Corteva, inc (CTVA) Q3 2021 Earnings Call Transcript

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Corteva, inc (CTVA 0.80%)
Q3 2021 Earnings Call
Nov 4, 2021, 9:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Corteva Third Quarter Earnings Call. [Operator Instructions] At this time, I would like to turn the conference over to Jeff Rudolph, Director of Investor Relations. Please go ahead.

Jeffrey Rudolph -- Director of Investor Relations

Good morning, and welcome to Corteva's Third Quarter 2021 Earnings Conference Call. Our prepared remarks today will begin with introductory remarks by Chuck Magro, Corteva's newly appointed Chief Executive Officer; followed by an overview of the quarter and year-to-date financials from Dave Anderson, Executive Vice President and Chief Financial Officer. Additionally, Tim Glenn, Executive Vice President and Chief Commercial Officer; and Rajan Gajaria, Executive Vice President of Business Platforms, will join the Q&A session.

We have prepared presentation slides to supplement our remarks during the 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 for or statements 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 Securities and Exchange Commission.

We do not undertake any duty to update any forward-looking statement. On our Investor Relations website, you can find our earnings press release and related schedules along with our supplemental financial summary slide deck, which is intended to supplement our prepared remarks for today's call. These items provide a reconciliation of differences between reported GAAP and non-GAAP financial measures and should not be considered a substitute to the measures of financial performance prepared in accordance with GAAP.

It is now my pleasure to turn the call over to Corteva's Chief Executive Officer, Chuck Magro.

Chuck Magro -- Chief Executive Officer

Thanks, Jeff, and thank you to all those joining us on the call and webcast today. I'm honored to be speaking with you after having spent the last several days getting to know the team. Before I provide some early perspective, let me first say thank you to Jim Collins, who is guiding me through the transition over the next several weeks. I have known Jim for a very long time, and it is a privilege to build on the strong foundation he laid for long-term growth at Corteva with culture and innovation at its core.

Now I recognize it's only day four, so Dave will walk you through the quarterly results and the full year outlook, but it's important for me to first share some thoughts on why I believe that this is an unparalleled opportunity to lead at Corteva. Starting first with the strengths of the franchise, which I believe is an industry leader in terms of balance and differentiation. In my experience in this industry, I always admired and respected how Corteva worked so closely with farmers to consistently provide best-in-class technology to drive value.

And further, the breadth and depth of Corteva's portfolio is impressive, as it scale reaches all parts of the globe in a competitively advantaged way. This is why I believe, when combined with strong execution, Corteva can be the industry leader for years to come, which brings me to my second point, operational performance. This quarter's results attest to what this team has built at Corteva: a commitment to operational excellence and efficiency has kept the company's supply chains open in the midst of ongoing disruptions; and a culture focused on delivering for customers and keeping each other safe has kept the organization on track meeting its commitments.

This is another quarter of revenue and earnings growth, which are a direct result of the strong foundation this team has built over the past 2.5 years. Over the past few days, I've spent a lot of time listening to and learning from my team. And I can already say this team is fully equipped to deliver on what we all know this company is capable of. From the expertise of our commercial and operations teams to the deep capabilities of our R&D organization, it is abundantly clear to me that through the combination of the company's strong culture and organizational strengths, we are well positioned to capitalize on the opportunities that lie ahead.

So to summarize, tremendous assets, operational performance and an excellent team are only a few things I am really excited about and what attracted me to this opportunity. I understand your expectations, and I am confident we will deliver. We have the IP, the commitment to operational excellence and the customer relationships necessary to deliver long-term solutions to global issues, while serving the best interest of our shareholders. We will always continue to deliver innovative and productive solutions for farmers, expand opportunities for our employees and build long-term value for our shareholders, all with sustainability as a priority.

And with that, let me now turn it over to Dave to take you through the results and the updates to our guidance.

Dave Anderson -- Executive Vice President, Chief Financial Officer

Thanks, Chuck. In behalf of the Corteva team, I'm going to say we're all very excited to have Chuck join us at this time. It's a terrific position for the company, and we've got tremendous value that we can deliver. I want to welcome everybody also to the call. Let's start on slide five, which shows our financial results for the quarter and also year-to-date. Starting on the left side of the chart, you can see it was another solid three months of continued growth and margin improvement.

Compared to the prior year, we delivered 24% organic growth, gains in both seed and crop protection, led by Latin America and North America. In the quarter, we saw accelerated demand from customers, particularly in Latin America, which translated into an estimated $100 million in sales in the quarter that was previously forecasted in the fourth quarter. Looking at earnings, we delivered seasonal loss of $51 million of operating EBITDA in the quarter, which is an improvement of greater than $120 million compared to the prior year.

Turning to the year-to-date results. Organic sales were up 9% to just over $12 billion. The growth was led by continued demand for new products, driving more than $330 million in growth from new crop protection products. Seed sales improved on increased planted area in U.S. soybeans and also strong demand for corn in Latin America. EBITDA of $2.31 billion year-to-date, up 25% compared to the same period last year. And year-to-date pricing coupled with volume gains more than offset cost headwinds, driving nearly 220 basis points of margin improvement compared to prior year.

