Good morning, and thank you for joining us. I'm Kim Booth, Head of Investor Relations for Corteva. It's great to have you here with us today. 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. We'll open up this morning hearing from Chuck Magro, Chief Executive Officer; Tim Glenn, Executive Vice President, Seed Business Unit; Robert King, Executive Vice President, Crop Protection Business Unit; Sam Eathington, Executive Vice President, Chief Technology and Digital Officer; and Dave Anderson, Executive Vice President and Chief Financial Officer. We'll then proceed to a joint Q&A session with these leaders. For those of you in the room, we will wrap up the day with an R&D showcase.
During this call, we will make forward-looking statements, including, but not limited to, our expectations about future financial and growth targets, product development pipelines, and our strategic and capital allocation plans and strategy. These statements regarding our expectations about the future are based on current assumptions and expectations 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 at this event and in 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'll be making references to certain non-GAAP financial measures. Reconciliations of the non-GAAP measures can be found at the end of this presentation, along with our supplemental financial summary slide deck available on our investor relations website.
After a short video, Chuck will take the stage to kick off the day's events. Welcome to Corteva's 2022 Investor Day.
More than 12,000 years ago, the first farmer planted a seed, and out of that grew cities, civilizations, and solutions that enriched the lives of producers and consumers. With a changing landscape, the world has been faced with unforeseen challenges. In the year 2021, nearly one in three people worldwide did not have access to adequate food. As our global population nears 10 billion by 2050, we will need to double food production to meet the basic needs of humans across the world. Compounded with climate change and rising food prices, the challenge has never been greater. As the world faces these increasing economic and environmental pressures, global agriculture will need to experience a technological revolution that will enhance the efficiency of farms across the world. At Corteva, we're at the forefront of change.
We are committed to innovating sustainable solutions for farmers worldwide today, tomorrow, and for generations to come. Today, we will uncover the winning strategy that will place Corteva at the center of these challenges, making us the world's most valuable agriculture solutions company. Today, we welcome you to Corteva's 2022 Investor Day.
Good morning, everyone. It's nice to see so many familiar faces. Thanks for being with us today, and welcome to Johnston. You probably all know that this is the home of our global seed business. Since I started with Corteva about 10 months ago, the company has been focused on getting us to this point, so we're pretty excited to share with you what we're thinking. I think we've got a great plan, we've got a great strategy, and I'm more excited today than when I started. Today, we're gonna share with you what's new and what we plan to focus on to accelerate our performance and growth potential of the company. First, let me just take a minute to remind you of the historical relevance of where you are today.
Almost a century ago, just not far from here, a young farmer named Henry Wallace founded Pioneer Hi-Bred. This was the first hybrid seed company in the world. Since then, farmers have experienced a sevenfold increase in yield. For those that are gonna join the field tour today, you're actually gonna see that increase in just a couple hundred feet. It's pretty remarkable. Hybrid seed is one of the reasons why we can feed 7 billion people on the planet today, and this innovation and farmer focus is what makes up Corteva today. As you all know, Corteva came together in 2019. We have a very strong purpose and set of core values, and we're proud to be an integrated ag tech company, and we now have a clear strategic focus. We've delivered a lot of value since then.
The leadership team will walk you through some of the financial performance. I hope you would agree it's quite impressive. I quickly just wanna cover a few comments on the leadership team. We believe that we've assembled a very diverse, strong, experienced leadership team. Many of us are operators or functional experts, and we're all passionate about creating long-term value and shaping the future of ag. I have three key messages for you today. These messages will resonate for the entire morning. First, we have refined our company strategy, our operating model, and our culture, all designed to meet the global challenges of global food security, climate change, and the energy transition, but also driving greater value for farmers and allowing Corteva to reach its full potential.
Second, we've developed a new financial framework for value creation that is largely in our control and will accelerate earnings and margin performance. Third, we have a very attractive long-term growth profile fueled by our innovation engine that is unique and different from others in the industry. Many of you know me, I've been in the ag industry for quite a long time now, and I believe that these three characteristics are what make Corteva very special. Before I dive into the Corteva strategy, let me just take a couple minutes to talk about the ag fundamentals the way we see them. Most observers don't consider agriculture to be a growth industry, but ag demand has grown annually over the last 50 years at an average of 1%-3% per year. While it's modest growth, it is remarkably consistent.
This trend is expected to continue, which you can see on the chart. In fact, we expect growth rates for sustainable products and biological products to grow much faster than the traditional ag products. In fact, by 2035, we are expecting biologicals to make up 25% of the total CP market, largely driven by their favorable environmental profile and of course, the flexibility that they offer farmers. The top right is what Corteva brings to agriculture. In one word, yield. Global yields have increased by more than 30% in the last 20 years, allowing us to produce more with less. The bottom right is an example. It shows the additional area that's needed if we were to hold yields at 2002 levels. The yield increase over the last 20 years has prevented approximately 240 million hectares from being used.
That's equivalent to the average harvested area in the entire Western Hemisphere, or more than 140 billion metric tons of CO2 equivalent a year not emitted because of production and yield. This shows the significance of ag technology and innovation, and to me, this is the mission of Corteva. The short-term outlook is also very positive. We believe the next one to two years should support robust ag fundamentals given the things we've talked about before, tight stocks to use ratios, average, above average price levels, and the strong financial position of farmers. The current market expectation is that global grain and oilseeds markets need two consecutive normal crop years to stabilize global supplies. The current corn yield forecast this season is expected to be below trend yields in North America and in Europe, not allowing 2022 to be a year of restocking.
That is why we are still expecting that these attractive market fundamentals will be with us for a while. Given that market backdrop, let's now talk about Corteva. Let's talk about the decisions that we are making and the priorities that we are setting to create long-term value for our stakeholders. We have refined our strategy to five choices. We plan to do business in 110 countries. That's a reduction of about 35 geographies. We will only focus on markets where there is strong support for differentiated technology. About 20 of these countries we believe are what we consider must win. They will have the full resources and support from Corteva. But there are some other countries in that 110 that we will only sell our technology and have virtually no Corteva infrastructure present.
This represents a much more focused global geographic footprint for our company. We also plan to narrow our product focus to crops that are relevant, large, and have differentiated technology behind them. In seed, that includes corn, soybeans, canola or winter oilseed rape, sunflower, cotton, and sorghum. We will also invest and focus on growing certain routes to market, including licensing and our new and rapidly growing Brevant channel. In CP, the markets will be fruits and vegetables, corn, soybeans, cereal, and rice. Here we will focus on sustainable ag chemistries, where we have differentiated or unique solutions for either the crop or the country. When we looked at our total AI portfolio, we are expecting to reduce our AI portfolio by about 20% as we deprioritize several CP commodity products. Corteva will look much different.
It will be a much more streamlined and simplified company. What does this mean for R&D? Well, first of all, we believe today we have the most productive R&D results in the industry, and we intend to keep it that way. In addition to investing in our core sets of products and technologies, we will also make investments in what we call frontier opportunities to ensure we maintain a leadership position as the ag markets evolve. We've set a target to invest approximately 8% of sales in R&D and innovation. That is an increase from today's levels. These refinements, we believe, will accelerate our performance and our growth. It will also allow us to simplify our overall company structure and reduce cost.
Today we are setting a new financial objective of delivering, on average, 100 to 150 basis points of margin expansion per year over the next three years. How are we gonna deliver this? Well, we are gonna focus on four value catalysts going forward. First, portfolio simplification, which I've described. Focus on core markets and crops where we have a unique or differentiated offering. Royalty neutrality, starting with significant reduction in royalties driven by Enlist, but over time, becoming a significant licensor of technology. Product mix improvement, growing our portfolio of differentiated products, including our Spinosyns and naturally inspired fungicide franchises. And finally, operational improvements across the company, driving price and productivity actions. We now expect to deliver approximately $400 million in savings between 2023 and 2025.
Now, Dave will cover the numbers in more detail, but this is expected to result in low double-digit annual compounded EBITDA growth, and that would take us to somewhere between 21%-23% EBITDA margins by 2025. This is a significant increase from where we started just a few years ago. Let's talk a little bit about R&D. Sam's gonna provide a deep dive into our innovation and technology pipeline, but what I'd say right now is we believe our pipeline is worth approximately $24 billion at peak. If you assume a 45% accretion rate, which is consistent with what we've seen in our existing portfolio over time, that would suggest very significant growth for Corteva well past the 2025 timeline. This makes Corteva an interesting investment thesis.
We are both a value company with strong growth profile right through the next decade. If you look at our pipeline, we evaluate over 3,000 R&D projects annually, and only a handful get sanctioned. The pipeline generates industry-leading return on R&D investment dollars. Let me highlight just a few examples, which you'll be hearing more about today. In corn, we have an 8-bushel per acre yield advantage in the U.S., and our germplasm currently has the world record for corn yield at more than 600 bushels an acre. Our focus goes well beyond yield to include nutrition and, of course, sustainability. In soybeans, Enlist is quickly becoming the market leader in North America, and we expect to take that success to Brazil in the second half of the decade.
In CP, we are focused on operating and creating sustainable, differentiated products, and we plan to launch 10 new AIs by 2035. In addition to focusing on our traditional seed and CP markets, we see tremendous growth opportunities in what we're calling our frontier markets, including biologicals, bio-based fuels, and specialty protein and oils. Biologicals are expected to be the fastest-growing CP segment in the industry. Now, they will not replace synthetic chemistry, which remain important tools for farmers to produce crops. However, biologicals have a growing place in the market as complementary, sustainably advantaged options for farmers. Bio-based fuels are another growth market. We are expecting renewable oils in the U.S. to grow by more than 10-fold in the next decade, really driven by diesel and the aviation market adjustments.
Bio-based fuels are really a global phenomenon as governments move to transition their energy products to sustainable sources. This could be another very exciting future market for Corteva. And finally, specialty protein and oils are anticipated to increase consumer preference as consumer preferences evolve and change. Simply put, people want healthy, nutritious, sustainable food choices, and we believe gene editing technologies provide the potential to accelerate much-needed advancements in this area, and we're excited about those prospects. These three frontier markets represent future multibillion-dollar opportunities, but science and technology will be needed to unlock that potential. We plan to redirect and invest R&D investment and explore strategic partnerships in all three of these areas. I would expect over time generate significant value creation as a result. Shifting gears a little bit just to talk about sustainability.
First, we believe that our strategy is underpinned by four strategic pillars, where we have looked at and we believe we can take a leadership role and, of course, make a difference. First, we're committed to sustainable innovation. Our R&D processes and systems have been modified and enhanced to ensure that sustainable products have a priority through our development process. In fact, nearly 90% of our new products that were launched since 2017 meet our sustainability criteria. We also have more than 1 million acres now enrolled in our carbon program, which we believe is one of the largest and most comprehensive ag carbon initiatives in the industry. We make it simple for farmers to sequester and abate carbon while growing their crops, and we are helping them get paid for their investment in sustainable agriculture.
We also believe that preserving and growing biodiversity is one of the most important focus areas for agriculture today. We accomplish this by focusing on yield. Producing more with less is the key to a healthy biosystem. The perfect example of this is our Enlist herbicide. It was the first product to comply with the EPA's new Endangered Species Act approach, setting a new standard in providing farmers the tools they need to produce crops while reducing the risk to wildlife and habitats. When it comes to greenhouse gas emissions, we have seen an improvement in Scope 1 and Scope 2 emissions. We obviously have more work to do in that area. As an example, in Eschborn, Germany, we're finalizing the construction of a new energy-efficient research center, which is allowing state-of-the-art crop protection innovation while providing minimal impact on the environment.
