Good day, and welcome to the Corteva First Quarter 2022 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Jeff Rudolph, Vice President of Investor Relations. Please go ahead.

Good morning, and welcome to Corteva’s first quarter 2022 earnings conference call. Our prepared remarks today will be led by Chuck Magro, Chief Executive Officer; and Dave Anderson, Executive Vice President and Chief Financial Officer. Additionally, Tim Glenn, Executive Vice President, Seed Business Unit; and Robert King, Executive Vice President, Crop Protection Business Unit will be part of the Q&A session. We have prepared our presentation slides to supplement our remarks during this call, which are posted on the Investor Relations section of the Corteva website and through the link to our webcast. During this call, we will make forward-looking statements, which are our expectations about the future. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Our actual results could materially differ from these statements due to these risks and uncertainties, including, but not limited to, those discussed on this call and the Risk Factors section of our reports filed with the SEC. We do not undertake any duty to update any forward-looking statement. Please note, in today's presentation, we will be making references to certain non-GAAP financial measures. Reconciliations of the non-GAAP measures can be found in our earnings release and related schedules along with our supplemental financial summary slide deck available on our Investor Relations website. It is now my pleasure to turn the call over to Chuck.

Thanks, Jeff. And thank you for joining us on the call and webcast today. Corteva delivered a solid start to the year with double-digit sales and earnings growth in the quarter. Despite pressure from ongoing inflation and supply chain challenges, the team delivered impressive value creation. Every region delivered double-digit organic sales gains led by strong demand for our advanced technologies. Further, the company continued to drive penetration of our leading pipeline with new crop protection product sales of approximately $480 million, a nearly 60% increase over the prior year. This was led by products like the Enlist soybean system, which continues to gain traction in the market, given its superior performance and grower confidence. And we expect to be on at least 40% of the U.S. soybean acres in 2022. We are encouraged by the current ag market backdrop and the overall financial health of the farmer. Market demand is solid, evident by the strong position of our order book, and growers are investing in their crop through top technology to maximize yield. We expect these trends to continue throughout the year, given current commodity prices and the fact that productivity on the farm from top-tier seed genetics in yield advantage Corteva products is the best way to manage inflation. Despite robust customer demand, we continue to experience increasing global macroeconomic uncertainty. Similar to 2021, supply chain challenges due to labor shortages, logistical constraints, and COVID-19 impacts are leading to further inflationary trends. This is compounded by the rise of global energy prices, which is adding to the volatility of raw material availability and prices. Given that we are still early in the growing season in the Northern Hemisphere and the significance of the first half in the agricultural industry, we are maintaining our guidance at this point. In addition, through our significant global macroeconomic and geopolitical considerations, all of this is against the backdrop of strong ag market fundamentals. And we remain constructive on the year and will provide an update on guidance as the year progresses. Turning to the work we kicked off earlier in the year on accelerating the operational performance of the company. In the quarter, we announced that we are moving from a matrix organization to a global business unit model to drive overall simplicity and speed of business while increasing accountability. We have two great global leaders to run these businesses and extract the value potential we see in our premium technologies. Tim Glenn, who is an ag veteran with tremendous experience to capture the value of our market-leading seed franchise. And I'm excited to welcome Robert King to Corteva, given the experience he will bring to the crop protection business to maximize our operational effectiveness and growth potential. This was a critical step for the company, as it now allows these leaders to focus on optimizing the business and operational structure to maximize the customer experience and deliver on growth and earnings potential. This will include prioritizing the product portfolios, the markets we serve, and how we go to market. This will also include optimizing all support costs. This work is well underway and we will provide updates in the near future on our progress. Now let's go to Slide 5, where I'd like to provide our insights on the ag market outlook. As I said in my opening, ag fundamentals remain strong despite recent market volatility. We expect record demand for grains and oil seeds in 2022, which we believe will keep commodity prices at elevated levels. And we expect this trend to continue for at least the next few years as ending stocks will remain under pressure. Recent volatility has increased due to several factors surrounding production, including the impact on global food supply from Russia's war on Ukraine. This region is vital to providing grain and oil seeds to the world, including countries where food security is critical, leading to further pressure on an already tight global food system. Corteva recently announced our decision to exit Russian operations while also committing to donate commercial seed to countries affected by these issues to help ease food security risk. Weather is another factor impacting production in key markets like Brazil and the U.S. Dry conditions in Brazil have led to yield and seed production impacts, which in turn impacts supply in that market and keeps seed availability tight. Despite a slow start to the planting season in the U.S., which shifted some U.S. seed deliveries into the second quarter, farmers are very motivated to get the crop in the ground. We are also seeing for the third time in recorded history, soybean acres outpacing corn acres. Dave will provide more details on this later. Grower balance sheets and income levels remain healthy despite increased input costs for fuel and fertilizer. This is leading to customers prioritizing technology for 2022 to maximize return, and Corteva is in a good position to capitalize on this opportunity. And with that, let me turn it over to Dave to provide details on the quarter and the outlook.

