Good morning and welcome to Corteva's third quarter 2023 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 join the Q&A session. We have prepared 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 in the Risk Factors section of our reports filed with the SEC. We do not undertake any duty to update any forward-looking statements. Please note in today's presentation, we'll be making references to certain non-GAAP financial measures. Reconciliations of the non-GAAP measures can be found in our earnings press release and related schedules, along with our supplemental financial summary slide deck available on our Investor Relations website. It's now my pleasure to turn the call over to Chuck.

Thanks, Kim. Good morning everyone and thanks for joining us today. Just over a year ago, we unveiled a strategic framework to enhance Corteva's competitive position while achieving margin expansion and long-term value creation. What we didn't know at the time was how important the efficient execution of that plan would be in delivering continued earnings and margin growth in 2023, a year with no shortage of complicating geopolitical, macroeconomic and ag-specific factors. We're making good progress towards our 2025 earnings and margin targets despite these challenges. Through the first nine months of the year, we generated over 120 basis points of margin expansion. What sets us apart is the strength and balance of our Global Seed and Crop Protection portfolio and our continued focus on controlling our controllables. Our Seed business is delivering exceptional performance in 2023 and is set up for continued growth with our pipeline of technology in new hybrids. For 2024, we will roll out over 200 new hybrids and varieties around the world after more than 300 in 2022 and 2023 combined. This is helping farmers around the world increase yield and production, which is reflected in our price for value strategy. Thanks to the continued success of our Enlist platform, where last quarter, we announced having become the number one selling soybean technology in the US, we're expecting to deliver royalty reduction benefits in 2023 of approximately $200 million with another $100 million expected in 2024. This is about a year ahead of our plan to achieve royalty neutrality. And just last week, we announced our next series of Enlist E3 soybeans in North America that builds off our industry-leading A Series performance. More to come on this soon. In Corn, we are delighted to say that we now have a decade view of corn trade technology, which represents a robust market opportunity, including out-licensing, all of which will translate to significant value creation. We're also running ahead in cost and productivity across both of our businesses. Last September, we estimated cumulative run rate savings of $400 million, and we're now set to deliver over $300 million in 2023 alone. And today, we're announcing the next steps in the plan to optimize our global crop production network. The plan includes the exit of production activities at our site in Pittsburgh, California as well as ceasing production at other select locations. These actions will strengthen our competitive position in the market by improving our cost base and increasing supply agility. Dave will describe the plan in greater detail but I'll highlight that we're estimating annual run rate savings of approximately $100 million by 2025 that should significantly enhance our competitiveness and our customer service globally. Overall, the ag markets remain constructive but mixed. Global ag fundamentals remain positive with farmer income still above historical levels. Destocking and crop protection appears to be largely behind us in North America, with an uptick in orders from the channel, but we expect destocking to continue through the current season in Latin America and the upcoming season in Europe. Underlying farmer demand in terms of applications is on track with historical trends. However, just-in-time order patterns, which are most pronounced in Brazil will likely persist into 2024. So, what does all this mean for the remainder of the year? Our current expectation is that our 2023 full year results will still deliver operating EBITDA growth and over 100 basis points of margin expansion. While responding to the local pressures we're experiencing in Brazil, we remain committed to long-term value creation, including returning cash to shareholders as evidenced by the $750 million in share repurchases this year. Turning to the market outlook. We're seeing solid global demand for agricultural production. Global demand for biofuels in 2023 is at a record level, and we expect continued growth in 2024. Global production of many key crops is estimated to be up versus the 2022-2023 crop year, including corn and soybean. Although current USDA estimates for the most recent crop year show it would be the fourth consecutive year of below-trend corn yields in the US, we're starting to see a rebound of US ending corn stocks due to an increase in planted area. This comes after several years of tight stock levels driven by weather challenges. However, total corn and soybean stocks, excluding China, are not back to pre-pandemic levels and are dependent on critical southern hemisphere production, which is even more apparent in soybeans where Brazil is a critical exporter. Meanwhile, corn production in Europe remains markedly below pre-conflict levels, particularly in the Black Sea region, where Ukraine production is down 30%. Brazil is really a tale of two crops. Soybean area is expected to be up in the 2023-2024 crop year based on relative production economics between soybean and corn. Extreme weather varying by region and driven by the El Nino transition are adding an additional level of complexity to current USDA and corn and crop area estimates. This is all factoring into our latest operating assumptions that both summer and safrinha area will be down. Although the combination of factors at play in Brazil this season are quite complex, this is part of the global agricultural markets ongoing balancing of supply and demand, which is expected to also result in a modest shift from corn to soybeans in the US in 2024. To wrap up, we believe we have one of the most competitively advantaged ag technology portfolios in the industry. We believe our performance over the past three years speaks for itself. Since the beginning of 2021, our revenues are expected to be up about $3 billion, while delivering an increase of over $1.2 billion of EBITDA. But what perhaps is even more impressive is EBITDA margin improvement approaching 500 basis points. No other company in our space has come even close to that level of performance. And there's even more to come. And now, let me turn the call over to Dave.