From an ID&E perspective, let me just say right up front, our people are the most important differentiator we have at Corteva. We're focused on building a culture of belonging, increased representation, and having a positive external impact. We've now set some targets for representation, and we will report on those regularly going forward. Let me circle back where I started. Why Corteva and why now? We have a very unique position in the marketplace. We're a leader in ag technology and are investing to succeed in both our traditional and our frontier markets. We've built a value creation framework, which is mostly in our control to generate meaningful value over the next three years and impressive growth over the next decade or possibly even more. We have a significant financial strength and flexibility, which Dave will cover.
I would like to mention that, the new $2 billion share purchase program we just announced today, this is on top of the $1.5 billion plan we announced last year. I hope that shows the board and the management team's confidence in our plan. Thank you very much. I'll be back to answer questions after the rest of the speakers. Let me turn it over to Tim now to talk about our global seed business.
All right. Good morning again, and once again, welcome to Johnston, Iowa. I'm excited to share the story of our seed business. You know, seed remains the highest involvement purchase for most farmers. Farmers have strong preferences for brands and for channels, and we have a strong track record of building advantaged customer relationships. We have leading technology positions, we have innovations that our customers value, and we look to build on these two things. Finally, we have an excellent opportunity to grow our seed business while continuing to build upon and accelerate our margins. Quick snapshot of where our seed business sat as we started the year with roughly $8.5 billion of revenue. We have strong positions in the most important, highest value markets, with North America continuing to be a point of strength.
We continue to see significant opportunities to grow our business in both EMEA and Latin America regions. Our business is strongly driven by technology and our ability to work closely with customers and capture value for innovations, and we have a clear pathway to royalty neutrality by the end of this decade. Now let's take a look at the global seed market and how we define the addressable market for Corteva. Total seed market is roughly $54 billion with a low single-digit% long-term growth rate. Of the $54 billion, we've defined our addressable market at $30 billion. We get here by taking the crops we choose to invest in and overlay that with the countries where we're active. Corn is the only global crop, and essentially, we lead with corn in every seed, in every seed market or every market where we sell seed.
Corn is really the driver. For the rest of the portfolio, we're very strategic, and in fact, we only sell most other crops in a small handful of countries. The drivers for selection are the size of the opportunity, our ability to innovate and create value, our ability to capture value for those innovations and generate strong margins, plus factors such as the economic stability of the market and the ability to protect our intellectual property, all those things being important. With just over 25% of the value of the addressable market, we do have significant room for continuing to grow our seed business. As you look at our business in the four regions, you can see that corn is the driver of our seed business in all the regions.
We also have important crops like soybeans in North America or sunflowers in Europe that support our position in corn and are very important to our customers. We strive to be first or a strong second in every market we choose to participate. In the most important markets, we've achieved that position. It's important to emphasize our focus remains on capturing a leadership position in the most valuable market segments, and we're highly selective in the markets where we're present. Let's take a step back on the seed journey since 2019. We've been able to deliver a solid 5% top line and 14% EBITDA average growth since 2019 from a financial standpoint.
From an operational standpoint, we completed a global brand rationalization, and in the U.S. alone, we retired 11 seed brands, and we've been able to capture share rate gains in key markets around the world. We've made significant progress on reinforcing our leadership position in germplasm. We've also had very successful trait launches like Qrome corn in North America, Enlist E3 soybeans in North America, and PowerCore Ultra in Latin America. When you look at margin expansion, we have established an internal capability and culture for capturing value on the innovations that we deliver to the market. We streamlined our seed operations, capturing about $200 million of productivity through operational excellence and rationalizing our footprint as we close 27 seed production locations around the world while we continue to support our growth with the remaining footprint.
All of this sets the stage for high teens operating EBITDA growth through 2025. As we've completed our strategic review, we're gonna continue to intensify our focus on the most important markets. Corn and soybeans are identified as core crops, and we're narrowing the focus of our remaining seed crops to the most important markets. This will allow our research and commercial efforts to be further concentrated on those opportunities where we can capture disproportionate high share of value and deliver the best technical solutions and best value to our customers. While some things change, our ability to deliver innovation remains at the foundation of our seed business. It has for nearly a century, and it remains what all customers expect when they commit to plant a Corteva seed brand or purchase seed that contains a Corteva trait technology.
It starts with best germplasm and the ability to create and evaluate over 100,000 new hybrids or varieties every year, knowing that less than one one-hundredth of a percent of those new product candidates will ever be commercialized. We then layer on proprietary trait solutions that protect and enable the seed to reach full potential. Finally, the ability to position those products on a field-by-field basis and to provide agronomic and crop management advice to our customers ultimately helps farmers achieve their production goals. All these factors come together to create value for our customers and a winning formula for Corteva. As I said at the beginning of the talk, seed remains the most involved and arguably most important decision a farmer makes every season. Farmers have strong preferences for how they purchase seed.
We customize how we do business based off of local market needs and conditions, and how we go to market is one of the most important business decisions that we make. The Pioneer brand is present in every country we sell seed, and we support that with the Brevant brand, a global brand that's focused on full-service retail. In a handful of countries, we have other brands that are focused on very specific markets or customer segments. For farmers who choose not to purchase a Corteva-owned seed brand, our germplasm and traits technologies are available through other seed brands, further supporting our market position. This is a very strategic and very intentional brand deployment that ensures that we can achieve our business goals from a financial and operational standpoint and allows us to reach our full potential in every market.
The iconic Pioneer brand has been a leader for nearly 100 years, and it continues to evolve to meet farmer needs today and in the future. At the heart of the Pioneer brand experience is product excellence, along with technical expertise and personalized service that enables the farmer to drive productivity and profitability in their operation. Local representative and agronomists work with the farmer to understand his or her unique needs. Together, they create a personalized plan on a field-by-field basis for the overall operation. This builds off our long-standing right product, right acre approach. It also leads to very strong brand loyalty by farmers and sometimes generational relationships with customers. Our ability to stay close to customers gives us a unique perspective on how markets are changing and on understanding future needs in the marketplace.
While the Pioneer brand has nearly a century of history, the introduction of the Brevant seed brand in 2018 is one of our most important actions since the formation of Corteva. Initially, the launch supported our position in Latin America, where we already had two strong established brands. In Brazil and Argentina, both Pioneer and Brevant brands are now well established as premium brands, and this has contributed to our strong share growth over the past several seasons. We now have years of experience in Latin America to know that we can grow two premium brands in the market with minimal cannibalization or internal competition. Brevant was launched in the U.S. in 2020 for the 2021 planting season.
Since we've successfully gained a foothold in the U.S. retail segment, which makes up roughly 1/3 of all corn and soybean seed purchases in the U.S. Since the launch in the U.S., we built credibility with our channel partners and leveraged the strong relationships that we have with them on the crop protection side. We have a very competitive product line offering that has performed well and satisfied our farmer customers. After two seasons in the U.S. market, we're meeting our internal volume and profitability goals for Brevant, and Brevant will be a major driver of North America corn volume growth in the next three years. It has attractive margins that are comparable to the Pioneer brand.
On the operations side, we have optimized our footprint with in-house capacity that's located close to the market and able to deliver reliable, high-quality supply to support our growth. Aligned with that, we have strategic relationships with third-party seed producers that support our internal capability in an efficient and flexible way. As you can see, the bulk of our seed production costs are incurred in the field. While we'll continue to drive improvement in plant efficiencies, driving field productivity is key to supporting margin expansion. We continue to drive using technology and agronomic and management practices that support increasing the number of saleable units from each production acre.
We'll continue to have a very strong collaboration between research, seed operations, and the commercial teams to ensure a disciplined lifecycle management process, management of SKU or product counts, and balanced inventory levels that support market needs and working capital targets. A significant lever to expand margins for the seed business is the path to royalty neutrality. We have a clear path to drive approximately $600 million of EBITDA growth over the next decade through a combination of decreases in royalty expenses and increases in royalty revenues. Enlist E3 is a significant driver. Initially, as we transition to the trait technology, and now as we move to our proprietary genetics with the E3 trait. Successive generations of trait introductions this decade, plus patent expiry for some of our licensed traits, will also contribute to this on this journey to neutrality.
Brazil's become the largest and fastest-growing soybean market in the world, with well over 40 million hectares in production and no sign of the market growth slowing. It also represents the largest gap in our seed business portfolio, with Corteva having a low single-digit share of this large and attractive market. It's one of the most high-tech seed markets in the world, with over 80% of the market with traits for insect protection and herbicide tolerance and sophisticated growers who are focused on high-yielding varieties. Corteva's launched Conkesta E3 soybeans in Brazil with both insect control and herbicide tolerance that provides growers with another choice with outstanding performance.
This technology is a key part of our strategy to expand our soybean seed share from the very low base in the Pioneer and Brevant brands, and it opens the door for licensing opportunities through collaboration with other breeding companies and seed multipliers. Our objective is to capture about 1/3 of the market by the end of the decade. By building this base of business, we're well-positioned to continue to expand our market share for both traits and germplasm well beyond that in the next decade. The Enlist E3 system has been the most impactful seed technology of this decade, having captured over 45% of the U.S. market since launch in 2019. Most important, over 80% of E3 acres are being treated with Enlist herbicide, ensuring that farmers are receiving full value for their investment in the system.
Also, it is important to note that the adoption has been highest in the heart of the U.S. Corn Belt, with the Eastern Corn Belt region that's circled in green crossing 50% market adoption in 2022, and in the Central and Northern Corn Belt region that's circled in gray expected to cross 50% adoption in the upcoming 2023 season. From a Corteva standpoint, approximately half of our branded seed volume this year was Enlist E3, and we're on a path to around 90% conversion by 2025. We're seeing a rapid acceleration of proprietary Corteva germplasm with the E3 trait being commercialized, with our branded sales moving from approximately 25% Corteva-bred varieties this year to around 95% in 2025. The impact on profitability is meaningful.
As we transition from the Roundup Ready 2 Xtend trait in a Corteva brand to a Corteva-bred E3 variety, we see a tripling of our soybean margins. Finally, many factors will impact the peak adoption of Enlist E3 soybean technology in the U.S. Given the current market and regulatory environment, we believe the technology will reach approximately 60% market adoption by 2025, up from prior estimates of around 50% peak adoption. Finally, just to reinforce what the seed business priorities are as I close. You know, first, it's about focused growth, especially in our core products and in high-value markets. Second, it's about continued product excellence. It creates value for our farmer customers and gives us the opportunity for attractive margins. We're gonna continue to pursue a differentiated customer experience, whether through the Pioneer or Brevant brand, as service is key to success in seed.
Finally, we're gonna maintain a relentless drive to deliver margin expansion through proprietary technology, efficient operations, and being able to create and capture value from our innovations across all points in the ag cycle. Thank you. I look forward to your questions. With that, I'm gonna turn it over to Robert.
Good morning. I'm delighted to be here with you today. You know, as Chuck laid out, we have an exciting future ahead of us to become the best ag technology company in the industry. You know, for crop protection, that means delivering a sustainable, advantaged, and differentiated solutions to the grower. Before we get further into the strategy, let's stop and talk about the market a little bit and the business. You know, in 2021, we delivered about $7.3 billion in revenue and 16.5% margin. As you know, we spread across all four regions, with North America being the largest. This year in 2022, we'll talk about a little bit more in a minute that we've made a significant step change forward as a company.
We'll finish up this year with Latin America being about the same size as North America from a region standpoint. You know, the core strengths of the business thus far have been around a couple of things. One, we've talked about quite a bit is our new product portfolio. You know, these new launches have delivered $1.5 billion in 2021, and we'll be near $2 billion this year as we finish out 2022. The second thing is around this differentiated sales, where we make up 50% of our total portfolio is differentiated. The way to think about differentiated is products that are clearly advantaged in the marketplace in terms of their performance, their value creation, and their sustainability profile. Looking at the market, the global crop protection market is about $65 billion.