Thanks, Chuck, and welcome everyone to the call. Let's start on Slide 6, which provides the financial results for the quarter. As Chuck said, as you can see from the numbers, we've started the year strong. Organic sales increased 16% in 2021 with gains in both segments and all regions. Global pricing was up 9% with notable increases in seed and crop protection. Crop protection volume growth was driven by strong early demand in North America and the strength of new products, which delivered approximately $180 million of sales growth year-over-year. We delivered more than $1 billion in operating EBITDA on the quarter, a 15% increase from the same period last year. This is impressive performance given higher costs incurred in the quarter as a result of inflation. Pricing and productivity more than offset this expected impact, as well as an approximate $160 million currency headwind driven by the Turkish Lira and the Euro. This improvement translated into almost 100 basis points of margin expansion year-over-year. Going to Slide 7, you can see the broad-based growth with double-digit organic sales in every region. In North America, organic sales were up 15% driven by crop protection on early demand for herbicides, including Enlist. Seed volumes were down versus the prior year, primarily due to seasonal timing of U.S. Pioneer brand corn deliveries; both segments delivered notable pricing gains, a testament to the demand for our technology and our ability to price for higher input costs. In Europe, the Middle East, and Africa, organic sales increased 12% compared to the prior year driven by strong price execution. Local pricing helped to mitigate currency impacts, which was a 13% headwind in the region due again to the Turkish Lira and the Euro. Demand remains high for new and differentiated products, including Arylex herbicide and Inatreq fungicide driving 6% crop protection volume growth year-over-year. The region overall performed well in the quarter, despite the war in Ukraine that started in late February. Speaking of Ukraine, demand was strong in military-free areas for both crop protection and seeds. We did experience some supply constraints in the country due to logistical challenges of importing product. Our local teams were resilient. They were committed to deliver products and support our customers when able to do so. Farmers continue to plant crops and per local estimates, we expect more than 70% of Ukraine’s spring crops will be planted. In Latin America, we delivered 26% organic growth with double-digit volume and price gains. Pricing increased 12% compared to the prior year driven by our price-for-value strategy, coupled with increases to offset rising input costs. Seed volumes increased 11% despite tight supply driven by Brazil safrinha, while crop protection volumes increased 16% on demand for new products, including Isoclast insecticide. Asia Pacific organic sales were up 22% over the prior year on both volume and price gains. Seed volumes increased 49% on the recovery of corn planted area from last year’s COVID-related impacts. Crop protection organic growth of 13% was led by continued demand for new and differentiated products, including Rinskor herbicide and Zorvec fungicide. Let’s now move to Slide 8 for a detailed review of operating EBITDA performance. First quarter operating EBITDA increased by $130 million to over $1 billion, as that previously covered strong customer demand drove broad-based organic growth with price and volume gains in all regions. On costs, we incurred approximately $200 million of market-driven cost headwinds in the quarter driven by higher seed commodity costs, crop protection raw material costs, as well as freight and logistics. The company realized $80 million in productivity savings in the quarter, which helped to partially offset this impact. Currency was a $160 million headwind again, primarily driven by the Turkish Lira and the Euro. Setting back, focused execution by the organization to meet increased customer demand and effectively managing cost headwinds through pricing and productivity resulted in almost 100 basis points of margin improvement for the quarter. Let’s go now to Slide 9, I’d like to expand a little bit more on