Thanks, Chuck and welcome everyone to the call. Let's start on Slide number 6, which provides the financial results for the quarter and the year-to-date. You can see from the numbers that we continue to deliver operating EBITDA growth and margin expansion despite the mixed market conditions that Chuck outlined. Briefly touching on the quarter. Sales and earnings were largely in line with our expectations. Organic sales were down 13% compared to prior year, with seed pricing gains offset by volume declines in both Seed and Crop Protection. Lower seed volumes were driven by lower expected planted area and delayed farmer purchases in Brazil and an earlier operational finish to the season in North America. Crop Protection volumes were impacted by approximately $95 million in product exits. In addition, we saw inventory destocking in both North America and Latin America and delayed farmer purchases, particularly in Brazil. Turning to year-to-date, sales were down 1% versus prior year, with broad-based pricing gains offset by lower volume. Global pricing was up 9%, with gains in all regions and increases in both Seed and Crop Protection. Feed volume was down 5% versus prior year, largely driven by the decision to exit Russia. Crop Protection volume was down 16%, which includes a 5% impact from product exits. Put in perspective, total exits year-to-date represent a $530 million impact to volume. Now, despite the reduction in the topline growth, strong operational performance translated into operating EBITDA of nearly $3 billion year-to-date, an increase of 5% over 2022. Pricing, favorable product mix, and productivity more than offset higher costs in volume and currency headwinds, driving more than 120 basis points of margin expansion for year-to-date. So, let's now go to Slide 7. You can see the gains in the Seed business were offset by Crop Protection market headwinds year-to-date where total company organic sales declined 1% compared to prior year, which again includes a 4% headwind to volume from the exits. Seed net sales were up 7% through the third quarter to more than $7.8 billion. Organic sales were up 9% on strong price execution as we continue to price for value and offset higher input costs. Global seed price was up 14% year-to-date with gains in every region, led by North America and EMEA. Seed volumes were down 5% versus prior year. Gains in North America, driven by increased corn acres were offset by declines in EMEA driven by the exit from Russia as well as lower corn planted area. In Latin America, due to expected corn planted area and delayed planning, the exit from Russia represented a 3% headwind for the Seed segment. Crop Protection net sales were down 10% versus prior year to approximately $5.7 billion. Organic sales were down 12% with pricing gains, more than offset by lower volume. Global crop protection pricing was up 4% year-to-date as the high single-digit pricing gains from the first half of the year moderate due to increased competitive pressures. Crop Protection volumes were down 16% through the third quarter, impacted by channel destocking, a shift in timing of seasonal demand delaying farmer purchases in Latin America as well as more than $330 million headwind or 5% impact from exits. Currency headwind for the total company was 2%, largely driven by European currencies. And finally, the Biologicals acquisitions added more than $280 million of revenue, which is reflected in portfolio and other. With that, let's go to Slide 8 for a summary of the year-to-date operating EBITDA performance. During the first three quarters, operating EBITDA increased approximately $140 million to just under $3 billion. Year-to-date, we delivered more than $1 billion in pricing and product mix improvement. Pricing gains, coupled with improvement in net royalties, productivity and cost actions more than offset declines in volume and higher cost and currency headwinds. Roughly $460 million of net cost headwind was related to seed commodity costs and unfavorable yield impact as well as Crop Protection inflation on input costs. Crop Protection raw material costs were up 5% versus prior year as we sold through higher cost inventory. Market-driven and other costs were mitigated by approximately $190 million of improvement in net royalty expense and $240 million of productivity savings. SG&A spend year-to-date is up less than 1% versus prior year, including nearly $90 million in SG&A from the Biologicals acquisitions. Excluding acquisitions, SG&A is down versus prior year by 3% as we maintain disciplined spending despite year-over-year inflation. Currency was a $228 million headwind driven largely by European currencies. Now as Chuck noted, we're taking several large steps to optimize the Crop Protection manufacturing footprint. You can see more details on Slide 9. Although this analysis has been in process for some time, given the current global macroeconomic backdrop in the crop protection industry, we're taking the opportunity to accelerate these actions. We expect to record pretax restructuring and asset-related charges of $410 million to $460 million through the end of 2024, including $320 million to $340 million of noncash asset related and impairment charges. Cash payments related to these actions are anticipated to be $90 million to $120 million, primarily related to the payment of severance and related benefits and contract terminations. And we're estimating annual run rate EBITDA improvement of approximately $100 million by 2025, which translates to a payback of a little more than two years. Of course, we'll keep you posted on the progress of this plan as we deliver a reliable and flexible cost competitive supply network. Turning now to Slide 10. I want to take you through the full-year guidance. We now expect net sales for the year to be in the range of $17 billion and $17.3 billion or down 2% at the midpoint, including a 3% impact from portfolio exits. This change from our August guide is driven by lower volume and pricing expectations in Brazil Seeds and Crop Protection. We continue to expect over $400 million of net sales for the full year from the Biologicals acquisitions. Operating EBITDA is now expected to be in the range of $3.25 billion to $3.45 billion, 4% growth versus prior year at the midpoint. The updated guidance is driven by lower topline growth, partially offset by productivity and cost actions. These updates translate into an expected operating EBITDA margin of 19.5% at the midpoint of guidance, approximately 100 basis points of margin expansion over 2022, led by the strength of our Seed business performance. Operating EPS is now expected to be in the range of $2.50 to $2.70 per share, down 3% versus prior year at the midpoint. The change in guidance reflects lower operating EBITDA, partially offset by lower interest expense and lower forecasted effective tax rate and lower share count. Free cash flow is now forecast to be in the range of $600 million and $1 billion, with a change in guidance reflecting the lower earnings range and the forecast for higher inventory and lower payables. And as Chuck mentioned, we expect share repurchases to be approximately $750 million for the year, which includes roughly $580 million that we completed through the third quarter.