Quick math, $7.3 billion in the top right-hand corner there, we're about 11% of market share. You know, the sales by crop, looking again at the top right, matches very closely to the market split, which gives us a good diversified position in the market. Today, the herbicides makes up a little over half of the total sales, and a key driver in this segment is Enlist. Tim talked about the platform. We're seeing a really strong demand for the overall system. For crop protection, about 80% of the Enlist bean acres are getting a Enlist herbicide over the top. Let's talk a little bit about the big row crops while we do talk a little bit a lot about the big row crops, and rightly so, corn, soybean, it's a big part of our business.
It's also important to realize that the largest gross profit and the largest gross margin crop in crop protection is fruits and vegetables. It's shown there in the dark gray. For us, it makes about 9% of the total market share, and these are with the higher margin products that we sell. With the balance of this crop portfolio, we're well-positioned to grow at or above the market for the foreseeable future. Since 2019, the story of what have you done for me lately? Our business has grown by 11% CAGR with EBITDA growing slightly above that. This year, like I talked about, we accelerated our execution in forward. Revenue growth will be in the mid-teens this year, and EBITDA will be about 2x of that.
The areas of our strategy that's providing this accelerated growth includes a few things. First, our ability to introduce new products and technologies. As we said in earnings calls and different discussions, these new technologies are being pulled by the grower. They're being pulled because they're helping growers solve problems that continue to face them today. It's tough being a grower nowadays, and these things are helping make their life easier. Other areas that includes is, you know, our strategy of price for value coupled with productivity. These two things has helped us continue to fend off the headwinds that are coming at us from around the world in the market. Finally, our supply chain organization has performed tremendously well.
First half of this year delivered about 16% more volume on a year-over-year basis in the face of headwinds that we all know has been difficult over the last 12, 18 months, for sure. If we build off successes of the past, plus we put the changes that we're gonna talk about more in place, we believe we have a great future for value creation and growth that will deliver meaningful EBITDA margin results into 2025. As Chuck talked about earlier, simplification, focus, and acceleration, three things that we have to get right. You know, we inherited a lot of complexity from our parent companies, and this caused distractions as well as a lot of non-value-added work. Much like when we grow up, just because your parents did things a certain way doesn't mean that you always have to do them the same way.
Well, that applies to us as well. Simplification across the board is an opportunity that we intend to capitalize on. You know, to become the best crop protection company, we've got to accelerate our ability to deliver differentiated and sustainably advantaged solutions. We've already taken steps in our organization this year to align by business units. I talked to a few of you about that before we even started today. This provides good role and responsibility clarity, as well as it's driving accountability so people know what they need to do to help deliver the overall aspiration. You know, for Tim and I, it is crystal clear what we're responsible for and accountable to. Chuck tells us often. Also it's clear of the importance of us working together closely because without that, we wouldn't be able to maximize the value creation across Corteva.
Our focus in crop protection will be in three areas of execution. We'll focus and simplify the resources to be on five core crops and 20 countries. Historically, we've tried to be everything everywhere. We'll narrow down where we're working. We'll deliver a competitive advantage with our supply chain because we're gonna shift the overall strategy to be more flexible, capital light, and we'll lower operating costs to be more competitive. Third, we're gonna balance the portfolio with new products coming out of the pipeline and filling the gap with strategic partnerships in biologicals and seed applied technologies that will accelerate these two segments in our portfolio. Part of this shift is gonna come from ramping up the innovation engine, where we'll allocate more money into R&D to drive that differentiated portfolio. It'll also come from rationalizing lower performing products.
We're gonna exit about 12 active ingredients over the near term and about 400 formulations during that same time. For example, you would have recently heard a decision to exit the methomyl outside of Brazil and the resulting sale. There'll be more like this as we continue to execute these strategies in the near future. You know, the portfolio shift starts with ramping up our innovation engine and focusing on these five core crops. Over the past few years, we've had a solid track record of launching new products. These products are covering a wide range of crops. By 2024, we'll have 10 new products in the hands of growers that'll help them be able to perform and meet the challenges that they're facing.
Nine out of ten of these will be sustainable innovation will meet the sustainable innovation criteria that you will have seen in our sustainability report. These new products are obviously growing faster than the market. We've talked about them, and you'll see they're about 38, so we'll call it 40% CAGR. These are the ones we talked about will finish up about $2 billion this year in total revenue. Well ahead of the curve that we started out with this on, so we're doing well from that standpoint. When we take these new products, and we spread them across the five core crops, plus our ability to leverage them into other crops when it makes sense and when it's easy.
This puts us in a great position with the momentum to be able to move our portfolio to more differentiated over the next few years. When we talk about a portfolio transformation, this is a key part to our value creation. By 2025, we expect it to be about two-thirds of the total portfolio. This is primarily due to the AI shifts that I've talked about and this continued demand of this new technology, again, that's given the growers a different choice and an advantage in the field. With this demand growth and the differentiated technologies, we're in a very good position to continue our journey to become the best. You'll have seen on the past slide the balanced pipeline that's gonna further build out the segments, okay?
Let me drill down one second on a segment a little bit more. Specifically, I wanna talk about the global insecticide portfolio. I believe the story on this is not well understood, including the competitiveness of the strength of this portfolio. It's all underpinned by the Global Spinosyns franchise. Since 2018, this insecticide portfolio has transformed and delivered significantly more margin expansion. The proprietary technology of this naturally derived insecticide that we call Spinosyns has helped build a strong differentiated portfolio in this segment. The demand of these products continues to increase and push the shift of the overall portfolio more towards differentiation. To help enable this move, recall that we just completed a major capital project. We expanded Spinosyn capacity by about 50%. By next year, Spinosyn will be our first molecule that will reach $1 billion in total sales.
By 2025, we expect this added capacity to be fully utilized. It's products like these that we continue to innovate and improve even after launch that allows us to continue to add value well into the life cycle of the product. You know, another part of this journey is around biologicals. You know, as I mentioned before, we need to build out a balanced portfolio, which includes biologicals that need to be a significant part of this balance. Today, biologicals market makes about $9 billion total in the world. We expect that to grow by more than 3x, about $30 billion by 2035. More importantly, though, this is gonna make up about 20%-25% of the total crop protection market by 2035. We hope that this split is reflected in our portfolio as well.
You know, biologicals is an area that we need to play in, and we need to win if we're ever going to be the best. Additionally, it also fits well with our strengths in crop as well as in seed R&D. It allows us to use that across both. Our existing portfolio of synthetics makes really good formulations that helps the growers in new and unique ways. In parallel, we're also gonna build out our internal capability of biologicals discovery and development in R&D. The final part of this transformation puzzle is deliver a more competitive cost position in operations. Today, we have seven synthesis plants around the world, 10 formulation packaging plants that are positioned regionally near customers. Historically, our parent companies were built on strong internal manufacturing expertise.
Think of Dow and DuPont and what that means in the manufacturing industry and what they brought. To be competitive in today's ag chem world, we've got to pivot and improve our external manufacturing partnerships as well. Our transformation journey is gonna deliver a capital light, lower cost alternative than today. It's gonna include external manufacturing partners that'll give us a better balance of internal and external manufacturing. Today, we're about 25% internal manufactured only. In other words, 25% of our products are only made in our own plants. We'll shift that to about 10%. What that means is we're gonna be more dual-sourced, which is gonna give us better flexibility around the world to deliver this new model.
To do this, we've got to build up and have a robust IP strategy that'll allow us to have more partners in this space. We'll also capitalize on this regional alignment with our customers to provide better reliability, responsiveness and flexibility in our supply chain. You know, when you think about this end-to-end supply chain, we're gonna make a structural shift away from being transactional and centralized. This shift is gonna deliver strategic partnerships from early stage discovery to suppliers and customers. In short, we're gonna partner with those that will grow with us. The shifts also will deliver an enhanced regional operations hubs, where we have the expertise and capability to flex for new product launches. An example of that is Adavelt, which is one of the new products to be launched in Q1 of 2023.
This is gonna be manufactured in Spain, and Europe is the largest market for Adavelt. This shift is also gonna help us be even more fiscal disciplined in how we approach cost control and annual productivity. You know, productivity as a way of life will help us continue to offset the increases, and it's gonna drive this continuous improvement mindset throughout the organization. Let's wrap things up, and I'll share with you just the four priorities that we'll deliver in crop protection. We will deliver value creation at the farm gate. We'll transform how we work. We'll build a competitive advantage from operations, and we will accelerate this continuous improvement mindset to protect the bottom line. Like I said at the beginning and Chuck shared, it's an exciting time to be part of Corteva. The team is engaged.
They're ready to take the next steps further to be the best crop protection player. I hope you too look forward to taking the journey with us. Thank you for your time and listening today. Now it's my pleasure to introduce Sam.
Sustainable innovation. Delivering technology to our customers to increase productivity per acre while minimizing Ag's environmental footprint and increasing global food security. At Corteva, we've assembled some of the world's brightest minds to discover, develop, and deliver the next generation of sustainable crop protection and seed solutions, powered by data and digital insights. Crop protection solutions with low use rates and safety profiles that have earned us more U.S. EPA Green Chemistry Awards than all other ag companies combined. We're reimagining the global food production system, solving some of our greatest global challenges today and accelerating solutions for tomorrow for generations to come.
Well, good morning, everybody. Let me also say welcome to Corteva. I apologize I was unable to be there, but safety is first and foremost. You know, I'm extremely excited to share with you our R&D pipeline. We're gonna see a little bit of our products here today, and those of you that are in person will get a chance to see a lot of these out in our field demos. I grew up on a farm, and one of the things I know is, you know, farmers really need improved products to solve farm level and field level specific challenges, all while helping improve the overall sustainability of agriculture. Here at Corteva, we're meeting this challenge.
Today, I'm gonna share with you how the R&D program enables us to win in our seed and crop protection business and show you some real products from our leading pipeline of innovation that are improving agriculture and bringing a return on our investment. Let's go ahead and jump in. Now, as Chuck mentioned, you know, we have a very clear strategy about where to play and how to win. Our R&D program is aligned with the business strategy you just heard from Tim and Robert. You know, as Chuck said, we're increasing our R&D investment, really to maintain leadership in core areas like plant breeding and crop protection while building on our strengths in proprietary and differentiated products and investing for future growth. M&A opportunities and partnerships will be part of that strategy. To win in the seed, it really comes down to three basic concepts.
To increase yield per acre that delivers more value to our customers in the $30 billion addressable seed market while minimizing the footprint of agriculture. We have to do this by developing and launching our proprietary traits and transitioning away from biotech trait royalties by the end of the decade, improving EBITDA by about $600 million. You know, there's been a lot of questions about our ability to develop and deliver biotech traits in our past. I'm here to say, as Corteva, we can develop and deliver biotech traits, and when we do that, we get a significant return on this investment. You know, as a proof point, you know, today our company has created traits. They're on about 45% of the North America soybean acres and over 60% of the North America corn acres.
Finally, we're accelerating our investment in new breeding techniques that unlock additional value in our germplasm, our traits, and new frontier business opportunities. Now we win in crop protection, again, with three simple concepts, right? Increasing the yield protection per acre that delivers more value to our customers in the $65 billion addressable crop protection market. We do this by increasing our differentiated and patented products in our portfolio. Finally, we're accelerating our journey to more sustainable crop protection concepts that positions our pipeline to deal with global regulatory pressure. This includes adding enhanced biological products to solve farmer problems and has a market approaching $30 billion by 2035. Now let's take a look at our pipeline investment and the value we create. You know, we have a leading industry R&D pipeline for return on our investment.