what we’re observing in the current marketplace. Starting with our current planted area assumptions, we are aligned with USDA estimates for a 4 million acre reduction in corn, or approximately a 4% decline, and a corresponding increase in soybean acreage. Additionally, on planted area assumptions, an important reminder is that a 1 million-acre shift in the market from corn to soybeans in the U.S. represents an approximate $10 million earnings headwind to Corteva. And as Chuck mentioned, we’re closely monitoring the pace of planting given the slow start in the U.S. Inflation remains a challenge as we face pressure from rising costs in commodities, energy, and raw materials. Operational levers such as pricing and productivity actions are key for us to keep pace with these higher costs. And as you saw, the company recently announced plans to stop production and operations in Russia. Russia represents approximately 2% of total Corteva annual revenue with approximately 75% of that in the Seed segment. For 2022, we expect an immaterial impact from lost revenue. In addition, we expect charges in the range of $25 million to $75 million in connection with this decision, with the majority treated as a significant item, therefore, will not be included in our operating results. Currency markets have been volatile to start the year as we saw relatively broad appreciation of the U.S. dollar. An exception to that is the recent strengthening of the Brazilian real. Looking at the second half of the year, the Brazilian real is our largest foreign currency exposure. And while we’ve largely hedged the BRL with a rate around 5.50, we do have some sensitivity to currency movements and would see a partial benefit from a strengthened BRL. Now, given this backdrop, let's turn to the discussion regarding our outlook. As Chuck covered earlier, we’re affirming our full year revenue and earnings guidance for 2022. And as shared last quarter, we expect net sales for the year in the range of $16.7 billion to $17 billion, and we’re likely trending towards the higher end of the range. For the first half, we expect high single-digit reported revenue growth. Turning to EBITDA, we remain on track to deliver between $2.8 billion and $3 billion, a 13% increase over the prior year at the midpoint. For the first half, we expect mid-single-digit operating EBITDA growth given the disproportionate weighting of cost headwinds recognized in the first half. Lastly, we’re adjusting our operating EPS guidance to a range of $2.35 per share to $2.55 per share, representing approximately 14% growth over the prior year at the midpoint. This increase is largely driven by anticipated lower share count due to the good start we’ve had in the first quarter on share repurchases. Let’s go now to Slide 10. I want to leave you with some of the important takeaways from today’s call. First of course, market demand is strong and combined with solid execution, it’s led to a great start for Corteva, including impressive margin expansion in the quarter. We remain confident in our ability to deliver in 2022. We plan to maintain our track record on capital deployment. We expect to return more than $1.2 billion to shareholders in 2022 in the form of dividends and share repurchases. Additionally, our balance sheet provides capacity for attractive innovation and targeted growth opportunities. Finally, the company has taken very important steps in its strategic roadmap to accelerate operational performance and drive continued operating EBITDA margin expansion. More to come on this and we believe these strategies will further differentiate Corteva and position us to deliver increased value in the years to come. Finally, on Slide 11, we’d like to provide an update about a significant upcoming event. We’re excited to announce that our 2022 Investor Day will be held on September 13 at our Global Business and R&D Center in Johnston, Iowa. The management team will provide updates on the company’s strategy, our financial framework, along with a special showcase on innovation in our pipeline. Chuck, Tim, Robert, Sam, and I all look forward to seeing as many of you as possible at this event in September. And with that, let me turn the call back to Jeff.