Yes, absolutely. And I'll just reemphasize what Dave said on pricing. This year, we had exceptional pricing, roughly 14% year-to-date and very broad by crop and geography, a testament to our technology and how we've executed across the board as an organization. Next year, we do expect that to return to more of a typical call it, low single-digit type of a growth on a global standpoint. And looking at where we're at in North America, maybe the setup there to touch on that, including how things are going from a pricing standpoint and what the order position looks like. We do expect a rotation from corn to soybeans, call it, 3% to 4% of the area shifting back. We're well advanced in terms of harvest in North America from a farmer standpoint. And I'd say farmers are very satisfied with our product. And that puts our current order book in a good spot for this time of year, allowing for the shift from corn to beans. That said, the next 45 days are really critical for us as we lock up our business for 2024 and secure payment. But the order position is good, our price position in the marketplace. We've been out there since August in front of customers and putting proposals in place and it's holding strong. So we feel very good about what our opportunity there. And we continue to have excellent momentum in the marketplace in North America. So strong value proposition, strong execution by the team. And so we feel good about how we're setting up for 2024 in North America despite the shift from corn to beans.

Thank you and good morning everyone. Dave, can I just ask you, you made the comment in the slide that you're expecting low single-digit pricing for the company in 2024. It seems like it's driven mostly by Seed, but I'm just trying to get the bridge there because we see pricing in crop chem was down, I think, 4% in the third quarter. You're citing competitive pressures in two of your four major regions, what's the algorithm for next year in terms of getting the total company to flat? Is crop chem going to be positive? Or is it going to be down slightly? And then is the Seed order book giving you confidence in the US that you're going to achieve kind of mid-single-digit-ish price on the Seed side of the equation to get us to low singles for the total company?