And this is particularly impressive given the challenges we're seeing in global supply chains and the cost inflation we continue to face. And we believe it's a clear differentiator for Corteva. Let's go then to slide six with more detail on our global sales growth. Here, you can see the balance and diversity of the global business in the results. In North America, organic sales were up 5% through the first three quarters. Seed sales benefited from increased planted area for both corn and soybeans as well as the continued penetration of Enlist E3 soybeans.

Consistent with last quarter, Enlist E3 represents about 35% of the U.S. soybean market in 2021. Feedback from growers and performance to this point is quite positive. Corn price was up 2% while soybean prices were down 3% as we continue to see competitive pressure in that market. North America Crop Protection delivered year-to-date organic sales of 10%. Demand for new technologies, including Enlist, herbicide double digits. Price increased 3% through the third quarter on price execution in response to rising input costs, including raw materials, freight and logistics.

In Europe, Middle East and Africa, we had strong organic sales growth of 7%, resulting from price execution and record sunflower seed volumes. This growth was muted by an approximate $80 million to $100 million sales impact from corn supply shortages in '21. In Crop Protection, the portfolio of new and differentiated products remain in high demand, including technologies, such as Arylex herbicide and Zorvec fungicide, which enabled us to drive price, volume and gain market share in Europe despite the impact of discontinued products.

In Latin America, we realized 27% organic sales growth on strong volumes and price gains, driven by execution on our price for value strategy, coupled with increases to offset rising input costs. In Seed, volumes grew 16%, driven by market share gains in Brazil safrinha and earlier shipments for the Brazil summer season. In Crop Protection, volumes grew 18% on significant demand for new and differentiated technologies, such as Isoclast and Jemvelva insecticides.

In Asia Pacific, we delivered 7% organic sales growth compared to prior year with both volume and pricing gains. Seed volumes were down largely due to COVID-related demand impacts, particularly in Southeast Asia and India. Crop Protection organic growth of 11% was led by continued demand for new products, including Rinskor herbicide and also Pyraxalt insecticide. Let's move now to slide seven for a detailed review of our operating EBITDA performance through the third quarter. Through the first nine months, operating EBITDA grew more than $460 million to approximately $2.3 billion.

This was driven by strong organic growth with combined price and volume benefits of more than $600 million as we continue to benefit from new and differentiated products against a strong market backdrop. We recognized pricing gains in both segments in all regions during the period. Global corn price was up 4% year-to-date, demonstrating the value that we bring to customers.

Sales of new Crop Protection products grew more than $330 million versus the prior year and price increased 4% for the segment, which helped offset higher raw material and logistics costs. With respect to increased costs, we recognized roughly $350 million of market-driven cost headwinds year-to-date as well as $70 million of increased compensation costs and investment spend to support growth. This was partially offset by approximately $200 million in productivity initiatives, resulting in a net cost headwind of $220 million through the first three quarters.

Very importantly, disciplined execution while managing through complex supply chain dynamics translated into more than 200 basis points improvement in operating EBITDA margin through the first nine months of the year, again, a clear differentiator. Let's go now to slide eight where I'd like to discuss the current state of the global supply chain. Like other companies and, obviously, various industries, we continue to face supply chain challenges and cost inflation and to reiterate the theme we discussed at the end of the second quarter, we believe these challenges will continue through 2022.

We've seen the cost of some of our key raw materials and co-formulates increased more than 20% in the past year, driving expected overall cost inflation to low to mid-single digits as a percent of our cost of sales. In addition to longer shipping times, we've also experienced additional downtime from supply constraints, in part due to the more than 60 force majeures declared directly from suppliers or indirectly from other raw material suppliers.

Now to help offset the impact of inflated input costs, we're utilizing operational levers, such as pricing and very focused productivity initiatives. As an example, on October 1, we announced on average mid-single-digit price increases in the U.S. on the majority of our Crop Protection products. This includes externally sourced glyphosate, where we expect our pricing will be up approximately $90 million for the full year. Now just for context, glyphosate sales represent less than 5% of our total annual Crop Protection Sales, but the inflation impact has been significant.

With this backdrop, it's impressive that we're achieving attractive performance measured by on-time delivery to customer requests. The agility and flexibility that our teams are demonstrating has enabled us to capitalize on evolving market conditions, including increased demand for both Seed and Crop Protection products. With that, let's go to slide nine. I'd like to provide the update on our full year 2021 outlook. We're raising our full year revenue guidance. We now expect reported net sales in the range of $15.5 billion to $15.7 billion, up 10% at the midpoint over 2020.

We feel confident in this growth based on strong market fundamentals, continued demand for new and differentiated products globally in both Crop Protection and Seed segments and price execution in all regions, coupled with pricing for higher input costs. Mostly as a result of market-driven factors mentioned earlier, we're raising our estimate for full year costs by $100 million for the year, predominantly in Crop Protection. We're now expecting a total increase of $475 million versus prior year.

