out in our fourth quarter in February that the generic imports into Brazil have what I’d call stabilized to sort of more normal import rates. And so, they’ve always been part of the market and they’ve been a larger part in APAC and Brazil. That’s — there’s nothing new there. There is some new capacity coming online for some AIs that are coming off patent. And certainly, our strategy as a company overall is to sell differentiation value agronomic service. And so there’s a lot of the parts of the generic market where Corteva is simply just not focused on. So I’d say that the market fundamentals today, when we look at the global CP market and I think this comment applies to Brazil as well.