Thank you, Dave. Now let’s move on to your questions. I would like to remind you that our cautions on forward-looking statements and non-GAAP measures apply to both our prepared remarks and the following Q&A. Operator, please provide the Q&A instructions.

Thank you. And we’ll go first to Vincent Andrews with Morgan Stanley.

Thank you and good morning, everyone. Just wondering if you can talk a bit more about the seed business and help us bridge 1Q with 2Q to kind of get to an understanding of how the first half or the overall season is going to play out. So maybe to start with the volume pushout from 1Q to 2Q because of the late season, how did that impact margins in the first quarter? And how will that impact margins in the second quarter and where do you envision the first half settling out? And then secondly, I’m assuming you’re looking for less corn and maybe more soy at this point, depending on what happens over the next couple of weeks. But if that is the case, is that baked into guidance now? And then lastly, how should we think about the corn and seed pricing in the U.S. for 1H? Is what we saw in the first quarter, corn up 6% and soy looking like it was probably negative. Is that what the first half is going to look like? Or will it be a little bit better or a little bit worse? Thanks.

Good morning, Vincent. Thanks for the question. So look, let me give you a couple of opening comments and then I’ll turn it over to Tim to talk about your specifics around the split between Q1 and Q2, first half and second half. We’re sitting here today in our headquarters in Indianapolis. It’s cool and it’s wet, probably no surprise to many who have been watching the weather. But certainly, it’s been a slower start to this season than last year. That is impacting our results when it comes to the seed business, certainly for the quarter, because of some weather delays here in North America, but also in Europe. We’ve got significant market volatility in terms of pricing, and the planting decisions that farmers need to make are being impacted by the weather. So Tim will walk you through the dynamics. We did mention in the prepared remarks that we’ve got a very strong order book, and Tim can walk you through that. I just want to remind the group here though, that if you look at the longer-term value catalyst that we have, the Enlist seed platform is really performing very well beyond our expectations. We did say we expect 40% of the U.S. acres to be on that platform. And that will set us up nicely next year for meaningful royalty reductions in 2023. And just to call out Bravante, our new multi-channel technology, it continues to perform very well. We’ve got very good demand across the channel, in fact, we are now selling it in North America, Latin America, and Europe. And that is exceeding expectations as well. So now I’ll just turn it over to Tim to talk a little bit about the dynamics we saw in the first quarter and what we expect in the second quarter and the remainder of the year. Go ahead, Tim.

All right. Thanks, Chuck, and good morning, Vincent. So maybe I’ll address three points you made there. First is around just the pace of the season in the U.S. Second is pricing, and I’ll touch on the seed margins and what we’re seeing there. So obviously, as you mentioned, and Chuck said, we’re out to a slower start than we’d like in terms of the pace of planting across North America. It’s wet, cool conditions that have driven that. That was reflected in our first quarter seed sales where we saw some Pioneer business that did not make it into the marketplace. Remember, how we recognize revenue is we distribute all that seed to our local sales representatives. They deliver that last mile to the farm gate when the farmer needs it. And that’s when we recognize the revenue. So it was that last mile to the farm gate that was the issue as we had challenging weather conditions at the end of March. What I would emphasize here is that there’s still more than adequate time to get this crop planted. The economics that farmers are seeing are still very strong. And so whether they’re going to plant corn, whether they’re going to plant soybeans, whether they’re going to plant cotton, there’s a strong incentive for them to get that crop in the ground. At this point in time, we’re not seeing a switch between corn and soy in terms of farmers switching the crop they intend to plant. The other thing I’d emphasize is that farmers have a tremendous capacity to plant. It’s not unusual when we get into planting season for farmers to be able to plant 40% of a specific state in a matter of seven days. As the weather starts to open up here, we’re going to see a huge push forward in terms of planting activity. From that standpoint, what we’re doing is we’re staying close to our customers, helping them navigate the decisions that they’re facing in the marketplace, so that they can make the best choice for their operations, and we’re there to help meet their needs. In terms of pricing, we did have a strong start to the year both globally and within North America. In the first quarter, we saw global seed prices up around 8%, corn around 8%, and actually global soy was around 6%. We had a good, solid start for the year on pricing, and we anticipate that to continue through the first half. We’re looking at solid mid-single-digit growth in the first half, and again, farmers have been motivated to plant the best products they can, high-performing hybrids in the case of seed. We’ve got an excellent lineup of products. We have a long, disciplined approach for managing price with our customers, and we have a proven ability to execute in the field to capture value. So that’s where we’re at on pricing. So very optimistic and I think consistent with what our expectations were as we started the year. In terms of seed margins, we’ve seen some margin compression on the seed side. Most of those headwinds we had expected as we came into the year. In terms of those headwinds, first, we had a higher than expected currency primarily out of Europe, about $90 million at the EBITDA level on seed. That was primarily from the Turkish Lira, as well as the Euro. We also had an impact on margins that I discussed earlier due to the weather impacts with a little bit less corn sold in the first quarter, especially on the Pioneer side in North America. Finally, there was about a 100 basis point impact from an equity adjustment on an investment that we hold that’s completely non-related to the operations of the business. I’ll pass it over to Dave for any additional comments.

Yes. Those are all really good points, Tim. And by the way, just back on that currency, you stated dollar terms. But Vincent, for your benefit and everybody, it’s over 200 basis points when you do the walk. Now some of that obviously we expected in the course of our guide for the year, but incrementally, that turned out to be significant. Regarding the equity investment, we had a loss in the quarter of mark-to-market on an investment that compares to the first quarter of 2021 that represented an impact of almost $30 million or as Tim said about 100 basis points. The company that where we held an investment technology-based had it for over six to seven years and IPO-ed in the third quarter of 2021. We’re on a mark-to-market accounting now. So that’s really the background on that. Appreciate the question.