In addition to these headwinds, we also expect increased SG&A and R&D costs of about $50 million, which includes spend for increased compensation as well as investment spend to support growth. Importantly, we're reaffirming and affirming the full year expectation to deliver operating EBITDA in the range of $2.5 billion to $2.6 billion for the year, an improvement of 22% over 2020 at the midpoint. This translates to approximately 150 basis points of margin expansion for the full year.

And lastly, we're now forecasting a base tax rate in the range of 18% to 20%, coupled with a lower average share price count due to our share repurchase activity. We have increased our operating EPS guidance to a range of $2.05 to $2.15 per share for the year. Let's now let's go to slide 10 and focus on 2022. As you can see on slide 10, we've given you our initial planning framework. And you recall that we shared this with you last quarter. It's intended as a reminder of the key assumptions as we frame out the '22 plan, including organic revenue growth, Seed pricing versus commodity costs, strong penetration of new products, royalty cost improvement and continued cost inflation, partially offset by productivity initiatives.

Importantly, this is all with a backdrop of continued strong market outlook and solid grower economics, which will drive customer demand in 2022. Turning to slide 11, aligning with our midterm EBITDA target range for 2022. On the left of slide 11, we've shown you at a high level, the bridge from our 2021 operating EBITDA guide to the EBITDA range implied by our midterm targets. Now let's go to the right side and cover a few of these key points.

Market fundamentals remain positive, and our early views are that U.S. corn and soy acres will be approximately 180 million in total with a slight shift to soy based on relative economics at this time. Outside of the U.S., market growth looks strong in markets like Brazil where planted area is expected to increase 4% to 5%. In terms of organic growth, we expect that the global seed portfolio will continue to deliver on our price for value strategy where we expect 2022 pricing to be in excess of estimated seed cost headwinds from higher commodity prices.

Crop Protection new and differentiated products, including Arylex and Enlist herbicides and Isoclast insecticide will be a primary driver in delivering above market in that segment. Turning to our early assumptions on costs. We've increased our estimate of Seed commodity price impacts and expect to see Seed cost increases in the range of $250 million to $300 million, largely driven by North America and Latin America. As I mentioned earlier, we expect Seed pricing to outpace these costs in 2022. In Crop Protection, market-driven inflation will continue through 2022. And we expect cost headwinds of at least $150 million.

This includes the impact of the sell-through of inventory and continued cost inflation as a result of the supply chain conditions we've already discussed. It's too early to comment on when we think costs will level off. However, we will be using operational levers, such as pricing and productivity initiatives, to mitigate cost headwinds. This provides additional transparency into our preliminary planning for '22 and how that bridges to our midterm target EBITDA range.

Put simply, price and volume will be critical to earnings and margin growth against the backdrop of strong customer demand and also continued cost and supply chain challenges. We will be providing more specifics during our fourth quarter earnings call in early February and communicating the full '22 guidance at that time.

And with that, I'll now turn the call back over to Jeff.

Jeffrey Rudolph -- Director of Investor Relations

Jeffrey Rudolph, Corteva, Inc.-Executive of IR five

Thanks, 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.

Questions and Answers:

Operator

Thank you. [Operator Instructions] We'll take our first question from Vincent Andrews with Morgan Stanley.

Vincent Andrews -- Morgan Stanley -- Analyst

Thank you and good morning, everyone. Nice to chat with you again, Chuck. You have a very unique vantage point on this coming from Nutrien and obviously being one of the largest ag retailers. And you competed with Corteva on the Seed side of the equation. You had Loveland and you competed with everybody on your proprietary products over there.

So you highlighted everything that you thought was the strengths of the company, but where do you come into this with from the outside as a prior competitor, thinking that there are some things that you need to firm up or some things that could be done a bit better differently or where some blind spots are that you have that unique vantage point on it, you can come into the organization and really hit the ground running with?

Chuck Magro -- Chief Executive Officer

Yes. Thanks for the question, Vincent. And it's good to talk to you again. So first of all, what I'd say is I'm really excited to be joining such a great company and an awesome management team. You're right. So I know Corteva. I know Corteva because they were a top-tier supplier to the Nutrien. And what I'd say to you, though, is in the last couple of days, I've spent time with the Board of Directors, a lot of time with my team. And I've seen some of the operations already in just a short period of time.

And certainly, everything that I've seen, it's exceeding my expectations. So my early impressions are extremely positive. I've had a good look at some of the elements of our technology pipeline. Obviously, I'm able to see it from a unique vantage point now. So I had a peek under the hood. And I will say that there is a growth engine here, a very impressive growth engine. The manufacturing footprint, when I look at it, probably the last two quarters have been the hardest in our industry in many, many years, and our supply chain is holding up.

There's quite a bit of resiliency and that's because of the diversity that I've certainly seen. There will be focus areas, of course, that I will start to talk to the team about. But it is only day four for me. So I just want to say that I'm excited to be here. And some of the areas that I'm going to work with the team on just to give you sort of a flavor, of course, our customers are -- we're going to put them first. This company has already done that, but we have a unique set of advantages and core competencies with our technology and our supply chain and everything we do, we're going to put our customers first.