Good morning, David. We're currently navigating a dynamic market. I appreciate your question, and we'll provide more details as we finalize the results for 2023 in February, which will allow us to discuss 2024 with more specifics. Right now, the entire Corteva team is focused on achieving the $4.1 billion to $4.7 billion target with 21% to 23% EBITDA margins. While I won't disclose exact figures, I can say we're feeling optimistic about being within that range. Consider the challenges we've faced over the last two years, including the war in Ukraine, global chemical destocking, and recent weakness in Brazil, a situation we haven't seen since 2015. Despite these challenges, we've made significant progress in areas we can control, as discussed during last year's framework presentation, which included portfolio simplification, royalty neutrality, product mix, and operational excellence. We've advanced on these fronts, and as Dave mentioned in his remarks, we’re sometimes ahead of schedule. Our management team is finding ways to mitigate the market pressures we're encountering. Regarding our 2025 targets, we remain confident that we can stay within range, assuming Brazil experiences modest growth over the next few years. If that growth doesn’t materialize, we’ll need to adjust accordingly. We've effectively offset some weaknesses, as seen in the acceleration of Enlist and our progress on royalty neutrality, which is better than expected. I'm also impressed with our productivity and cost management, especially as SG&A remains stable year over year. Just yesterday, we announced the next phase of our operational efficiency program, which has been under development for a long time. This progress will enhance our operational excellence and cost management. Altogether, while there are always challenges, we're optimistic about staying on track to meet our goals.

Hi, good morning. Thanks for taking my question. I'm looking at your crop chem's manufacturing rationalization plan, can you maybe highlight some of the major changes? You did highlight a high level on the slide last night. Maybe talk about some of the low-hanging fruit, which molecules are you moving externally? Which one did you want to make sure you're keeping internally. Maybe just some really good, maybe a few anecdotes or low-hanging fruit you could talk about that's really driving this plan? Thank you.

Good morning, Joel. I’d like to start by discussing the origins of the program, its framework, and objectives before handing it over to Robert for more specifics. As you know, I brought Robert on board about a year and a half ago to lead the Global Chemical business, and we initiated the program shortly after. We’ve been actively exploring best practices in chemical operations from around the globe, and Robert has been instrumental in this endeavor. This comprehensive review has been ongoing for quite some time, and we are working on several programs that will guide us over the next few years. We anticipate around $100 million in run-rate benefits by 2025, which is a result of our accelerated efforts. However, the most significant advantages from this program are expected to materialize after 2025, particularly between 2025 and 2030. Our goal is to modernize our chemical operations. Safety is a fundamental value for us, and it is a top priority in our objectives. We also aim to enhance our supply reliability. While I believe we navigated COVID-19 effectively, there’s always room for improvement. Cost competitiveness is another crucial factor, as the industry is dynamic, and we need to stay globally competitive. We plan to transition to a more asset-light model, utilizing third-party manufacturing while ensuring supply redundancies, which will be essential. We own important technology that will allow us to manufacture molecules in-house, and we are committed to investing in modernization, including advanced control technologies. Additionally, we plan to adopt the next generation of chemical manufacturing, which will involve modular and flexible technology. The industry no longer requires large volumes from massive plants. As we move into the next generation of chemical production, we need smaller, more agile facilities capable of producing cost-effective products, which will facilitate the shift toward modular manufacturing. That encapsulates our vision for chemical operations. Robert, could you provide some specifics about the announcement we made yesterday?

Yes, the announcement yesterday is a significant step forward for us. When you consider the elements that Chuck outlined, it really emphasizes what we can control. This is a crucial aspect of the strategy we presented at Investor Day, where our goal is to excel in operations, and we take that very seriously. It reinforces our approach of shifting towards a more externally balanced supply with asset-light capital. This will enhance our cost competitiveness and allow our network flexibility to adapt to the constantly changing markets we operate in. We began working on this about a year ago, and as Chuck mentioned, we have had the opportunity to accelerate our efforts due to the current environment. However, we have been focusing on this for quite some time. The implementation of these actions will enable us to drive profitability and significantly improve our competitiveness in the market from a cost perspective, positioning us much further along in our journey.

Yes, good morning everyone. A question on cash flow and deployment. If I consider your updated guidance on free cash flow as well as the remainder on your share repurchase commitment for 2023. It seems like you could end the year with more or less zero net leverage. So two questions would be, is that fair or not? And more broadly, Chuck, what are you thinking about deployment for 2024 and beyond?

Why don't, Dave, you talk about the numbers and then I'll answer the deployment question.