We invest about $1.2 billion in 2022. It's all focused on a pipeline and a portfolio of products that have up to $24 billion of peak net trade revenue out to 2035. We see significant opportunities for the company growth and are investing in a discovery program with both internal and external focus that continues to identify new opportunities. Along with this, we see higher margin opportunities as we bring proprietary biotech traits and differentiated crop protection products to the market. As I mentioned, our R&D spend is aligned with our business opportunities. Every year, we go through a rigorous process where we evaluate roughly 3,000 projects, and we allocate resources to the highest priority projects, and we stop projects that are not meeting milestones.
In 2021, you know, our program had a very strong progress in both our seed and crop protection pipelines, along with tremendous success in our regulatory program. 2022 is on track for another strong year. Now, sustainable innovation is really the key enabler of our business. We set the goal that all of our new products will have at least one area of improvement in sustainable criteria by 2035. Today, about 90% of our crop protection pipeline meets our improved sustainability criteria. Our seed pipeline is in a similar shape. You know, these products solve farmer problems. They work, but they're also improving the sustainability of agriculture. Let's dig into a little bit more detail, starting with our seed pipeline. Apologize. I think. Sorry. That's what happens when you have to be isolated.
Our plant breeding program, right, it really is the premier plant breeding program in the world. You know, I was trained as a plant breeder. I'm proud to be part of the history of this company. The history we have, right? Corteva has the longest history of commercial hybrid corn breeding in the world. In fact, when you go to the fields a little later today to look at the demos, you'll be walking on the same fields where the global hybrid corn industry started. In these fields of innovation, you will see more of the future of agriculture. Global farmers really wanna plant the very best seed. They know their maximum yield potential really starts with the selection of seed.
Our team of global plant breeders, utilizing technology, scale, and speed, has created the world's most characterized and evolved corn germplasm pool in the history of humanity. This is resulting in Pioneer being the number one seed brand globally in this $30 billion addressable market. Every year, we release a new class of products. These products have improved performance to sustain the yield advantage expected in Pioneer, our regional brands, and now Brevant. Our yield potential is confirmed in farmer fields. The significant yield advantage and the only germplasm pool to create products that produced over 600 bushels per acre in multiple years and multiple fields. With this yield potential of over 600 bushels per acre and a national corn yield record of about 177, you can see we have a lot of value creation opportunities ahead of us.
Now we apply our expertise to all the crops and geographies we participate in. An example of that is what our team has done in Europe in the silage corn market, which is about 40% of the corn market today. Silage corn is really changing the European silage corn market, right? These products have more silage yield, resulting in more energy and more milk production, all while decreasing CO2 equivalent emissions compared to equivalent products. This is a win for food production, energy production, and the environment. Another example of how we're leveraging our plant breeding program is in the renewable oil space. Renewable oils is projected to grow to about 8 billion gallons here in North America and about 17 billion gallons globally by 2030.
For the last couple of years, we've been leveraging the power of our plant breeding program, working with a number of external partners to really create a new and novel double cropping system. The system is the planting of winter oilseed rape in the fall, followed by a double crop of soybeans, which enables farmers to significantly increase the amount of plant-based oil on the same land. The testing we've done the last couple of years has demonstrated that both crops can mature. We can achieve our target yields. The agronomics for characteristics like how to manage weeds, control insects, fertilization rates are well established for both crops. The oil from this system has almost a 2x price premium, and the winter oilseed rape crop is eligible for cover crop carbon credits. Strategically, we'll be collaborating with downstream seed processors to unlock the full value.
This system creates value, more value for our farmers, our seed processors and producers, while generating more oil on the same agriculture footprint, helping to solve our need for greener energy. New breeding techniques are really a new chapter in the story of plant genetics. I believe this technology is gonna be as transformative as biotechnology has been to the seed industry. We have a leading position in new breeding techniques based on the strength of our elite germplasm, our genomic knowledge, our intellectual property in gene editing, and the reduction to practice over the last decade we've been doing. We've used gene editing technology to create a wide range of changes in plants, from simple plant architecture adjustments like reduced stature corn to complex phenotypes like grain yield.
We can modify major genes that enhance our reduced stature corn concept, which gives farmers new options to manage plant density and crop agronomics. We can also modify genetic pathways that creates new genetic variation that our plant breeders can utilize in their selection programs. The power of these changes really allow us to capitalize the value on this technology through either major changes or through genetic variation that we can use to improve the yield rate of genetic gain. You'll get a chance to see these products out in the field a little later. Another example of this is what we're doing with disease control. Globally, plant diseases can reduce yields by about 16%, resulting in billions of dollars of lost plant production.
You know, just in North America alone last year, farmers lost about $1 billion of farm gate value to a handful of plant diseases. Climate change, unfortunately, is making the problem worse as we see the spread of new pathogens like tar spot in corn and development of new biotypes and races. We're trying to change that situation by applying new breeding techniques that enhance disease resistance using the natural genes that already exist in plants. Gene editing techniques allow us to optimize the genome structure for plant resistance by consolidating many genes into one genomic location. This simplifies the plant breeding program, so more of our products have broad, robust disease resistance faster, and our plant breeders can spend more of their programs selecting for increased yield improvements.
We validated this concept in corn, where we've redesigned the native genes into what we call a disease super locus that currently controls a number of major U.S. corn diseases. While we've utilized gene editing, we've also had transgenic solutions. Out in the field demo, you'll see where we're using transgenic solutions to control Asian soybean rust, one of the more difficult diseases out in the field. At Corteva, we've also delivered a number of value-added oil and protein products across soybean, canola, and sunflower. We expect this consumer-driven space to continue to grow in size and the scope of product concepts.
One advantage of our new breeding techniques platform is the ability to make changes in oil and protein characteristics to go ahead and create closed loop integrated systems that enables us to share in more of the downstream value while bringing products quicker to the marketplace. We're working on a range of concepts from animal feed segment, where we've been changing the protein profiles in soybeans, to other concepts for direct human consumption. An example of this is how we've expanded the expression of the native soybean legume hemoglobin protein to now express in the seed, making it easier to produce this protein at scale. We see a lot of opportunity in this frontier space going forward.
Now, insect control is a global farmer problem, and corn rootworm is a billion-dollar problem. We've optimized both insect control and product performance, giving farmers the best outcome that they possibly can get. We're on track to deliver a decade-plus of corn rootworm control with improved yield performance, all while reducing our trait royalty requirements, resulting in a double-digit gross margin improvement. Today, Qrome provides corn rootworm control and has a broad acre yield advantage versus our competitor products. Our next generation product, Vorceed, is bringing the advantage of the Enlist weed control management system and some additional corn rootworm control on top of the Qrome yield advantage we have today.
As we move to the next decade, we will launch our third generation below ground insect control genes that are Non-Bt sources, that are providing new modes of action that are not present in the market today, thus creating another decade of optimal corn rootworm control. These new modes of actions will expand the spectrum and extend the durability controlling corn rootworm. While I'm not showing it today, our story is the same for above ground insect control. We have multiple new genes providing new modes of action, and you'll get a chance to see these products out in the field. Together, you know, this gives us new and differentiated insect control products that will solve farmer problems and can expand our out-licensing and stacking options. Now, our biotech trait transition story continues with insect management in soybeans in South America.
Last year, we launched our Conkesta Enlist E3 platform in South America, giving farmers a new choice for insect and over-the-top weed control options. I can say we're very pleased with our launch results. Farmers had excellent insect control and superior weed control options with Enlist and the industry yield performance in these initial varieties. We're ramping up our transition into proprietary genetics and expect to be on about a third of the market by the end of the decade. Now, just behind this is our second generation LEP control product, which is advancing through our pipeline. Similar to our situation in corn insect control, it has multiple new modes of action, some of which, again, are Non-Bt sources. This will bring growers additional insect control options and durability.
With our insect and weed control traits, combined with our plant breeding capabilities, we are now on track to build a sustained soybean business in South America. Now, we see a lot of opportunity to enhance the performance of our products with optimized agronomic recommendations. Granular Insights platform really enables this enhancement. We are well-positioned to combine on-farm information with our internal information, along with our deep genomic knowledge, to create better yield performance for Corteva farmers. Using data at scale with these advanced algorithms, combined with our unmatched route to market, we can improve where to place our hybrids and how to best grow them. Our early algorithms show us a step up of four to five additional bushels per acre, which is really equivalent to a few additional years of plant breeding.
This is just the beginning in this journey of realizing more of the full yield potential that is in our products. We know getting more productivity per acre improves our farmers' return on their investment and continues to improve the agriculture footprint by reducing new land requirements. Now let's switch over to our crop protection pipeline, starting with an industry-changing story that combines proprietary biotech traits, elite genetics, and a superior chemistry formulation. The Enlist E3 platform is the fastest-growing soybean trait and herbicide system, and is on track to become a billion-dollar platform. This system gives farmers weed control choice and represents a win for biodiversity and farmer flexibility as a new standard in compliance with the Endangered Species Act.
We now have the premier soybean weed control platform on 45% of the acres in the U.S., and about 80% of those acres use our Enlist herbicides. We expect the acres to grow to about 60% in the next few years. Now, building on this Enlist E3 platform, at the Farm Progress Show just a few weeks ago, we announced our collaboration with BASF to bring additional weed control options to farmers. Our next-generation soybean herbicide-tolerant product combines four modes of action and will work with BASF's new PPO chemistry. This continues to expand the weed control options while building on our leading soybean weed control platform. We continue to bring additional innovation in the challenge of controlling weeds. Rinskor, which we just launched, is a great example of that.
This novel broad-spectrum weed control product brings new weed control options, say to rice, to challenging problems like barnyard grass and sedge. Rinskor controls these challenging weeds with a minuscule amount of active ingredient compared to other products, resulting in a significant lower environmental loading. Over the next five years, Rinskor is expected to generate over $1.5 billion of revenue, while at the same time avoiding the release of about 1.5 billion kilograms of CO2 equivalent emissions. This product represents the profile of future crop protection products that solve farmer problems and society challenges. You'll get to see it in the field demo, along with some additional new herbicides in our pipeline. You know, nematodes can reduce global yields by about 12%, again, costing billions of dollars of lost production.
We just launched Reklemel, which is a new mode-of-action nematicide, has real novel activity and very favorable environmental profiles. We see excellent nematode control across a range of crops from almond trees to carrots. It's compatible with soil health management programs. With its low use rate, it reduces environmental loading and avoids releasing CO2 equivalent emissions compared to other products on the market. Again, in the field demo, you'll get to see some additional new pipeline insecticides. Just as we are creating differentiated and sustainable chemistry to solve weed and insect control problems, our story continues with disease control. We have a product family of naturally inspired and differentiated fungicides that will become a billion-dollar product family. We are launching Inatreq, which has a new mode of action for major disease control in cereals.
We've already created Adavelt that expands the scope of crops and diseases being controlled. By later this decade, we will have a visas that targets Asian soybean rust in South America that will nicely complement our Conkesta Enlist E3 insect and weed control system. This family of fungicides is the new mode of action and has numerous favorable sustainability benefits. In fact, Inatreq has such a low environmental persistence that we had to develop a new testing protocol in Germany just to figure out how to evaluate the product. Inatreq is also a great example of how we also innovate in the formulation of these actives. IQ4 technology enhances retention and spreading of the end product, improving the efficacy and reducing the required rates. This is a generation of new innovation for food production and sustainability.