Second is sustainability, climate change, reduction of acreage, things that really drive yields and improve performance for farmers. These are some are things that I think Corteva is uniquely positioned to, is to really drive the sustainability agenda for agricultural farming around the world. And then finally, we have some commitments out there. We're going to deliver on those commitments. So the execution of the strategic plan will become a very top priority.

And if you've heard me talk before, I'm a very big believer in controlling what we can control and that we really want to be known as the best operator in the industry. Because I think that really complements our technology platform. So hopefully, that gives you a bit of color of some of the initial impressions and some of the things that the Corteva team was already talking about but will be of interest to me as well as I integrate myself with this wonderful team.

Operator

We'll go to our next question from Joel Jackson with BMO Capital Markets.

Joel Jackson -- BMO Capital Markets -- Analyst

Hey, Chuck. Chuck, what do you think the Chinese potash contract is going to settle at? No, no, I'm just kidding. I'm just kidding. I'm just kidding. But previously, you've moved from one part of the industry to another part of the industry, and you put out this slide deck on day three on the job, fair enough. But I want to know these are targets that Corteva has had for some time for 2022.

You called them initial planning framework, planning framework, whatever you want to call them. But Chuck, you're probably going to be judged on whether you hit these numbers next year. And so I have to believe you must have had a lot of comfort level that you can hit at least the midpoint of this guidance range with maybe some cushion above it to want to own these numbers. Can you specifically, if possible, talk about that and your confidence that you can hit those numbers?

Chuck Magro -- Chief Executive Officer

Sure, Joel. Nice to hear your voice again. Look, so the management -- I have confidence in the management team. I'll tell you that right now. The team did reaffirm the outlook. I was certainly involved in that. And I will tell you that there is a lot of focus across the company throughout the world on those -- on the outlook numbers. And it is only day four, As I'll just remind you, I will plan to dig in on the fundamental assumptions from the ground up.

Obviously, I haven't had time to do that, but I will say a couple of things. There is a lot of potential in this company. There are a lot of catalysts and levers that are within the management team's control and that they are highly focused on, which will drive long-term value creation for shareholders. The other thing is, look, we believe that the agricultural backdrop is still going to be quite positive as we enter 2022. We've got good planted acreage we expect in corn and soybeans next year. We're going to see increased acreage in Brazil.

I think that when we look at farmer economics, they're still very constructive. Your potash question, I'm going to keep to the side. But overall, we think that the backdrop for the ag markets are quite positive. And then if you look at what Corteva can do within its control in terms of price, new products extension of its channel strategy, these are all things that the management team is highly focused on. And when you add it all up, that's why we felt it was important to at least put the outlook numbers out there. And just to reiterate, I will look into it in a lot more detail, but I have confidence in this management team.

Operator

Our next question from P.J. Juvekar with Citi.

P.J. Juvekar -- Citi -- Analyst

Hi. This is Patrick Cunningham on for P.J. Good morning, everyone. You mentioned growth from biologicals. And Chuck, you briefly touched on that growth engine. You mentioned 17 new launches in '21 and '22. How big is this business for you? And where do you think it could go in five years?

Chuck Magro -- Chief Executive Officer

Hi, Patrick, Yes. So look, I'm going to have Rajan talk to that because he'll give you the details. From my vantage point, obviously, we have some very unique technology in this area. It is a market that is growing. It's becoming more and more important when you think about it through a sustainability lens. It's quite an interesting market, but it requires unique science and technology to really deliver for customers. And I think Corteva is going to be a real winner in this area. But maybe, Rajan, you can talk about the specifics.

Rajan Gajaria -- Executive Vice President, Business Platforms

Sure, Chuck. And thank you for the question, Patrick. When we think about the opportunities in the biologics business, the first message I want to leave with you is, we see this as an integrated play with the rest of our Crop Protection business. So I think that's -- the strength of our Crop Protection franchise, coupled with where we are headed with biologics, is the reason for our optimism. Our strategy, I would say, I will explain three prongs to it.

The first part is in-licensing very unique technology, and our team has worked to get more than 10 of these signed up in the last 12 months where a lot of our optimism is coming from. And these are global companies, companies from Israel, France, Brazil, Spain, to name a few. So very strong in-licensing. The second thing we are working on is we've got a very strong commercial organization which I know you're familiar with.

We are working to build capabilities within our commercial organization, supply chain, formulation and packaging and, last but not the least, R&D to continue to supplement the in-licensing technologies that we get. And with Chuck on board now, we will continue to explore opportunities to have bolt-on acquisitions with the support from the Board to see how we can further accelerate. So really, a very exciting space for us.

We do have a very strong franchise in the natural products, like you're familiar with the Spinosyns franchise is already more than $800 million. So we are familiar with this space and really looking forward to seeing how further launches will help us continue to accelerate the growth.

Operator

We'll go to our next question from Kevin McCarthy with Vertical Research Partners.