Yes. Kevin, so yes, thank you, Chuck. So Kevin, exactly. I think you're right. Just to refresh, we've updated the free cash flow guide as of today to that $600 million to $1 billion for the full year. Really, the difference as we pointed out in the prepared remarks really has to do with some higher inventory levels as a result of reduced volume outlook as well as lower payables, which goes with what Robert also stated just in terms of managing our current production capacity in light of the market demand or overall volume. So, your estimate about essentially being zero net debt, I think that's a reasonable forecast at this stage when you think about where we are in translating that cash flow. And it does include, as we mentioned, the $750 million of share buyback for this year. Chuck, do you want to comment a little bit about 2024?

Yes, sure. So, Kevin, the way we're thinking about it, the $800 million at the midpoint that Dave provided and then the strength of this balance sheet, we have a lot of financial flexibility as an organization. We also have an A- credit rating. So, when you put all that together, and we've made very good progress, I think, on managing our working capital. It's been challenging because of the destocking that went through the global industry. But we don't think that next year will require, Dave, a significant investment in working capital. In fact, it could be a source of cash.

Yes, definitely.

When you put all that together, we think that there will be incremental free cash flow in 2024. So, your question is a good question, how are we thinking about it? And the way we're thinking about it is we think that the formula that we've got right now works. We prioritize organic growth in the organization. And as you know, we're increasing investment in R&D. We're absolutely committed to that. We think it's the right thing to do longer term. But we also are now returning a significant capital to shareholders, which we have been a very good track record of doing that. And this year, 750 is a testament to that. And I would expect these decisions are obviously board decisions, but I would expect that the formula that has served us well, I think, is something that we will certainly have a very good look at going into 2024. The other area, though, will be in organic growth. So, last year, we made two acquisitions in Biologicals, and I'd say we're very pleased about the performance. Even in this market backdrop, the Biologicals businesses are performing very well, and Dave gave some of those numbers today. And even next year, these businesses are expected to grow double digits. So, we would be looking for other acquisitions or mergers or commercial relationships in the biological space for sure. And then, of course, any other opportunities that we think would drive long-term shareholder value. And so I think what you're going to expect to see is really a balanced approach to the allocation of capital. Organic growth, some inorganic growth perhaps and return of capital.

Good morning. I'm interested in your thoughts on chlorpyrifos now that it's back in the news. The courts have rejected the EPA's decision from a couple of years ago and are allowing it again. I recall that you stopped producing it a couple of years ago. Do you have any updated insights on chlorpyrifos in light of the recent rulings and what your future strategy may be regarding it?

There has been no change in our thinking, Frank, at this time. We made the decision to exit this business, which aligns with our overall portfolio criteria today. I appreciate your question, but there is no real update or change in our perspective.

Thank you. Do your crop chemicals have registrations that dictate their manufacturing locations? If so, does that pose a challenge when closing facilities, as you'd need to revise the respective registrations in different countries and crops? Or is that not a significant issue for the plants you're focusing on? You mentioned Pittsburgh, California, where you produce your nitrogen stabilizer, which shouldn't be affected by registrations. Is that correct? Additionally, do you have any insights on the destocking process you've experienced this year, especially considering a competitor who doesn't appear to face the same challenges? Is there a fundamental reason why some companies find this more difficult than others?

Yes, Frank, you're correct. All of our products require registrations, which are associated with their manufacturing locations and applications. One of our key products is Optinyte, a nitrogen stabilizer produced in Pittsburgh, which is marketed under the brand names N-Serve and Instinct NXTGEN. Both are recognized as leading products in the nitrogen stabilizer market and represent a solid business for us. We are planning to relocate the production of this product, and we are committed to ensuring that our customers continue to receive uninterrupted service during this transition. This move will position us better to meet market demands for this product in the future. Registration is a significant aspect of our planning whenever we make product relocations. We typically build redundancy into our operations, and we have various plants registered for these products. The transition process, including the necessary registrations, is all part of our plans and timing. So, to answer your question, it's certainly something we must address, and it's always considered in our planning as we adjust our operational network.