Just as I showed how digital tools bring additional value to our seed products, the same concept holds true for crop protection products. The crop disease severity is dependent on the complex interaction of plant genetics, the environment, and the pathogen. This can make it difficult for farmers to know what fields to spray in a given year and the optimal time to spray a field. Data and our proprietary algorithms bring insights to this decision and can maximize disease control while also making sure farmers get the best possible return on their investment. We have validated our tools with on-farm studies that help farmers determine which fields to spray and the optimal spray timing to maximize the yield response.
You know, combining this type of technology with reduced-stature corn, our new fungicides, some of our drone application research really creates new opportunities for growers to control disease problems. Let me wrap up by saying Corteva is positioned to really improve agriculture production and deliver value to growers, society, and our shareholders. Our products help increase yield per acre and help farmers protect that yield. We are a complete sustainable solution ag company that's helping farmers produce a reliable food supply in a more sustainable way. Finally, our R&D investment will deliver future growth in our core areas and our new frontiers. Later today, you're gonna get a chance to see a number of these products in the field. Thank you, and it's my pleasure to turn it over to Dave.
Good morning. Let me also express appreciation to all of you for being part of the Corteva program today. It's really, really exciting to be here, really exciting to be part of this leadership team. I wanna start by going through the financial framework to 2025. I wanna give you some of the highlights and additional insights of what we've developed. As Chuck said, it's really been a pretty intense process, months of review, a lot of data, a lot of discussion among the management team. I'm gonna cover each element on this checklist, including revenue growth, our cost actions, earnings growth, capital deployment, and also just touch base briefly on inorganic growth, including acquisitions and the opportunity that we think we have there to supplement what you're seeing today.
Finally, I'm gonna come back then and just summarize quickly on all of that before turning it back to Chuck for his closing remarks. The starting point, as you know, and you know that coming in today, but it's really reinforced by what Tim, Robert, and Sam have reviewed with us in some depth. That's the strength of our broad-based market positions in both seed and crop protection. The highlights on this slide are from 2021, and they include our seed and crop protection sales by segment. You'll see the diversity that we have in terms of our global geographic footprint. Now importantly, given the strength of our growth in 2022, we anticipate ending with about a 50/50 sales split between seed and crop.
With a growing addressable market and the synergy benefits that we derive from being a global ag technology company. The other thing I think that's really a standout for us is the shared technology that provides growers with choices to solve their problems using seed and chemistry. The strength of our go-to-market strategies and our commercial excellence and the scale, and that'll become even more pronounced as we go through the data, the scale of our cash flow that translates into a strong balance sheet and significant capital firepower. Those are really the combination benefits, if you will, that represent the company. It's important, I think, to get some frame of reference before we talk about the numbers and the financial framework out to 2025 to give a frame of reference around where we've been. Some pretty impressive numbers.
You can see that since 2019, the numbers for 2022, I'm just using the midpoint of our latest guide. Since 2019, revenues have increased by $3.6 billion, which represents an 8% compound average growth rate over that period. EBITDA impressively is up 50%, billion dollars from $2 billion in 2019 to midpoint of guide $3 billion for this year, a 15% compound average growth rate. By the way, translates into 300 basis points of EBITDA margin expansion over that period. Finally, EPS up more than 75% from $1.43 in 2019 to $2.53 or a 21% compound average growth rate. Now it's impressive performance any way you look at it.
Key contributors shown on the right-hand side of the slide include the launch, of course, of Enlist and also Brevant. The approximately $4.5 billion, as Robert said, of sales from differentiated crop protection products expected in 2022. Our focus on cost and productivity, which are very, very important to that 50% EBITDA dollar increase. Importantly, we've returned by the end of this year, given our guide, we'll have returned more than $3.6 billion of cash to shareholders, including more than $2 billion in share repurchases during that period. Now we're gonna be accelerating our financial performance, 2022 to 2025. Let's go through highlights for sales, EBITDA, and EPS. Focus on the attractive growth outlook that we see. Starting with sales, we anticipate broad organic growth, partially offset by portfolio exits. Those will drive sales.
The combination of all that will drive sales to approximately $20 billion at the midpoint in 2025. Now, sales growth, coupled with significant reduction in net royalty expense and the execution on our cost and our productivity programs, are expected to translate into EBITDA of approximately $4.4 billion at the midpoint in 2025. That's a 13% compound average growth rate with more than 400 basis points of improvement over 2022. Now the increased earnings and the lower share count driven by continued share repurchases, I'm gonna talk about that in a little bit when I get to the capital structure and capital deployment, partially offset by the assumption of marginally effective tax rate, and that's really related to the latest regulations around foreign tax credits as well as R&D credits, translates into operating EPS of approximately $4 at the midpoint.
A 17% growth, compound average growth at the midpoint. Again, an impressive forecast, one that we have confidence in terms of our ability to execute. Talk a little bit more, just go a little bit deeper on the revenue growth, and I've shown the walk here out to 2025 from 2021 to 2022, and then that starting point of midpoint of guidance of 17.4 for 2022. As you can see, we're estimating about 4%-5% revenue growth. In the absence of product and geographic exits, that growth would actually be about 6.5%. The actions that we're taking in terms of portfolio simplification that Chuck referenced and we've discussed translates to about 1.5 in terms of the CAGR over the period.
If you go deeper into the drivers, you can see that, on the right-hand side of the chart, that product exit impact that represents, again, about 5% of revenue at the starting point of 2022. Let's take a look then at some of the key growth drivers over on the left. First, of course, and very importantly, is the continuous improvements in yield, advantage technology and seed that's gonna drive pricing gains over the period. The other key component, of course, is the growth in differentiated crop protection products, including in-flight Spinosyns capacity expansion, which will drive volume growth during the plan period.
Now before we walk down the income statement, I wanna first give you a little more context for the analysis that we've gone through and some of the decisions behind our portfolio decisions and also our value capture. We spent the last several months, as I said, refining the strategy and evaluating a range of options. Historically and previously, we were really focused on a much broader participation, both in geographies and crops. While targeting core markets and crops, we're now gonna be able to be more focused in terms of our investments, more differentiated and sustainably advantaged.
We're also gonna be able to decrease our reliance on third-party traits while building our capabilities to expand out-licensing of our own proprietary technology and reducing net royalty expense, again, by more than $250 million in that reduction of net royalty expense by 2025, and more than $600 million by the end of the decade. We're gonna continue to right size our manufacturing footprint, our supply chain structure to improve efficiencies and align with our portfolio decisions. We'll increase the percentage of differentiated products to more than 60% of the crop protection portfolio. That's gonna position us well to meet increasing demand for these products, and again, also drive earnings growth.
By focusing on economic profit and continuing our investment in innovation, we're gonna be able to achieve operating margin in the range of 21% to 23% by 2025. Now you've heard a lot about our new where to play and how to win strategy. I just wanna discuss a little bit the process that went into determining which products and which markets for investment. This comprehensive analysis was really enabled by recent system advances and also upgrades that we've made to some of our analytical tools. The results of that are the segmentation that we've been able to do in terms of products and geographies based both on competitive and comparative advantage in the market, as well as our financial performance.
Among the questions we asked ourselves and reviewed and analyzed is whether we bring sufficiently differentiated offerings, whether there are go-to-market alternatives for improvement, and whether we're achieving an adequate return on investment. Now, the decisions that we've made will allow us to focus our investments and accelerate our progress in terms of our margin expansion path. Now the cost actions are also essential, an essential component will continue to be a very important part of Corteva. We're gonna continue to identify and tackle opportunities in both businesses and drive efficiencies in operations. As Robert said, it's really part of our DNA, and from 2021 to 2022, we will have achieved $450 million of cost savings from productivity initiatives with the bulk of those incurred over those two years.
As you know, in August, during the second quarter earnings release, we also spoke about a restructuring action to support our portfolio decisions. Specifically, we estimated $400 million of restructuring accrual through the second quarter of 2023. You recall, we took $68 million, approximately $70 million dollars of that restructuring in the second quarter of 2022. Approximately $200 million dollars of that $400 million will be cash costs, including significantly headcount reduction and some facilities reduction. We're estimating over 5% roughly of our global workforce will be impacted by those decisions. We're gonna deliver $200 million of run rate savings from those actions by 2025. Other cost action programs are being enabled by our ERP deployments, which are ongoing, and also our enhanced data analytic capabilities.
We're creating a common data architecture across the organization that's gonna enhance our ability to both drive commercial and operational excellence. The improvements in SG&A as a percent of sales each year, 2022, 2023 to 2025, will translate to approximately 200 basis points of improvement from 2022 levels. Very, very importantly, this will support strategically the increased investment that we're making in R&D. Together, these actions will contribute more than $400 million in savings, 2023 to 2025. To summarize the drivers of earnings growth, we have solid revenue growth, a reduction of net royalty expense, portfolio decisions and simplification, and focused cost actions. Again, forecasting as a result of that, EBITDA of $4.4 billion by 2025.
Now demand for yield advantage technology is driving gains in seed on top of more than $250 million reduction in royalty expense. Increased revenue in differentiated crop protection products will be also very key. Now, price and volume gains in both seed and crop will more than offset the impact from our decision to exit non-strategic geographies, as well as the input cost headwinds that we've assumed for the period. Now we anticipate the cost headwinds in both segments through 2025, driven by commodity and raw materials. Although the plan assumes moderation in inflation by the end of 2023. In the math that we've developed, roughly 60% of that inflation impact or inflation headwind over that three-year period, 2023-2025, will be felt in 2023.
As you heard from both Chuck and Sam, again, we're increasing our R&D investment to roughly 8% of sales, prioritizing investments in sustainably advantaged chemistries and technologies. Combined, all of this translates into operating EBITDA margin, again, of 21%-23%, putting us very much in line to achieve competitor and peer margin performance. I wanna just transition now and talk a little bit about cash flow and our cash flow outlook. The forecast for 2022, free cash flow to EBITDA conversion of 40% is lower than our recent average, driven by working capital, and you've heard us reference this, with higher AR balances supporting higher sales, as well as replenishing inventory balances which were well below target rates.
By the way, despite that lower cash to EBITDA conversion ratio this year, as you know, we're doing very, very well and are actually improving on all working capital metrics, including DSO and days sales and inventory. Our forecast for 2023-2025 for cash flow to EBITDA conversion is approximately 65%. On an operating earnings basis, in other words, if you used operating earnings instead of EBITDA to the relationship, the, if you will, the numerator for our operating EPS calculation using that operating earnings as the denominator for cash flow conversion, the conversion rate would be 90%. That's another relevant metric as you think of us against the peer group and across the industry. That cash flow, together with our investment-grade balance sheet, provides us flexibility in how we deploy capital. The pension liability, as you know, is well managed.
We have got greater than 90% funded status at the end of August. We're still fine-tuning those numbers. You recall at the end of July, we were approximately 93%. We think we're tracking there, just don't have that fine-tune on the data. The strategies are in place to continue to mitigate any potential claim on our cash or meaningful claim on our cash from pension or pension liability. We've got, as we've said, and as you know, an impressive track record of returning cash to shareholders. Since 2019, we've raised the dividend a total of 15%. We'll have returned more than $2 billion by the end of this year in share repurchases, and for a total of $3.6 billion in cash back to shareholders. Our balanced capital allocation, our capital deployment allocation strategy is relatively straightforward.
It's a disciplined balance of investing for growth while returning cash to shareholders. Here are four priorities, starting with, obviously, with growth. For capital expenditures, we will fund projects with high ROI. By the way, I'm very impressed, we continue to be impressed with the quality of both growth as well as productivity ROI-producing projects. We expect that CapEx will be roughly 4% of revenue, which is consistent with our current level of capital spend. Think of that as about $650 million for 2022. Second is a dividend that will grow with earnings. As we've said before, the dividend doesn't define us, but it's an attractive element, foundational element for our valuation. Moving to the targeted priorities, we have M&A and share buyback. Let me talk a little bit about buybacks.