Kevin McCarthy -- Vertical Research Partners -- Analyst

Guys, good morning. Congratulations to you, Chuck. A couple of questions. First, on the financial side. You increased your free cash flow guidance by $300 million on the low end to $550 million. Can you talk through the drivers of that, presumably working capital played a role? And I'd be interested to know how much you view as structural versus transitory? And then secondly, on the fundamental side, one of your competitors has been quite vocal about short-stature corn. I'd be interested to hear your thoughts on that subject and whether that might play a role for Corteva in the future?

Chuck Magro -- Chief Executive Officer

Hi, Kevin. Yes. Dave can take the question on cash, and Rajan then will follow up with short-stature corn. Go ahead, David.

Dave Anderson -- Executive Vice President, Chief Financial Officer

Yes. So Kevin, thanks very much. So on the cash flow, you recall, you may have referenced the previous cash from operations slide that we had or guide rather that we had of 1.2 to 1.6. We're now at 1.7 to 1.9. So it reflects a couple of things. I think, number one, as you know, we have focused a lot on basic operational disciplines around cash and particularly on working capital. So there's a portion of this back to your structural that's really related to that in both receivables and also in our payables area.

Those are two areas we've really been working on and deploying talent and the right disciplines and systems to support that. So those are important contributors. We've also increased the amount of prepaid assumption just in terms of the liquidity that our customers have and just what we're seeing already, in terms of cash coming in, related to that.

So you could say that as more, call it, temporary as opposed to structural. We've also got some improvement in terms of net income with the lower tax rate that we've guided to, and that's part of, as you know, our EPS guide increase also reflects a little bit more on the EPS front, as you know, reflects some -- a little bit lower share count compared to what we had in there previously, given the strength of our share buyback program. So that's really it in a nutshell.

And so it's a distribution, to your point, in terms of structural and more temporary. But the structural part is very, very important in terms of what we're going to be able to deliver. We feel confident in that updated guide, and that's obviously very supportive of our shareholder value objectives. And then the second part of that?

Rajan Gajaria -- Executive Vice President, Business Platforms

Yes. Sure. I'll take that. Kevin, this is Rajan. Kevin, thank you for your question on short-stature corn. When you think about the whole breeding engine that Corteva has, as you know, Corteva has the best germplasm in the world. The whole pool of germplasm that we have is something that we continue to build on. Innovation and the expenditures that we have on breeding is the strongest investment that we make in our Seed business. There is multiple tools that we have in the breeding area.

Short-stature corn is definitely one of the areas that we are focused on, but not limited to. We have a very strong history of improving the yield improvements, whether it's 1.5% to 2% year-over-year of not only getting the yield improvements but also being extracting value from that. So looking forward to sharing some more details with you in some future innovation days, but short-stature corn is on the list of things that we continue to innovate in and we are looking forward to sharing the progress.

Operator

We'll go to our next question from David Begleiter with Deutsche Bank.

David Begleiter -- Deutsche Bank -- Analyst

And Chuck, congrats as well on the new role. Just two quick questions. First, Chuck, what's your view on the soybean pricing pressure you're seeing and the company's strategy to deal with that pressure? And maybe for you, Dave, just on the Crop Protection pricing, how sustainable are these prices if and when raws do moderate or roll over? Thank you very much.

Chuck Magro -- Chief Executive Officer

Yes. Thanks, David. Look, so I've always been impressed with -- as a customer with Corteva's Seed technology. We are seeing very solid demand in corn and soybeans; really strong demand in line with our expectations for the Enlist lineup. And Tim can take the specifics around the pricing. So go ahead, Tim.

Tim Glenn -- Executive Vice President, Chief Commercial Officer

Yes. Thanks, David. Good questions. So on the soybean market, we've been talking about this for a number of years. The markets have been competitive, and they remain very competitive. But I think when you look at where we're at, we've had very good momentum, and I'll speak on a global standpoint, from a Seed standpoint, we've been able to capture about 3% year-to-date globally on seeds and in some segments, even more like corn, where we're at about 4% globally year-to-date.

We have launched our pricing in most of the Northern Hemisphere, including soybeans. And consistent with the past, we're taking a leadership position in terms of capturing value for our strong product performance. And as always, it's a strong -- it's a very competitive marketplace. No doubt about it. And we will -- we're going to continue to execute against our strong value proposition.

We have a strong, disciplined organization in terms of managing our pricing process and the feedback on our products. We're in the middle of harvest still, but feedback on product performance has been very good from a genetic standpoint. And the demand for our E3 platform is extremely strong. So we're feeling good about where we sit. And as always, we'll deal with the competition. When you think about CP pricing and where we're at there, we've been working hard to build a strong execution capability on pricing there as well.

And throughout the year, we've been very proactive to ensure that we're capturing value for our technology and also helping to mitigate the inflationary pressures that are out there. And I would say that we've been, I think, on the leading edge from an industry standpoint, probably first mover as soon as the first quarter of this year in terms of repricing to try to manage to those escalating prices. For commodity products like glyphosate, it's very dynamic.