We’ll go next to Dave Begleiter with Deutsche Bank.

Thank you. Chuck and Dave, I think you guided Q2 being a little bit below consensus, referring to the full year. So what’s the offset in the back half you guys coming in maybe a little bit better than we expected for you guys?

Yes. David, let me give you the backdrop on sort of our position on guidance, and Dave can talk to the specifics. So look, the ag fundamentals, as we said, are very strong. Corteva has had a real solid start to the year, and demand, we are expecting to continue to be strong through the remainder of this year and well into 2023. The execution of the overall business has been steady despite the supply chain challenges, and the cost pressures we’ve outlined. We’re making excellent progress in cost management, pricing, and productivity actions. But it is early. We’re sitting here in the early days of May, the season’s a little later than last year. In ag, you have to obviously think about the first half. We’re reaffirming the guidance. We’re very comfortable. We like how the season is unfolding. To get to your specific question on how we think about that range and what may or may not happen, I’ll let Dave provide the specifics.

Yes. The starting point is what we shared on the call, which is consistent with what we originally provided by way of the 2022 guide. Given the cost curve over the course of 2021, we see that those costs ramped, particularly into the second quarter of this year, and that’s built into our guides. On a year-over-year basis, the first half revenue is expected at high single digits growth, but EBITDA more in the range of mid-single digits growth. That’s consistent with the guide that we’ve provided previously. This relationship is related to the comps in terms of the period-over-period or year-over-year change, particularly on the cost curve that we’ve seen. The second half appears to be setting up nicely and that’s included in our full-year guide. Our expectation is we’re likely to be at the high end of the revenue range, reflective of ongoing inflation and pricing to offset cost impacts. Despite inflation headwinds, we anticipate to be in that range again for full year EBITDA. The other thing we’re seeing is Brazil planted area improvement. Tim referenced that a little bit when he was talking about seed. That Brazil planted area is clearly something that’s positive for us as we look at the second half.

No, I think Dave you’re right. Clearly, there’s strong incentive for continued growth in the soy area in Brazil, and we expect that possibly at the expense of first crop corn. But we expect that second crop corn, which is the largest market and most important market in Brazil right now to grow nicely as we go into the 2023 cycle. So very positive about what the outlook is there.

We’ll go next to Chris Parkinson with Mizuho.

Great. Thank you so much. When you take a step back on your CP business and you look at the growth of some of the higher margin, newer products, Arylex, Rinskor, Zorvec, and so on and so forth. And then also the pricing you’re getting in the vast majority of your geographies. Can you just give us a little bit more perspective on how you’re thinking about the intermediate to long-term margin profile of that business? Thank you.

Good morning, Chris. Yes, I’ll have Robert comment on the specifics. We’re very pleased with the trajectory that we’re on, so maybe just a few high-level comments. The CP business this quarter, we saw strength across the board. It’s really from customer demand for the latest technology and new products to drive productivity on the farm. One of the best ways that farmers can help offset the inflationary pressure they’re seeing on the farm is to drive productivity. They’re going to need technology, and our pipeline is growing quite rapidly with our new products. We think what’s happening in our business is you’re starting to see the impact of our new product portfolio on our bottom line. Robert will talk to the specifics. Later this year, we will bring up our new Spinosyns capacity late this year. You’ll start to see the impact of that incremental capacity and, of course, margin that will follow with it late this year and into 2023. We like the setup in the portfolio for the CP business, and that’s what I think you’re starting to see in the results. Now when you think about the inflationary response and how we manage price, I’d also say productivity in that business will be critical.

Yes. Thanks, Chuck. Overall, we do see high demand strength across the board for our technology. The supply chain held up this quarter held up very well, actually, moving more than 18% of volume on a year-over-year basis, and that’s an unprecedented headwind. We’re able to keep up and do a good job across the board. The new products that you mentioned there were up 60% year-over-year. We see that’s the value creation that our new technologies are providing to growers. We look forward and believe we’ll continue to see these improvements as we move forward into the rest of the year.

We’ll go next to Kevin McCarthy with Vertical Research Partners.