And Steve, regarding the global CP destocking, it seems that every participant in the industry has been engaged in this to some extent. Are there lessons learned? Certainly. Looking back, were there signs of a buildup in the channel? Yes, there were. We closely monitor this data and have significant insights into what is being placed in the channel. Over the past couple of years, it has been evident that demand in farming has been stable, which is a positive observation that persists today. However, there was a higher influx of product into the channel than what was being sold out, which was noticeable. Internally, we have discussed how these orders came from well-established partners who effectively manage their inventory. These were indeed legitimate orders. Reflecting on this, I don't think we overlooked it. There was perhaps an expectation that on-farm demand would continue to rise, which did not occur, but demand has remained quite steady. If I had to pinpoint one area of concern, it would be what we currently observe in Brazil. While the US destocking seems to be largely behind us, with a few exceptions, Brazil still faces high channel inventories, indicating a distinct situation.

Thank you. And next, we'll go to Jeff Zekauskas from JPMorgan. Please go ahead.

Thanks very much. There are two questions. In terms of your operating cash flow, you're $460 million behind where you were last year when you generated roughly $900 million in operating cash flow. So, to get to the bottom of your operating cash flow range of $1.2 billion, you've got to do $3.8 billion in the fourth quarter versus roughly $3 billion last year, and your inventories are higher and receivables are higher and payables are lower. Can you really get to that to the bottom of the range? And then secondly, on a normal basis, what should your operating cash flow be in general or relative to your EBITDA? It gyrates so much positively and negatively.

Yes, those are good questions. There's a lot of free cash flow to be generated in the fourth quarter. However, when examining the year-over-year changes, it's significantly related to a slowdown in receivables, which makes sense given the revenue outlook. While days sales outstanding have increased slightly, they remain within healthy parameters compared to historical averages. Additionally, we are reducing inventories due to declining volumes and a decrease in procurement linked to those lower volumes. Therefore, both receivables and inventory will be sources of cash on a year-over-year basis in the fourth quarter. On the flip side, payables will be a headwind. Deferred revenue hasn't changed much compared to the prior year, so it isn't significant in this context; it's primarily a working capital issue. Regarding our desired run rate, I'll focus on free cash flow rather than cash from operations. After capital expenditures, we believe it's reasonable to aim for free cash flow building to 40% and then 50%. Looking ahead to 2024, we anticipate positive contributions from working capital, and there may be a slight increase due to the previously mentioned factors. While there are some variables regarding cash outflow for the Crop Protection business year-over-year, we expect next year to be a strong one for cash flow. Thanks for the question.

Yes, thank you. Good morning everyone. I wanted to maybe come back to the Brazil destocking and Crop Protection volume outlook a little bit more closely. And maybe just can you be a little more clear on what the volume expectations would be for Brazil and Latin America broadly in the fourth quarter on volumes? And how at this juncture, are you thinking about the shape of that volume through 2024 given what potentially could be more carryover inventory if channel inventories are still high and planted area, especially for corn isn't actually growing?

So, Dave, would you like to address that and I can add some comments?

Yes, we expect some growth in the fourth quarter in Brazil, particularly in crop protection. This is mainly due to the comparison with last year, which saw a much more accelerated order and sales pattern. Last year, we experienced a significant increase in orders for Brazil compared to this year. For 2024, our initial thoughts suggest that we might see flat or muted volume growth year-over-year. We anticipate that some macro conditions from the second half of this year will persist.

Yes. Adam, the way I think about this is if you think about Q4, CP Brazil, the midpoint of the guide or the guidance range we're going to see continued weakness both in volumes and CP in our business and price because of the influence that that Dave just described. And the channel still has to go through some destocking. So, the way to think about Q4 is continued weakness in terms of volumes and some stress on price because of the destocking that we expect will continue at least into the first couple of quarters of 2024 because the channel is destocking, the rate of destocking, though, is just lower than we had expected. And so when I look at this, I'd say we're going to get to a destock Brazil. I can't tell you exactly when. But from a planning perspective, going to assume that at least for the first two quarters of 2024 that we're going to see some weakness when it comes to overall volumes because of the destocking.

And let me correct because I was looking at another data point when I referenced the Latin America Crop Protection, we're actually going to see volume declines in the fourth quarter in Crop Protection. So correct that.

Thanks and good morning everyone. I just wanted to follow up on competitive dynamics in Brazil. Specifically the shift to more generic supply? And how do you think this is going to evolve in terms of long-term competitive status of that market and also pricing next year?