And we're going to continue to price that on an ongoing basis and really focus on ensuring that we offset all the inflationary cost pressures that we're seeing there. Excluding glyphosate, we've been able to capture about 3% year-to-date across our Crop Protection portfolio. In some categories on our most differentiated products like the Spinosyns, we're up about 8% year-to-date, which is really outstanding. And we're going to be proactive.

We're going to be strategic as we wrap up 2021. And then as we set the stage for 2022, we've already implemented pricing for most of the Northern Hemisphere in 2022. And again, our expectation, as Dave said earlier that we've implemented roughly mid-single-digit pricing across most of our portfolio in North America. And we're going to continue to focus on that, continue to remain very disciplined. And obviously, as we work through and deal with more pressures, we're going to continue to offset those as they come forward.

Operator

We'll take our next question from Chris Parkinson with Mizuho.

Chris Parkinson -- Mizuho -- Analyst

Great. Thank you very much. Chuck good to have you back. As we head into '22, you just hit a little bit on this. But can you just further comment on regional CPC pricing, the potential for incremental contributions for new product volume after a strong '21 performance thus far? And then also just Spinosyns momentum. So just any regional color would be appreciated on those factors. Thank you so much.

Tim Glenn -- Executive Vice President, Chief Commercial Officer

Yes. I'll jump in there and talk about that. And obviously, our markets are very local. So when we talk about CP pricing. I'll talk about it in an aggregate basis, and we report it on an aggregate basis, but we are pricing locally. It's based off individual products, formulations and what their fit is in the marketplace. And our teams are focused on ensuring that we are as locally competitive understanding that we've got these global headwinds that we're constantly dealing with. So we are going to be dynamic. In most of the world, like I say, isn't such a driver of price.

So it is our differentiated products that our teams are focused on. And when we talk about that 3% year-to-date price increase and when we talk about the mid-single-digit price increase that we've already implemented in the Northern Hemisphere for next year, that is across our new and differentiated products as well. So it's something that we're going to continue to focus on. We will execute that locally, knowing that we've got these global headwinds that we're dealing with.

And in terms of the contribution from new products going forward, it's been a huge part of what's helped us continue to perform above market on the Crop Protection side in most parts of the world and will be again in 2022. So we've got a robust pipeline. We've got great new products like Isoclast and Arylex and Zorvec, which are continuing to accelerate their growth pattern. We continue to get new registrations. Literally every month, we're getting new registrations and some new products will be a very important part of our 2022 plan.

Operator

We'll take our next question from Jeff Zekauskas with JPMorgan.

Jeff Zekauskas -- JPMorgan -- Analyst

Hi, good morning. It's Silke Kueck-Valdes for Jeff. How are you?

Chuck Magro -- Chief Executive Officer

Great. Thank you.

Jeff Zekauskas -- JPMorgan -- Analyst

I was wondering whether you can speak about the Conkesta E3 launch in Brazil. Like how a ramp-up of that might look like? Like it's probably very small for the initial growing season. But I was wondering if you look two or three years out, how many acres do you think you might achieve? And secondly, I was wondering that kind of also like one more time, ask you the cost price issue for 2022.

So in general, like the outlook that you have for 2022, that to me doesn't look that strenuous. Like if you can have, whether it's a 3% or 4% or 5% price increases on sales of $15.5 billion, like that should offset more or all of your costs. And so having EBITDA growth in 2022 shouldn't be that difficult despite all of the cost headwinds? Or do you see it different than that? Because I see much more optimistic than I hear in your voice. Thanks.

Chuck Magro -- Chief Executive Officer

Two parts to that. Do you want to go first?

Tim Glenn -- Executive Vice President, Chief Commercial Officer

Yes, I'll jump real quickly on the Conkesta question. So obviously, we were very excited in August when we were able to announce that we received authorization from the European Union that enabled from Conkesta E3 to be exported for food and seed use. So as a result, we have a limited launch of Conkesta E3 right now in Brazil. Farmers are able to plant product for the 2021-'22 season. So it's an important step forward.

What I would reinforce, though, is that it's really not a meaningful financial impact as we look at '21 or '22 as we're working on ramping up production, building out our lineup and ultimately, we've got to go out there and gain customer support and drive adoption of the technology. So over time, no doubt this technology is going to drive incremental growth for us. It's going to greatly enhance our competitive position in the Latin American soybean market, which is important for us. And we're excited to bring new choice to the marketplace, and the marketplace is excited to have a new choice in terms of technology as well.

So -- and then over time, we're also going to introduce this in other markets, such as Argentina, Paraguay and Uruguay. So it is something very important. We have not sized what we see the adoption rate as at this point in time, but I understand it's a limited launch, and it really is about establishing that technology and gaining support from our customers.