Yes. Good morning, everyone. Last quarter you provided a helpful bridge to your 2022 annual EBITDA versus 2021. I imagine you may not be in a position to update every item every single quarter. But nevertheless, can you provide some thoughts on three bridge items: your productivity goal, your net foreign exchange as it’s tracking today, and then the cost headwinds that you foresee in both seeding and crop protection for the year?

Yes. Kevin, I can give you a little bit there. The most important thing is that we see inflation continuing, and that impact is particularly going to be felt on the crop protection side. So the assumption is in the guide that we’ve given you is that we expect to be at the higher end of our revenue range, aiming for closer to $17 billion. That’s really based on inflation and pricing. Regarding foreign currency, as previously mentioned, we had a significant impact on foreign currency of about 225 basis points in the first quarter. Currency is expected to abate to some degree as a percent impact as we go through the year due to easier comparables. There’s also potential for improvement on the Brazilian real. This should benefit us against what we’ve assumed.

We’ll go next to PJ Juvekar with Citi.

Hi, this is Patrick Cunningham on for PJ. Good morning, everyone. So with the current run-up in corn prices, what does that mean for your seed costs next year and pricing next year, given that this season’s pricing was fixed back in the fall? And also how much of your corn production is hedged for next year? Thanks.

Yes, I will. So obviously, we’re worried about getting the last 85% of this season’s crop in the ground. But we are working hard on 2023. Price is one of the most important factors that impact seed costs. We’re looking closely at that right now, and there is clearly going to be a headwind on a year-over-year basis. It’s not as simple as saying the commodity prices were X and now they’re Y. There are several factors, including our hedging approach that impact that.

We’ll go next to Joel Jackson with BMO Capital Markets.

Hi, this is Alex Chen on for Joel Jackson. Thanks for taking my question. With respect to higher crop prices and inflation, how are you seeing farmers' demand change with respect to crop chemicals? Are there any particular buckets of products where demand is seeing stronger/weaker trends, and maybe why? Can you elaborate on when you expect costs to fund out for crop protection? Thanks.

Hi, Alex. Good morning. We'll ask Robert King to answer that question for you.

Yes, Alex, thanks for the question. When you look at our portfolio and what we're doing, you're beginning to see the new products starting to show up in the marketplace. That technology is something that's adding value at the farm gate. In terms of moving forward, we're working heavily on the robust pipeline, and continue to do so. As Chuck mentioned earlier, our Spinosyns manufacturing is under expansion, and we'll finish about a 50% capacity increase there as well. So overall, we're going to continue to balance this moving forward with price and productivity for the rest of the year in the crop protection area.

To build off that, we’ve got a very strong preference from customers for products that will make them money. We always have a strong mix on the premium side, and I think that's reinforced here. The other element we’re considering as we go into 2023 is the crop mix being planted, which is going to continue to shift, depending on what is produced in other parts of the world. Right now, it appears that the mix for 2023 may be favoring corn a little bit more than what we saw as we came into 2022.

Look, we said that the fundamentals are going to be very strong. If you look at crop commodity prices, what it's telling us is that the world needs to produce more food. Farmers are in a good financial position. Predictions are that this year would be a record revenue year for U.S. farmers and the second most profitable year in the last decade. There’s a high motivation to get that crop planted and protect it. We think we are well positioned as an integrated company to catalyze this trend and to help farmers drive productivity sustainably.

Chuck, maybe just one other point. Robert, that’s embedded in our responses. Part of Alex’s question had to do with cost outlook. Our expectation is that when looking at leading indicators, all point to continued inflation, so we’re not counting on any meaningful abatement anytime soon. One of the things Robert and his team are very focused on is the resiliency of our supply chain. Ours ranks very strong in terms of delivery and results, particularly with all the geopolitical pressures and other factors at play.

We’ll go next to Steve Byrne with Bank of America.

Yes, would like to drill into seeds a little bit more here. You reported your corn seed price up 6% or 8% and soybean up 6%. Given your Pioneer business, you would know exactly what your customers are ordering. How much of that eight and six or maybe a zero is specifically just North America? How much would you say is like-for-like price increase versus a mix shift up the price card? Are you seeing your customers change the genetics of what they're planting a little more than they have in the past? Would you expect them to perhaps do even more of that in 2023? The EMEA corn pricing gains were pretty significant; can you comment on how much of that seed business is transgenic?