At the highest level, we still believe Brazil is an excellent market. It's one of the few markets worldwide that will continue to see production growth, and Corteva is fully committed to this market. Since 2015, when we last experienced a slowdown there, soybean acreage has increased by about 30%, and corn acreage by roughly 40%. It has been a strong growth market that has benefited many companies. However, the Brazilian market has never been on a steady upward trajectory, nor do I expect it to become an easy place to do business. There will likely be times of pause or even regression. Nevertheless, we remain highly committed to Brazil. When it comes to generics, let me clarify what we mean. These are organizations that produce active ingredients without any local representation or service, which is crucial. They typically ship the bulk ingredient into the country, hoping it will be picked up by distributors or, often, go directly to large farmers. This is how we define generics, and they have always been part of the global crop protection market, albeit a larger segment in Brazil. Recently, we've noticed a new level of pricing aggressiveness within the last three months. Many of the generics are now priced below their full costs, which raises sustainability concerns. There are many reasons for this, but it's essential to note that many of these active ingredients are older chemistries, which can lead to resistance issues. Most farmers want service and, particularly in Brazil, technology is significant due to the insect and disease pressures. While farmers might use generics for a short while to manage costs, in the long run, there will be an increasing demand for differentiated technology, especially when supported by high levels of service. We do not see this as a fundamental change in the market, but it is a current reality we must address.

Good morning and thank you for taking my question. I wanted to ask if you could provide some insights into the other markets. We have focused extensively on North America and South America, but I am interested in the dynamics of EMEA and Asia-Pacific for 2024. You've given us a framework for North America and Brazil along with some commentary. Can you share anything about EMEA and APAC? Thank you.

Yes. Let me provide some context before I turn it over to Tim to discuss Seed and Robert to cover CP. As mentioned in our prepared remarks, the fundamentals remain strong despite some mixed signals due to weakness in Brazil. There has been a record demand for biofuels, and feed demand is significantly high in North America. Global stocks are beginning to rise slightly. Overall, we anticipate that farmer dynamics will remain healthy, which is exactly what we are observing. Farmers are focusing their investments on yield and production and are managing their resources effectively. We haven't noticed a major change in buying behavior, apart from the consistent trend of just-in-time purchasing. The overall agriculture market fundamentals are in good shape. Tim, could you provide insights on the regions in Seed before we move on to CP?

Yes, Chuck. In EMEA, our results this year show significant volume pressure but very strong pricing. Given the volume decline, the results are excellent, although we need to consider that a significant part of the decrease in Europe was due to rush. We also noted a general reduction in corn planting this year as stranded corn from Ukraine made its way to Europe, putting pressure on local commodity prices, which led to farmers planting less corn. Looking ahead to next year, I see the situation stabilizing. While it’s not necessarily a recovery, stabilization from a European seed perspective is a positive development. I won't go into North America since we covered that, but regarding Latin America, this year was heavily impacted by destocking in Brazil, which affected the summer and safrinha planting areas. There is a recovery in Argentina, though they still face some weather challenges. As we move into 2024 and 2025, we expect to get past this season and anticipate that Brazil will absorb the stranded corn that has been affecting commodity prices, allowing for a return to more typical recovery patterns.

I will explore our Consumer Products division. This year, we will begin anew in the EMEA region and, looking ahead, we are observing a strong demand for our high-technology molecules and new products. However, the regulatory landscape and social pressures in Europe present unique challenges that we do not encounter elsewhere yet. Nonetheless, our products are performing strongly in that market. For instance, we have a herbicide designed for cereals that is performing exceptionally well, benefiting from its low application rate which aligns with the environmental regulations there. This product can cover two hectares with a single pack, leveraging advanced technology. Furthermore, as we advance, there are significant opportunities in Europe through acquisitions in the Biologicals sector, which we anticipate will lead to growth in the coming years as we obtain new registrations and launch new products. There is a substantial demand for innovative solutions from growers, particularly in the fruits and vegetables sector in Europe. Therefore, we are making remarkable strides in this region. We believe we gained market share last year and are positioning ourselves for a successful year ahead.

We anticipate solid growth in the Asia-Pacific region. The markets are generally robust, though somewhat influenced by weather conditions. In India and South Asia, there is healthy demand for corn and oilseeds, particularly hybrid mustard. While there's a bit of weather dependence, the overall fundamentals are strong and our businesses are well-positioned.

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.