Dave Anderson -- Executive Vice President, Chief Financial Officer

Yes. So this is Dave. I'll take the second part of that related to 2022. As you said, and Chuck really, I think, articulated it well, it's a really constructive setup when you look at 2022 with the backdrop of our markets and the strength of what we're bringing -- continue to bring to the market. And as you said, on price, we continue to execute against our strategy of pricing. Both Rajan and Tim have spoken about that and spoken to some of the specifics.

And again, specifically for 2022 related to Seed, we expect global pricing to be accretive to earnings after the impact of higher cost of goods sold. And by the way, again, just to emphasize, we've increased that seed cost of goods sold in the range of $250 million to $300 million now. So that's very important. And on crop, we expect to continue the momentum we've seen in 2021.

And -- but very importantly, there's two really important things here. Number one is the market-driven inflation and logistics costs. Again, I'm going to just underscore that we anticipate to be at least $150 million. And we've seen this progression over the course of 2021, obviously. And we expect supply chain challenges to continue just to underscore that through 2022. So these are -- some of what we see is sort of the balance against that constructive backdrop and the strength of what we're bringing to the marketplace and our ability to continue to drive, if you will, value pricing in the marketplace.

So we're going to get into those details. As I said, when we release our fourth quarter earnings, 2021, we'll provide more specific guide, but it's really, call it down the middle there in terms of the set of positives and constructive setup, what we're bringing to the table and then this, if you will, inflation impacts that we're seeing in the very dynamic nature of that. So we appreciate your question and look forward to that update when we can provide more details.

Operator

We'll take our next question from Steve Byrne with Bank of America.

Steve Byrne -- Bank of America -- Analyst

Yes. Thank you. I got a follow-up for you, Tim, and that is about your seed orders for '22 in the U.S. Where would you position them at right now? Are you close to having half of those orders in given where we are in the harvest and any trends that you can comment on whether there's a mix shift in germplasm or traits or perhaps even a mix shift in acreage between corn and soybeans?

Tim Glenn -- Executive Vice President, Chief Commercial Officer

Yes. Thanks, Steve. And where we're sitting right now is -- I would characterize this as kind of the middle part of our booking season in North America. We go out and see customers, call it, September 1, more or less, is when we begin to move in the marketplace. And that booking period really extends through the end of the calendar year. And so we will expect by that time to have the majority, nearly all of our order position in place by the end of the year.

So we're sort of in that middle position right now. And I'd say that orders are tracking well with where we would expect to be right now for both corn and soybeans. In terms of technology shifts, if anything, I would say that in Enlist E3 demand on the Pioneer side is running a little bit stronger than maybe what we had originally planned as we came into the year.

In terms of the acre mix between corn and soy, I think it's very preliminary and way too early to make a call based on our orders right now. Customers are going to go through the next several months and really have to figure out on an individual basis what their crop mix will be. And Dave made the comments about where we see the market going into next year, roughly that 180 million planted acres between corn and soy in the U.S. that's there. And right now, when you look at the corn soy ratio, it's about 2:7, which isn't so -- which is actually pretty neutral, I'd say, on a year-over-year basis, but it feels like the economics are saying that we could trend a little bit more toward soybeans in terms of that 180 million mix than last year. Can't call it off the order position.

I'd say the corn technology mix is consistent with what we would expect it to be. Farmers have been planting high-technology seeds and continue to want to do that. And really, I'd say where we sit today really supports what Chuck and Dave have already talked about in terms of a setup for '22 in terms of good, healthy markets, and also very strong demand for our technologies.

Operator

We'll take our next question from John Roberts with UBS.

John Roberts -- UBS -- Analyst

Thank you. Two questions on pricing. And welcome back, Chuck. On Crop Protection pricing, it ranges from flat in Asia Pacific to 5% in Latin America. Does that basically track where the new products are having the most impact? Or is there something else behind the range in pricing like the bundling rebates with seeds?

Tim Glenn -- Executive Vice President, Chief Commercial Officer

Yes. John, I'll take that. In terms of the -- that element, I would say Latin America clearly has helped -- has been benefiting from good strong healthy economy as well as that impact from new product technology. I don't think you can lay it only on that because actually, we've got -- We've had some good technology adoption in Asia Pacific as well. So good strong product introductions. It really comes down to where we sit in those local markets. And again, we are dealing in very competitive markets. And actually, on a year-to-date basis, APAC is not flat.

They're more like 2% year-to-date. So we do have some growth there as well. So I would say it's the markets themselves, it's the timing of when we would have executed the sale. And of course, that is very dynamic. Latin America is certainly more weighted toward the second half of the year, and we would have taken more pricing actions, I would say, to help mitigate some of the inflationary pressures that we've seen as the year developed and been able to realize that from a LATAM standpoint. But I wouldn't say it's only because of the product mix or anything like that. I think it could be timing and then that local competitive situation that you're facing in those markets.

Operator

And we'll go to our next question from Michael Piken with Cleveland Research.

Michael Piken -- Cleveland Research -- Analyst

Yeah. Hi. I was just wondering if you could give us an update in terms of your Enlist platform in terms of what percentage of your Enlist sales next year are going to come from your own germplasm? And how broad, I guess, your scope is going to be geographically? Specifically wondering about the Southern United States and that market for Enlist next year as well. Thanks.

