Pivot Bio locks prices for three years, plans rural nonprofit

Pivot Bio locked its product price for three years after cutting it within days of the attack on Iran, CEO Chris Abbott announced Oct. 27 at Naturally Minnesota's Food. Ag. Ideas conference in Minneapolis. The move, he said, signals the company is not tied to synthetic nitrogen markets that have squeezed farm margins this year.

Abbott told attendees that U.S. farmers have absorbed the hardest hit from this year's fertilizer price spike. He also previewed the public launch of the Pivot Institute, a nonprofit the company plans to roll out in the next few months.

What will the Pivot Institute do?

The nonprofit will be open to partners and will address needs farmers raised during Abbott's recent listening tour. Its focus areas include:

• financial and generational planning
• rural community viability
• mental health

"It has literally nothing to do with nitrogen fertilizer in our products," Abbott said.

The institute marks an unusual step for an input maker: direct investment in the social and economic fabric of its customer base rather than in agronomy or product development.

How bad is the input-cost squeeze?

Abbott said the Iran war has put farmers in a worse position than the Russia-Ukraine war did. Fertilizer prices spiked during that earlier conflict too, he said, but grain prices rose with them. This time they have not.

"So now you took my largest inputs and you doubled them, and my revenue didn't change," Abbott said, describing a farmer's position. "And I was already barely squeaking by if I was lucky."

Pivot Bio makes a biological product that produces nitrogen from the air, according to Abbott. Within days of the attack on Iran, the company cut its price and locked it for three years. He said some board members questioned giving up pricing power in a commodity market.

"Because if we're not as technologists being cost deflationary, we're dead anyways," Abbott said.

The pricing decision drew a strong customer response. Abbott said about half of the company's customers signed up for the month-long price-cut program in the first 20 days.

Why did Pivot Bio move to Minnesota?

Pivot Bio relocated from Berkeley, California, to the Twin Cities about a year ago. The company also considered St. Louis, the Bay Area and North Carolina's Research Triangle Park before choosing Minnesota.

Abbott said they picked the state to be closer to farmers, and he tells employees that if they want to know whether a product works or is priced correctly, they should go find the answer themselves.

"Get in your car and drive a half hour, and just go ask," Abbott said.

What did Ecolab's Doug Baker say?

Abbott shared the keynote stage with Doug Baker, a former longtime CEO of Ecolab, which is headquartered in St. Paul. Baker spent 34 years at the company, about half of them as CEO.

Baker said Minnesota's economy has grown at half the rate of the U.S. economy over the last 20 years, and job growth has lagged as well.

"I don't think the state right now is reckoning honestly with where we really stand," Baker said.

He said recruiting people to Minnesota "has gone from quite easy to quite difficult," citing damage to the state's reputation in recent years, including fraud cases.

Both speakers said Minnesota has the pieces to grow its food and agriculture economy but needs to be more honest about where it is falling short.

For Pivot Bio, the coming months will test whether a three-year price lock and a rural-focused nonprofit can hold customer ground while synthetic nitrogen markets stay volatile.