As Chuck said earlier, our board has approved a new $2 billion share authorization. It's confirming our commitment, again, to returning cash to shareholders. As a reminder, in 2021, we completed our initial $1 billion share repurchase program. And we got a new $1.5 billion in the second half of 2021, and we expect to complete the majority of that $1.5 billion authorization by the end of this year. Then finally, a couple comments on M&A. It's obviously become a more important focus area for us. Saw references to that in the earlier presentations, and particularly it's focused around our technology roadmap and our speed to market, and how do we accelerate those. Let me just spend a second just talking about that just for a few minutes.
Here are a few words on how we're thinking about M&A to supplement organic growth. The management team is collectively a fair amount of acquisition experience. We're disciplined, obviously, very cautious, very focused, very disciplined when we talk about our inorganic model. We're building, of course, on our core capabilities. We intend to complement these with product and technology strengths and also enhance our strong brand and customer loyalty. It's critical to our strategy that any target fit with our, also with our financial criteria, which would include above-market growth, the ability to operate at or above our targeted EBITDA margin, and an internal rate of return, obviously, that exceeds our internal hurdle rate. The important thing, too, to know is the new alignment that we have of our incentive programs with our strategic direction and our interest in terms of driving continued shareholder value.
Our short-term incentive program has been updated for 2022 to now include operating EBITDA margin, as well as working capital turns, in addition to the absolute dollars of operating EBITDA. The margin metric allows more comparability with peers. It incentivizes our strategy to innovate, price for the value of our technology, while also exercising disciplined cost management. The net working capital turns metric encourages working capital management that effectively translates earnings to cash, which can be used for investing for growth as well as cash to shareholders. Now we've initiated education programs across the company about the new construct and these new pay-for-performance measures. That's powerful because it really ties to the operational instincts and capabilities of the organization and really aligns the full organization around our strategic goals. Also, for 2022, something new is the incorporation of ESG modifier into the short-term incentive programs for this executive leadership team.
We're focused on incremental progress towards Corteva's long-term ID&E goals, as well as increased sales from sustainable solutions. It reflects our commitment to promote value-driven leadership and sustainable innovation. Before I hand it over to Chuck, I just wanna come back to the checklist that I started with in terms of the financial framework and just summarize. We've got significant growth opportunities driving both top line and margin expansion potential. The strategic decisions that we're making about where to play and how to win, along with focused and disciplined cost actions, including continuing to right-size operations and our supply chain footprints and our ongoing reduction of net royalty expense. This translates into meaningful margin improvement potential per year through 2025.
Finally, the strong cash flow, our balanced capital allocation strategy, including disciplined M&A criteria, will drive shareholder value, not only through this plan period out to 2025, but we should be sustaining, well sustaining beyond that. Again, I'm excited to be part of this team. Really appreciate the opportunity to be with you today. Thank you. Chuck, back over to you.
Thanks, Dave. Look, that concludes our prepared remarks today. We hope that you're excited as we are about what you heard this morning. We obviously, you could probably feel it in the room, we're very confident that we have a plan that will deliver shareholder value, at the same time, help Corteva achieve its winning aspiration. I think most importantly, the world needs companies like Corteva to address these most pressing global challenges, such as food security, climate change, and the energy transition. I believe we have assembled a world-class leadership team. It's diverse, it's strong, it has the experience, and it's well-positioned to successfully execute against this plan. With that, we're gonna take a short break, and then we'll come back for some Q&A. Thank you.
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Okay, everyone. Thanks for coming back. We will head into our Q&A panel now, which will run for 45 minutes. As a reminder, if you're in the room, you'll have the opportunity to ask questions live. Just raise your hand or use the QR code that was provided this morning. If you're on the webcast, virtual attendees can submit a question by clicking on the Ask a Question tab in the upper right corner of your video player. We'll kick off the session with a question in the room.
Hi. Thank you. Vincent Andrews from Morgan Stanley. Chuck and Dave, maybe just to start off, you know, Chuck, you've been around ag for a long time. Dave, you've been a CFO for a long time. You guys just put targets out to an out year in a really interesting world that we live in, where all sorts of stuff's happening on a daily basis, and then you've got all the ag volatility as well. What maybe conservatism or what confidence do you have that those numbers, you know, are really gonna be viable and aren't subject to sort of revision a year or two from now when something unforeseen comes around the corner?
Yeah. I'll start and then Dave can certainly. Dave built the numbers behind the plan, but the strategy, the entire leadership team was involved. What I mean the entire leadership team, it's not just the folks up here. We probably had 200 to 250 employees working on this for almost 10 months that I've been here. It was, as we like to say inside of the company, a top-down and a bottom-up approach. When we think about it, we obviously have to build a plan in the context of the macro environment. You've heard our view today on the macro environment.
Certainly we believe, at least for the next couple of years, we're in very robust ag market conditions for all the things that we've talked about. That is one of the considerations. From a bottom-up perspective, we had a very good look with the data system that we built around where we make our money, and where we have competitive, unique product offerings. What gives us confidence, I think, Vincent, just to be quite transparent on a couple of the things, some of the decisions are already very well down the path, right? The portfolio decisions, for example, they're in progress. We have made the decisions. We're working through the exit plans, and we know where we made money and where we didn't with those products.
You think about that as we're starting a journey, but we're well down the path. If you look at the concept that we outlined today on royalty neutrality, again, assuming that we were able to see the continued growth in the Enlist platform, our genetics are gonna go into more of those bags and that path and that profile is more or less the one we're on today. We're feeling very good about those two elements. The product slate, and if you look at our mix, I call it high grading, going to differentiated, unique technology. When I got here, there were already nine new products in entering the marketplace. Now this is taking those AIs along with what we've outlined that's already in our pipeline and bringing them into the market.
Robert indicated today the new spinosad's technology, the capacity is built. We're operating the new capacity today. That will be market-driven, of course, but we're feeling very good that the journey we're on from upgrading our product slate and our mix, we're well down that path. Then it comes down to that last bucket, operational excellence or however you wanna describe it. We outlined today approximately $400 million. That's literally hundreds of projects optimizing every corner of our company. But we have, I think, a good measurement system around that. We've got leadership that's all hands on deck to execute against that element.
When I look at it, you know, I feel quite confident that the plan that we outlined for you today, which has some growth in it, you can just see it, and it would be a significant improvement from where we've been in the early days of the company. We're feeling pretty confident given the macroeconomic background, the ag fundamentals, and then just the work that we've done and what is already currently in flight. When you put it all together, I'll pitch it over to my friend Dave to kind of wrap it up.
Yeah. Chuck, when Chuck talks about the significant growth, you're really talking about obviously the continued acceleration in terms of our EBITDA growth and EBITDA expansion, margin expansion. Vincent, I think the important thing, and for the group, I think the important thing is that we think that top line, it starts with the top line, is quite achievable. In other words, the revenue numbers that we've assumed, and that's obviously a very, very key starting point here. It factors in the differentiated products. It factors in what Tim is gonna be able to deliver in terms of yield advantaged technology for seed. It really starts there. We feel very good about those numbers.
The other thing maybe just to add to what Chuck said, as part of that, if you will, relationship between revenue and EBITDA is on the expense side is the $200 million of restructuring, cash restructuring, $400 million of P&L restructuring that we're taking that will deliver that $200 million of run rate savings. That's a really key thing that we've stepped up to this year on top of the final thing I would just say is the performance that we've delivered this year and the confidence that gives us on the go-forward plan as well.
Thank you.
Great. Next question.
Christopher Parkinson, Mizuho. Thanks for hosting. When we think about the intermediate to long term CPC margin targets, could you just hit a little bit more and dive into, you know, it seems like there are three moving parts, the growth of the new products and the Spinosyns, which presumably are all higher margin, the shedding of older, presumably lower margin products, and also cost cuts. If you could hit on those three buckets and also hit on, you know, any potential areas of upside, specifically in the new product growth side of it, that would be incredibly helpful. Thank you.
Yeah, I could do those for you, Chris.
Robert.
Yeah. Robert, do you want to add to it? I think, Chris, the three things you talked about was differentiated products that, if you will, the streamlining of the portfolio, some of the product exits that we're making, and then the cost side of it as well. All three of those are really important. When you look at the P&L in terms of sort of at the, you know, at the high level, you know, out to 2025, what we're really doing is benefiting at the gross margin level significantly as a result of what Robert referenced, as well as what's built into Tim's plan. Obviously, what's driving that is the strength of what Sam reviewed in terms of technology and the operational efficiencies that we're gonna continue to derive in both of the businesses.
That's really the driving force. If you look below the gross margin line. By the way, product simplification contributes to that as well. The significant, that's more of reset, but then that continued climb out to 2025, it's really key is what I just mentioned. Second thing to think about in terms of the math is that the increased spend in R&D basically is being enabled, when you think about it in terms of margin rate, is being enabled is by managing our overhead costs. That's one of the things that's so important here, and that's part of what the restructuring is helping us do. Key component of that is related to those overheads, if you will, the SG&A spend.
That SG&A spend, by coming down as a percent of sales over the plan period, that's basically enabling us from a dollars as well as from a percent of margin standpoint, to be able to reinvest, in fact, grow the investment, increase the percent of R&D spend over the plan. Hopefully that's helpful. It's really coming out of that gross margin. There's a 2023, and to some degree, 2024 benefit as a result of the product simplification and product and geo exits. More importantly is just the growth you're seeing from the fundamentals of the two businesses, which is translating into higher operating leverage, if you will, margin to dollars of EBITDA to sales relationship coming about as a result of managing, they'll call it the below the gross margin line expenses. Hopefully, that's helpful. Yeah.
Next question.
Hi. PJ Juvekar from Citi. I got two questions. The first one is, maybe it's for Sam, if you can hear me, but it's on reduced stature corn. Can you talk a little bit about that? Does that compete with competitors' short stature corn? And, are you behind in that technology? Where would you stand in development of that particular product?
Hey, PJ. Let's kind of put a few things in perspective. We've been working on our reduced stature corn from our breeding program for about a decade now. We've done a lot of testing, a lot of evaluation. We've looked at it across different farming practices like plant density, locations, germplasm, you name it. We're really ready positioned to go ahead, as we said, mid this decade, launch that product out in the marketplace. We see it having a great fit on quite a few acres where farmers wanna use it to manage, you know, driving up plant densities, how they wanna manage their in-season crop access, reducing risk on standability, et cetera.
We've also complemented that with a number of gene editing technologies to go ahead and recreate that, phenotype, but also enhance it in our sort of next platform going forward. We feel very good about it, and you'll get a chance to see the products out in the field today.
Thank you.
Thanks, Sam. Next question.
Thank you. David Begleiter, Deutsche Bank. Tim, can you discuss seed pricing for next year? Looks like you're expecting about double digit plus pricing, perhaps, in both seed, in both corn and beans.
Yeah. We've so we've introduced pricing in the U.S. here last month, and our other markets in the northern hemisphere will continue to launch over the coming weeks. So you know, clearly, we continue to be in a favorable ag environment. You look at the marketplace and it continues to be constructive. We're in a position where we've got a really outstanding value proposition, so products that customers want and value. We're out there pricing our product. We continue to price our products for value. I can't describe exactly what that is. I mean, each farmer is gonna have a different experience in terms of the mix of products that they price.
We will get paid for value, and we will be accretive to margins as we come into this next year. Obviously, it's a competitive marketplace and no question, you know, farmers have a range of opportunities out there. You know, I describe this as the early stage in the marketplace. We're comfortable with the offer we have in the marketplace in the U.S. and finalizing that in the other markets in the Northern Hemisphere. Over the coming weeks, you know, certainly we'll be in combines, we'll be out there with our customers and beginning to have that conversation and create those orders. Obviously, the next 90 days are critical for us.