Rajan Gajaria -- Executive Vice President, Business Platforms

Thank you, Michael. I'll take that. This is Rajan Gajaria. So first and foremost, just taking a step back. The overall adoption of the Enlist system really continues to meet our expectations. The demand at the grower level across the U.S. is really very strong. And as we think about our own germplasm, we've got a very strong pipeline of new products coming through. Most of them are going to start hitting in '23, '24, but we are going to start making an impact in 2022.

So the germplasm is going to continue to grow within the Corteva germplasm as the trade gets integrated into our own portfolio. That said, I think the overall adoption is going to be higher than what we had said in 2021. As you know, we had expected about 30%, and we grew to more than 35%. And looking at the 2022 setup, we continue to see that continuing to grow. Some of the challenges that we have had in the South with Dicamba continues to be a challenge.

But when we look at the Enlist herbicide performance, I think we continue to get encouraged there. The South is lagging in terms of adoption. But as we continue to work on the different varieties, how they are available, and we talk about the Dicamba challenges, I'm very optimistic that we'll be able to make some progress there, too. The bigger issue in the South, as I'm sure you're familiar, Michael, is more about the entrenched Dicamba capabilities that are there. And as we work through some of those things, I think we will get to where we need to relate it to the listed option.

Operator

We'll go to our next question from Arun Viswanathan with RBC Capital Markets.. And Arun, your line is now open. Please check the red button. Due to no response, we'll take our next question from Frank Mitsch with Fermium Research

Frank Mitsch -- Fermium Research -- Analyst

Yes, good morning. Congratulations, Chuck. Looking forward to seeing you on Monday. You mentioned that your second priority was on the sustainability front. And during the quarter, Corteva announced that they did a carbon capture initiative, joint venture with Indigo. And I was wondering if perhaps someone on the team can talk about what the financial ramifications of this or how does it fit into your current product offerings? And any sort of initial feedback that you've received from this?

Rajan Gajaria -- Executive Vice President, Business Platforms

Frank, this is Rajan, I'll take that. Early days related to the whole value capture from a carbon perspective, but we are really excited about the relationship that we have gotten with Indigo. We had a pilot program plan for getting to 100,000 acres this year, and we are going to exceed that. But as you think about sustainability and as we think about where the whole value proposition for farmers is going to go, it's too early to say this is what the price of carbon is going to be. And that really is going to be one of the biggest assumptions that there is.

But the technology that Corteva brings from a digital standpoint will help to make sure that we are tracking the behaviors that the farmers are going to change. The partnership with Indigo brings capabilities that they have in terms of measuring the actual impact and get all this validated with third-party bodies in there. So we are really excited about the possibilities and creating more opportunities for our farmer customers to get additional revenue. Too early to comment on what the financial impact of that is given the infancy of where we are at.

Operator

And our last question will come from Aleksey Yefremov with KeyBanc Capital Markets.

Aleksey Yefremov -- KeyBanc Capital Markets -- Analyst

This is Paul on for Aleksey. Just one quick one. What is your current outlook for Seed royalties in 2022?

Rajan Gajaria -- Executive Vice President, Business Platforms

Yes. This is Rajan. I think taking a step back, if you talk about our seed neutrality journey, we will continue to be on track for that. The seed royalty reduction in '22 will be in the similar ballpark to what we have done in 2021, give or take, around $50 million. But the important thing is that all the elements in play for us to continue to work with the royalty reduction are there, of which the Enlist adoption that we have been talking about is a big part of it. So that's how we look at our royalties for 2022.

Operator

And that will conclude today's question-and-answer session. Mr. Rudolph at this time, I'll turn the call back to you for any additional or closing remarks.

Jeffrey Rudolph -- Director of Investor Relations

Great. Thank you. We appreciate everyone joining the call today. And again, thank you for your interest in Corteva. Have a great and safe day. Thank you.

Operator

[Operator's Closing Remarks)

Duration: 55 minutes

Call participants:

Jeffrey Rudolph -- Director of Investor Relations

Chuck Magro -- Chief Executive Officer

Dave Anderson -- Executive Vice President, Chief Financial Officer

Rajan Gajaria -- Executive Vice President, Business Platforms

Tim Glenn -- Executive Vice President, Chief Commercial Officer

Vincent Andrews -- Morgan Stanley -- Analyst

Joel Jackson -- BMO Capital Markets -- Analyst

P.J. Juvekar -- Citi -- Analyst

Kevin McCarthy -- Vertical Research Partners -- Analyst

David Begleiter -- Deutsche Bank -- Analyst

Chris Parkinson -- Mizuho -- Analyst

Jeff Zekauskas -- JPMorgan -- Analyst

Steve Byrne -- Bank of America -- Analyst

John Roberts -- UBS -- Analyst

Michael Piken -- Cleveland Research -- Analyst

Frank Mitsch -- Fermium Research -- Analyst

Aleksey Yefremov -- KeyBanc Capital Markets -- Analyst

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