In terms of the price level we’re capturing, it's similar to what we would have taken to the marketplace in terms of movement in our price card as we came into the year. There are no significant shifts in our trait mix. The genetics and products that we’re selling today are performing very well. Typically, our turnover in our lineup is 20% to 25% new and improved genetics. The productivity that farmers are striving for comes from enrolling these new genetics, and normally that occurs every year. This isn’t just unique for this year. In terms of Europe, very limited seed in EMEA would be transgenic; nearly all non-transgenic seed. The same dynamics around new and improved genetics are at work. Europe is a little impacted because of the Turkish Lira, getting more pricing due to the devaluation, which skews numbers in Europe a bit.

We’ll go next to Michael Piken with Cleveland Research.

Hey, good morning. Just want to dig a little bit deeper on the soybean side. You mentioned that Enlist might be about 40% of the acres. What percentage of those acres are actually going to be sprayed with Enlist herbicides? And then secondly, if you could talk about how the transition toward Pioneer bred and Enlist genetics is going for this year and what your target is for next year? Thanks.

Great question. We’re excited about the adoption of the system. As we sit here today with a relatively small amount of the crop planted, we’re holding on to that original guide around at least 40% of the U.S. soy acres being planted with an Enlist E3 variety. Why we can't update that right now is we only have so much visibility to what the 100 licensees are in the marketplace, what they're ultimately selling. When the planting season is over, we’ll better understand the situation. We’re over 80% treated with the Enlist herbicide—a very high utilization. Three seasons into Enlist E3 soybeans, we can confidently say it’s become a trusted option for growers, and we don’t see that slowing down. This season is important for us, and we’ll be conducting extensive demonstration trials of new Corteva-developed E3 varieties, which we aim to ramp up for 2023.

Good morning. This is Lucas Beaumont on for Josh. I just wanted to go back to crop protection pricing a bit. Yours has accelerated into double digits. In the market, we’re seeing fragmentation where certain products are up very significantly and others more modestly. Can you discuss the mix and pricing you’re seeing across your portfolio, and how you think CPC pricing will evolve through the rest of 2022? When do you expect pricing to peak given it's already quite elevated? Do you think it will accelerate or decelerate into the fourth quarter, and your exit rate?

Yes, we did have a good start in Q1, and thanks for recognizing the margins. As you look at where we are, our new products are starting to show up, this mix is helping us improve productivity and value. Looking ahead, we do expect some headwinds, especially as our business shifts to the South and into Latin America. Our new products like the Spinosyns will help improve our offerings around the world. We expect to continue balancing inflation with cost increases with price and productivity to offset those. Overall, we expect margin to hold across the year.

Hey, good morning. Looking forward to Iowa in September for sure. Since the last conference call, you guys have made the move to a single headquarters in Indianapolis, you've spoken about the new organizational structure and mentioned that optimizing support costs, etc. I was wondering if you could size how we should be thinking about productivity improvements for the company, and how the pace of that layers in over this year and next year.

So look, I’m very pleased with the strategic direction of Corteva. The company is uniquely positioned regarding our products, brand portfolio, innovation pipeline, and the science and innovation competencies we have. Our customer and channel reach is truly unprecedented. We’re working on providing clarity on our strategic direction, placing accountability into our culture, streamlining our product portfolio, and enhancing performance to maximize speed. This work is progressing nicely.

Our last question comes from Arun Viswanathan with RBC Capital Markets.

Arun – operator, you can go to the next question. We can’t hear Arun.

Okay. We'll go to our next caller from Adam Samuelson with Goldman Sachs.

Yes, thanks. Good morning, everyone. Coming back to the discussion on Enlist and the move of that into the higher-end Pioneer Germplasm. Can you just help us think about the market share for higher-end Pioneer Germplasm where it sits today? Has there been a loss in market share due to the Extend trait in it that you're no longer prioritizing? How do we think about rebuilding market share for your own Germplasm and soy, that includes the Enlist trait moving forward?

The products we're selling today are highly valued, and Pioneer has been supportive of Enlist E3. Our reach in the soy market with our brands is in the mid-30s, with the majority being Pioneer. We have a strong reach in the marketplace with our owned seed brands and have over 100 licensees in the marketplace selling Enlist E3. As we ramp up our proprietary genetics, it will have a strong impact on the performance of our products and customer experience. We are very confident that will positively affect our financial performance as well. And that concludes today's call. We thank you for joining and for your interest in Corteva. We hope you have a safe and wonderful day. Thank you.

This does conclude today's conference. We thank you for your participation.