You know, on seed in the U.S., we'll be you know essentially we'll have our orders in place by the end of December. Next 90 days are critical, but we're comfortable where we're at, and we have no doubt that we'll continue to be accretive to margins and that we think that our customers will be receptive of the prices we put in the market.
Yeah, Dave, maybe just one comment on sort of the overall sentiment we're seeing at the farm. The behavior we've seen for basically the entire year, farmers are quite profitable. They're facing inflationary pressures just like everyone else, and the best way that they can manage that is to invest in their crop and drive yield. We're seeing it across our business platforms, whether it's seed or the CP. They're prioritizing yield, they're investing in their crops, and they're doing exactly what we figured they would do right now, which I think is helpful for them, and it's obviously helpful for us.
Great. We'll take another one in the room.
Hi, it's Joel Jackson from BMO. So you're projecting $1.4 billion of EBITDA growth over three years through 2025. Can you talk about will that growth be linear over three years? What years will be more of an impact in terms of earnings growth? Then, you know, when you think of the ag cycle, what are your underlying assumptions for the ag cycle over the three years? We know where we are right now. Do you assume a bit of contraction in crop prices? How would you describe the ag cycle? Do you wanna give that in a corn price or some other metric? How would you talk about it that's in your base case? Thank you.
Hey, Joel. We'll have Dave maybe talk about the $1.4 billion, and then I can come back and answer your question on the fundamentals.
Joel, it's relatively linear. Obviously, 2023 is gonna be a very key year for us. Maybe talk a little bit about 2023, and obviously we'll get into more specifics on that as the year progresses, and then we get into, actually into the year in terms of a formal guide. We'd anticipate, as I mentioned, continued inflationary pressures in 2023. We don't think that's abating. It's gonna be at a lesser rate, we think, than 2022, but it's gonna be significant. That's gonna be a very, very important year for us to continue to drive the whole formula of price to cost in terms of our value-based pricing equation, while also managing our cost structure. You know, generally, I would say it's relatively ratable over the time period.
Then the way we're thinking about the next three years from an ag market perspective, look, things are good right now when you're pushing up north of $6.50 corn and yesterday, you know, over $14 soybeans. We're not expecting that continues through the three-year period. There will be a normalization. But we do expect, as we said in the prepared remarks, we need two consecutive growing seasons to really rebalance the stocks. And we don't think that this fall will be one of them. Certainly, when you look at North America, and Tim and Robert can give you the specifics. In Europe, we think we're below trend yields. What we think will happen is 2023 I think is gonna be another elevated year.
It's gonna be, I think, a very good year for us. I think farmer margins are gonna be very healthy, and you'll see the same behavior I just described in terms of investing in the crops. When we get to 2024 and 2025, we don't, you know, the plan, I don't wanna give you specific numbers, but the plan has some normalization of crop pricing because we do realize that where we are this year and most likely next year, there needs to be a reset eventually.
Thank you. Next question.
Hi, Kevin McCarthy, Vertical Research. It seems to me that one of the themes of your discussion was simplification. You talked about streamlining number of countries, crop focus, product lines, manufacturing plants, headcount, and so forth. Can you elaborate on, you know, the process that you used to make these decisions, number one? Number two, which of them do you think will be most important, financially? Just maybe provide a little bit of color on the flow through in 2023, 2024 and beyond.
Go ahead, Dave.
Kevin, I would probably just go back and cite some of the material that I referenced during the general forum, which is really around the detailed analysis, literally hundreds, as I may have mentioned, of scatter plots across that matrix that I showed that had margin and revenue. Really understanding our, if you will, our performance and our competitive positioning and our outlook to 2025 for all of those intercepts. That's very foundational. At the same time that we were doing that, call that the portfolio simplification portion of the equation. We're also looking at our cost structure and analyzing every element of that in its behavior, if you will, as well as its competitiveness. Benchmarking every functional cost, every element of our cost structure, looking at that.
The result is that's come together is exactly what we've shared with you today. Which is again, the decision, and Chuck referenced it, around 35 countries in terms of exit, roughly, let's call it $800 million of revenue, about 5% of revenue in terms of our decision in terms of portfolio exits, product exits. From a cost standpoint, what we talked about is on the SG&A as a result of all of that, and by the way, embedded in that, again, is the restructuring that we've taken because that's a big enabler in terms of some of the simplification as well as call it right sizing or fit for purpose in terms of that cost structure against this new portfolio and the revenue and growth outlook that we talked about.
It's really all of that, and it sets up for 2023. I mean, 2023 will benefit significantly from all of those actions. We won't be 100% complete with all of the elements in terms of the, of the product geographic decisions, but we're gonna be significantly into it. Robert, you can speak a little more to that. We're gonna be significantly into it. And on the cost side, what we're gonna do is make major progress in 2023 that will set up then the run rates for 2024 and 2025. It all fits together on a, on a continuum. Each piece of the puzzle kind of back to the P&L, and the P&L highlights that I covered with you this morning contain that detailed review, the outcome of that detailed analysis.
Robert, you wanna talk a little bit maybe about Crop Protection?
Yeah.
Because that's got a lot of the 800.
In Crop Protection, I'll just start with, you know, alignment of the organization to start with. By aligning with the BU structures like we have, it brings a whole lot of clarity to the organization of how we function together and run as a business team. Okay? When you begin to look at the complexity below that, about 20% of our AIs we're gonna exit. When you say, "Well, how you figure that out, et cetera?" Well, it's the lower margin ones that aren't moving the needle, and we don't see a way to get them up to the level that we need to be.
When you begin to take out active ingredients and associated formulations, you know, think about everything that has to go in to keeping our products registered, maintained, et cetera, that's a lot of complexity that begin to come out when you're talking about 20% of your AIs that aren't moving the needle. There's things like that within Crop Protection that we're taking work out so that it's very clear of where we do need to work, to begin to make the impacts we're talking about.
Robert, you had mentioned methomyl during your presentation. We got a question online as to whether or not we could be more specific with regard to what the product exits are at this time.
Yeah. I'd love to, but we still need to talk to customers and do this in a way that does not hurt them, okay? They so they have time to react and get the alternative products, et cetera. We'll be able to tell you more as we get further into this execution strategy. You know, methomyl was one. You've seen that one where we said we need to exit that, and you see that we did the sale for outside of Brazil. We're still running in Brazil. We'll make these clear as time goes on in the near term. But right now, we need to be able to help the customers be able to transition with us. Okay?
Thank you. We'll take another one in the room.
Robert, can you talk about what fraction of your active ingredients are sourced in China? As you move away from this 20% that you're gonna exit, and you reduce the percent that are solely produced within Corteva from whatever it was, 25% to 10%, is that reliance on China gonna go up? Just one quick one on one of your products, Utrisha. It's a nitrogen-fixing foliar spray. What kind of nitrogen pounds per acre can that product produce?
Okay. I'll take the first part of that, and then Sam, maybe let you comment a little bit more on Utrisha. In relation to China, today, we have about $2 billion of our total revenue coming out of China for active ingredients. You know, quick math there, 25%. Of those, 80% of them are dual sourced in other regions. Our reliance on China, while we have products there, we're balanced across all of our regions when it comes to where our AI is made and with external manufacturing partners as well. As we begin to move forward, you know, this isn't just a cost decision, it's a risk management decision as well. We will only go to China, as an example, if it makes sense overall, because it's not just cost.
We're managing the risk and the resiliency of our supply chain as we move forward. The shift then, the second part of your question around 25% internally today and moving to 10%. What that indicates is we're gonna have more dual sourcing than we have today, okay? The 10% that we're talking about are ones that we say, "Hey, they have to stay inside, 'cause we have to protect the IP, and if we don't, then it doesn't work." Spinosyn is a great one. You know, Spinosyn has been internal to us since, I believe, it was launched mid-1990s, if I remember right, and it's a trade secret. We keep that internal. Others would love to have it, but that's one as an example that we will always have inside. We'll balance the risk, we'll balance the intellectual property.
Management of it to be able to make those decisions. The indication there is more dual sourcing is really what we're trying to help you understand.
Thanks, Robert.
Sam, do you wanna cover your channel?
Yeah, sure.
Maybe give the background on it too.
Go ahead, Sam.
Sam Eathington.
On Utrisha N, again, it's a product we're quite excited about. For background for people, it's a bacterium that we can spray on plants. It colonizes those plants, and then it performs the function of taking nitrogen from the air and converting it into a form that plants can use. What's neat about the system is it responds to what the plant needs. If the plant has lots of nitrogen available to it, then it really doesn't need much from the system. The amount of nitrogen that the organism would produce would be quite small. As the plant transitions into needing more and more nitrogen, then the amount that the organism can produce for the plant increases.
It responds to what the plant system needs. That's important when you think about environments where farmers may not be able to get enough fertility on their crop, or also important where we have regulation coming into play, where we're getting reductions in how much nitrogen a farmer can actually apply to their crop. In those markets, we would see the product being able to supplement quite a bit of the nitrogen that a crop needs.
Thanks, Sam. Next question.
Thanks very much. Jeff Zekauskas from JP Morgan. First, Dave asked a question about seed pricing, and I think he said, he asked, you know, is seed pricing up double digits, 10% or more? And I forget whether you said yes or no. If you could just-
I did not give you a specific percent.
Okay. Okay, good. Thank you for the clarification.
You heard correctly, Jeff.
Yeah. Okay. Second, if you look at corn and soybean yields since 2016 and compare them to today, they're lower. They're lower on average for seven years, and they're lower from point to point. In corn, they're in the low 170s, and in beans, they're in the low 50s. What do you make of that? Because I know in your graph you've got yields, you know, going up to the right, but the last seven years there's been downward movement. Is it just bad weather? Is it bad luck? How do you see that, and how do you see your value proposition as you go to the farmer and they get no yield benefit?
Maybe I'll start.
Please.
Let Sam talk about it from a R&D standpoint, and I'll talk about it from a marketplace standpoint. I mean, clearly, you know, there's a year-to-year element to it, Jeff.
Absolutely.
A year like this, where we've got much more variable weather across the marketplace, you know, we've all seen the reports that are coming out from different analysts that are in the field, and USDA had their WASDE yesterday and took yields down. It happens to be a year where we're off-trend yields. It just happens to be one of those years, you know, do I believe that we've exhausted the potential to deliver value? Me, absolutely not. I think Sam can give you the scientific element. You know, our customers still are experiencing opportunities that they haven't. Whether it's absolute yield or whether it's consistency in really harsh years, and I'll use last year as an example.
You know, we had many farmers who experienced yields that they could not have imagined, given the year that we had, the ability for that crop to handle the stresses that are thrown at it in any one year. You know, I think, you know, we know that there's weather variability. No two years are alike. It just so happened that we've had, you know, a handful of weather events, you know, starting in 2019 with the flood and the late planting and, going from there, we've had a series of challenges that have been thrown at us. But you still look at long-term trend, yield is holding. Whether it's corn or beans, you know, we're pushing it forward.
Certainly when we get to the field today, you know, we'll actually talk specifically about that question, Jeff. From a customer standpoint, customers still believe that there's more potential out there. They're striving to continue to drive yield. I certainly don't believe we flattened it out. From a technology standpoint, you know, we continue to strengthen the products we put in the market and actually give them more potential to drive higher yields. Sam?
Yeah, I'd just add to it that, look, we've all the internal data and testing and evaluation. We know we're still continuing to drive the productivity of this crop, both corn and soybeans, higher year-over-year. I think Tim said it well, that you get large weather events that put downward pressure on it, and clearly, we're seeing a little bit of the climate shift coming into play on some of this. What I think is important to remember is if you took today's crop and compared it to a crop, say, 20 years ago and subjected them to the same environmental conditions, you'd see substantially more yield out of today's crop in those same environmental conditions.
While aggregate yield might be, not on trend line, we know we're still producing a lot more in this crop that was 20 year, you know, a little bit older or didn't have as much technology. We continue to see the value being created, and it's important that we do that as we continue to push against some of this climate change that we're up against.
Thanks, Tim. Next question.
Hi. Thanks. Josh Spector with UBS. Just a question longer term on Enlist in the U.S. soy strategy. You benefited the past few years from market share gain. How does the strategy shift as it becomes more holding onto market share? What are the things that you do to make sure you continue to grow earnings, pricing, and that type of business when it's more of a perhaps defensive positioning versus offensive? Thanks.
Well, I think, you know, first is, you know, as I talked today, you know, we've been able to grow the penetration and exceeded 45% of the acres this year with the expectation that we're gonna continue to drive that over the next several years. You know, what the next big lever from an earnings standpoint is is clearly gonna be continued penetration with our proprietary germplasm. And so we've been able to do this, as I said, with about 25% of our sales today would be Corteva bred E3 varieties. That is rapidly transitioning and will be about 95% by 2025. It's a huge lever in terms of driving profitability.
When you look at successive generations, you know, we made an announcement here the last few weeks. Sam referred to it in his talk with BASF. You know, we kinda gave you successive generations of technology. How do we not just establish E3 as the leader in the marketplace, but continue to improve on it? We've got, you know, really three series of agreements with BASF that'll continue to enhance it. The first product to come out will be a nematode-resistant gene that we'll stack into the E3 system, followed by proprietary PPO mode of action, and then there's a successive new mode of action that'll be stacked further down the road. That really gives it long life.
E3 becomes that foundation, and then we can continue to build off of that as we go forward. Certainly, we know we don't have an entitlement to a monopoly position in the market. We know that there'll be competition, but what's gonna allow us to continue to add value and continue to enhance the utility of that E3 foundation is to build off of it with successive generations of product concepts.
Great. Maybe we'll jump to one question online. "Please provide some more details on crop protection strategy regarding fruits and vegetables. What's profitability versus other crops? What's the growth profile, and how large can we think this segment might become overall? Will new products be developed internally, or will acquisitions be part of the strategy?
Sure. Thanks for the question. It's good to see people are listening. Fruit and vegetables is a big piece of our portfolio in crop protection. How big can it get? You know, today we're about 9% of the total market share today. When you begin to look at the slides you'll get back here in a little while, but it has the new products on it. You know, look at the ones that are going into fruits and vegetables, and there's quite a few, especially in the insecticides and fungicide market. Those are key areas for us as we go into those fruits and vegetables around the world.
Some of the biologicals going in are also big in the fruits and vegetables. You know, as we get more into that space, you'll see that benefiting us as well and put new products into the market. Finally, you know, your question around margin. I'll say it is favorable to our normal margin you see within our crop protection portfolio. It's a good space for us all the way around, not only from, you know, the new products that are coming, the position that we're in and the crops that we're on around the world. You know, the outlook, the future looks good from that standpoint.
Thanks, Robert. Next question.
Thank you. Dan Rizzo from Jefferies. You mentioned $1 billion franchises in natural and naturally inspired fungicides and insecticides. Does that mean $1 billion in natural and $1 billion in naturally inspired, or $1 billion in insecticides and $1 billion in fungicides? Just a clarification on the language.
Yeah. I'll jump, but I'm not sure where we mentioned it two different places if it's mine or Sam, so I can talk about the Spinosyns franchise.
Okay.
The Spinosyns franchise will be $1 billion in sales by next year on an annual basis. That's the Jemvelva, Qalcova products that you might be familiar with. That's the one that we just completed the expansion of 50% that we said would, you know, by 2025, we expect to have that fully utilized.
Yeah. Maybe Sam can comment. The way we're thinking about this is the Enlist platform will be a billion-dollar business. Then Robert's just mentioned the Spinosyns franchise, single AI, multiple products, $1 billion of revenue. Then we lump the three naturally inspired fungicides that are in the market now and will come into the market in the next three to five years, and then at the end of the decade. You put that together, we believe that portfolio of fungicides sustainably advantage leading-edge technology, that will become a billion-dollar franchise. We'll move from on the cusp of having two $2 billion-dollar franchises for those two to a third platform of being a billion-dollar business. That's the message we were delivering today.
Thank you.
Next question.
Thanks. Adam Samuelson with Goldman Sachs. Just a question on precision ag and digital broadly is something that maybe didn't get as much focus in the presentation today as it may have in the past. I'm just trying to get a sense how the company feels its investment that is in that realm. Do you think you have enough right to play? Do you have enough access to the farmer data to actually be able to get them the yield-based outcomes and evidence-based outcomes that they need? Is that something from an M&A perspective that you might need to add on to the portfolio?
Adam, I'll have Sam comment on what we're working on, but let me kinda highlight our shift in thinking on our digital approach. In the early days, you know, the entire industry, Corteva was involved in this, but the entire industry thought that there would be, you know, a huge value to unlock by selling software as a service. Many companies went into that space. I think we've all realized that that's very difficult. From a Corteva perspective, one of the decisions we didn't really highlight it too much today, but one of the decisions we've made is we're rethinking our digital strategy, and we're gonna move away from selling software as a service.
We really want our digital tools to be well integrated into our seed and CP platforms, helping growers make informed decisions, unlocking yield, which will be key. Like you mentioned, the data, what can we bring to growers that will drive value? Sam can now take it from there and kind of give you his perspective on what that next level of thinking will be for us from a digital strategy perspective. Go ahead, Sam.
Yeah, Adam, great question, and Chuck said it well, that we've shifted our thinking internally. An example on the seed platform where, you know, the advantage we have is our internal knowledge about how products perform, genetic information. The ability to get farmer data, really, there's a number of platforms out there that are making it fairly simple to assemble and bring data together once you have that permission from the farmers to access that data. That's where, especially in the Pioneer brand, that connection, that trusted advisor that we have with our agents really lets us have that touch with the farmers and be able to access and get that information.
We've been able to pull that together and demonstrated that, look, when you apply logic and analysis and algorithms to that data at scale, you actually see a bump up in your product performance because you do a better job at placing those products and a better job at helping farmers on how to grow those products. It very much is part of our strategy. Digital and data insights are very critical to us for both our seed and crop protection system going forward.
Thanks, Sam. Another one online. Looks like Latin America offers a nice growth opportunity. Can you please add further details on how the trajectory will play out over the next three years? Is it linear or may we see a step change?
You wanna just hit seed and CP?
Sure. I'll start on the seed side. You know, we've had nice steady growth. I'd say strong growth in seed in Latin America for the last several years. On the seed side, it's one of the few areas in the world where you continue to see an increase in the number of planted hectares every year. Most markets are fairly mature in the sense of, you know, a certain n-amount of land is available for cultivation, and we still see an expansion there. We still see an expansion in terms of the value on a per hectare basis as well. Farmers, you know, they're very technology savvy, but they continue to really push and adopt more and more technology as they strive to drive productivity on their farm gate.
We're very optimistic about it. Certainly our portfolio with the introduction of Conkesta E3 opens the door for us to participate on a very valuable market that we've had limited participation. I would say we're gonna see strong, steady growth is how I'd describe it. It's gonna be some volume. It's gonna be some pricing, and certainly our ability to go out there and access some new area that didn't exist before. I'd say steady on the seed side.
Thanks, Tim.
Yeah, from a crop protection standpoint, very similar from a steady increase. You know, we think the crop protection down there is two pieces. Yes, we're growing the top line, and you've seen the tremendous growth rates we've reported in the first half and what's going on down there. Second piece of it is the margin as well has continued to increase as well, and that has to do with, you know, getting new products in, the new product introductions, the mix. I had opportunity to sit with several growers while I was down there and, you know, they have significant challenges just like everywhere else in the world, but the new technology is one that they're extremely interested in.
As we continue to move the differentiation more and more in that market as well, I think you'll continue to see a general increase over the next several years because demand is strong and that market has continued to grow.
Thanks, Robert. Any more questions in the room?
All right. PJ Juvekar. I'll get one more. You know, John Deere in particular is working on this mechanical system where they can identify with a camera, whether it's, you know, whether it's a weed or a crop, and they can zap the weed with some herbicide. They claim that they can reduce herbicide application by as much as two-thirds.
I don't know the data behind it, whether it's true or not, but when a company like that is promoting that technology, does that worry you about sort of the volumes going forward?
Yeah. PJ, let me address that. I think certainly we would agree that any time we can try to do more with less, we're all over that as an organization. The Deere See & Spray technology is pretty interesting. It's also quite expensive. I think from our perspective, what we're trying to do with our chemistry and biology products now is just to drive that as low use rate as we possibly can get. Sam hit the highlights on some of our new products like Reklemel, for example. You know, you need one sugar pack on an acre. You can use standard technology, so standard application technology. I think there's gonna be multiple solutions and options, and we wanna give growers a scientific answer, not maybe a mechanical answer.
If we can drive those chemistry use rates down really low, and still accomplish the efficacy levels that they need, but using standard equipment, I think that's another very good option, I think, for farmers to assess as they work through driving their farming operations to be profitable and sustainable.
Yeah, I think we've got time for one more question.
Thank you. Vincent Andrews from Morgan Stanley again. Just thinking about the balance sheet. You know, Chuck, I remember when you started, I remember one of the calls you said the board's gonna start looking at the balance sheet, and then I think you got on this sort of cost odyssey that we've now completed and we have out there, which is great. Maybe Chuck and Dave, could you just address, you know, you've got the large cash balance, you don't have that much actual notional dollar-denominated debt. Where should the balance sheet go over the next couple of years? I mean, if you look at the peer set both today and historically, they tend to carry, you know, 1.5-2 times, you know, debt to EBITDA.
Where do you think this business ultimately should wind up, and when do you think, you know, the board will get to determining that?
Yeah. Let me give you my perspective on where we are in our thinking, and then I'll then Dave can answer the specific balance sheet question, of course. First you deal with strategy and the operating model. We set up the incentive program, the culture, all the things we've just talked about today, and we're feeling really good about those decisions. Now we're turning our attention with our board of directors on the. If you look at our plan, you know, obviously we're gonna have a lot of financial horsepower, tons of flexibility, and the allocation of that capital is gonna be put to work, and it's gonna be put to work to drive long-term shareholder value. We don't think that we have to make a lot of tough choices.
We think we're gonna have the strength to do everything we want to do. A big element has been returning capital to shareholders. We just announced the $2 billion buyback today. Now if you think about that framework, we're gonna spend a lot of time with our board in the next few quarters addressing that now that we've kinda passed the strategic decisions and choices that we have. The balance sheet I consider to be a strategic asset for the company. I said it many times. I was really impressed when I came here how strong the balance sheet was. Now I'm gonna turn it over to Dave to talk about the specifics.
That's a very, very good question. Chuck, I appreciate the perspective in terms of where we are in the planning and the work we're doing going forward. I think the starting point is obviously maintaining our investment grade rating. I think that's just fundamental for the company given the seasonality of the business and the seasonality of the cash flow. That gives us a lot of flexibility. We're gonna be providing, as we go forward, more details around what that does mean. We give you the broader framework today, which is really a little more color I think than we've given you in the past, but we'll provide more of that as we go forward.
Great. Well, that concludes the executive presentation portion of our event today. Thank you for your participation. For the virtual attendees, thank you for sticking with us here. Thanks again to Sam for joining us online. Appreciate your interest in Corteva.