Dave Anderson
Executive Vice President, Chief Financial Officer at Corteva
Thanks, Chuck, and welcome everyone to the call. Let's start on Slide 6, which provides the financial summary for the fourth quarter and the full year. We ended the year with another solid quarter of continued growth. Compared to prior year, organic sales in the quarter increased by 9%, with gains in both segments. Global pricing was up 8% by a continued focus on our price for value strategy with double-digit pricing gains in seed led by Latin America. We delivered more than $260 million of operating EBITDA in the fourth quarter, an 11% increase from the same period last year.
For the full year 2021, organic sales were up 9% to $15.5 billion. Crop Protection growth was led by continued demand for new products, which saw an increase of more than $450 million year-over-year. Seed sales improved on strong pricing execution particularly in corn, which was up 5% globally, coupled with increased planted area in the US and strong demand for corn in Latin America.
Full year operating EBITDA of $2.58 billion was up 23% over 2020. Pricing and productivity more than offset cost headwinds, driving almost 180 basis points of margin improvement. This improvement is a result of focused execution by the team while managing through challenging supply chain dynamics and also continued cost inflation.
Let's go now to Slide 7, where you can see the strong top line results across every region. In North America, organic sales were up 4% for the year. Seed sales benefited from increased planted area for both corn and soybeans as well as the continued industry-wide penetration of Enlist E3 soybeans, which represented about 35% of the US soybean market in 2021. We finished the year with corn price up 2% in North America, while soybean price was down 2% driven by competitive pressure in the market.
North America Crop Protection delivered organic sales growth of 6% on continued demand for new technologies, including Enlist herbicide. Both herbicides and fungicides finished the year with double-digit growth in the region compared to prior year. Crop Protection prices were up 6% in response to rising input costs. Crop Protection volumes were flat year-over-year, in part due to the phaseout of select low-margin products and an approximate $70 million sales impact in the fourth quarter from supply constraints.
In Europe, Middle East and Africa, we had organic sales growth of 6% driven by strong price execution and record sunflower seed volume. In Crop Protection, demand remains high for new and differentiated products, including Arylex herbicide and Zorvec fungicide, which enabled us to drive price and volume and gain market share in the region.
In Latin America, we delivered 27% organic sales growth on strong volume and price gains. Execution on our price for value strategy, coupled with price increases to offset rising input costs led to price gains of 10% compared to the prior year. Seed volumes increased 14% driven by market share gains in Brazil safrinha while crop protection volumes grew 19% on strong demand for new and differentiated products, such as Isoclast and Jemvelva insecticides.
Asia Pacific organic sales were up 3% compared to the prior year, with both volume and price gains. Seed volumes were down largely due to COVID-related demand impacts and competitive dynamics primarily in Southeast Asia. Crop Protection organic growth of 4% was led by continued demand for new and differentiated products, including Rinskor herbicide and Pyraxalt insecticide, both of which had volume gains in the region of more than 40% versus 2020.
Let's now move to Slide 8 for a summary of our '22 guidance. We expect net sales to be in the range of $16.7 billion to $17 billion, representing 8% growth at the midpoint driven by pricing and strong customer demand for new products and our best-in-class technology. 2022 operating EBITDA is expected to be in the range of $2.8 billion to $3 billion, a 13% improvement over prior year at the midpoint. Margins are also expected to improve with pricing and productivity actions more than offsetting further cost inflation, leading to an approximate 80 basis point improvement at the midpoint over prior year. Operating EPS is expected to be in the range of $2.30 to $2.50 per share, an increase of 12% at the midpoint, which reflects lower average share count but also a higher effective tax rate assumption compared to 2021.
Lastly, we expect free cash flow to be in the range of $1.3 billion to $1.6 billion, which reflects more normalized receivables assumptions and replenishment of inventory in 2022. At the midpoint, it translates to an EBITDA to free cash flow conversion of approximately 50%.
Let me talk about now the phasing of the first half versus second half revenue and operating EBITDA for 2022. On revenue, we expect strong revenue growth in the first half with 9% to 10% reported growth, which would imply mid-single-digit growth for the second half. However, given the slower pace of inflation in early 2021 versus where we are today, we're expecting approximately 70% of our 2022 estimated cost headwinds will flow through in the first half. This is largely driven by the seasonal timing of seed costs associated with higher commodity prices and the pace of cost inflation in Crop Protection in 2021, which was more than weighted to the second half of the year. As a result, we expect mid-single-digit growth in operating EBITDA for the first half compared to prior year, whereas our full year guide for operating EBITDA growth is 13% at the midpoint.
Let's now go to Slide 9, where we'll provide some further detail on the key drivers included in the EBITDA guidance. Consistent with prior views, pricing and seeds will more than offset the impact from higher commodity costs. For the year, based on demonstrated value creation of our seed products, we expect a global price lift of mid-single digits in local currency. Partially offsetting this is approximately $375 million of commodity costs, largely from the US and Brazil. And again, we expect the majority of the cost headwind in seed will be recognized in the first half of the year. Increased planted area in Latin America and global demand for our best-in-class technology, including continued penetration of Enlist E3 soybeans are expected to drive volume increases in this segment.
In Crop Protection, demand for new products remained strong and is expected to drive an additional $300 million in revenue for the full year. In addition, we expect cost headwinds to be approximately $300 million as the complex supply chain dynamics and cost inflation will continue at least through the end of the year. Similar to seed, the majority of these costs are expected to be recognized in the first half as we lap a lower cost basis in the first half of the prior year. Price increases will help mitigate these cost headwinds, including another mid-single-digit price increase across the majority of our US Crop Protection portfolio that was implemented in early January.
As it relates to SG&A, we're expecting $100 million in higher costs from investments to support growth and also more normalized bad debt accruals compared to 2021. In addition to pricing, we will continue to use productivity initiatives to drive margin improvement. For 2022, we expect productivity savings of approximately $200 million across both segments. And with a stronger US dollar relative to other key currencies on a year-over-year basis, we estimate a $200 million headwind from translation impact and hedging program costs. In addition to our implemented hedging programs, we'll continue to pursue local pricing where possible to mitigate this currency impact.
Turning now to Slide 10. I want to leave you with what we view to be the key takeaways from today's call. Obviously, we delivered and very, very pleased with our 2021 commitments, including impressive margin growth and cash flow while navigating a dynamic operating environment. As Chuck mentioned, we entered 2022 from a position of strength. We expect a year of attractive growth supported by strong customer demand across the backdrop of a solid global ag fundamentals. We remain confident in our disciplined execution, including pricing and productivity, which will in turn drive margin expansion for the year.
Our balance sheet is strong, which provides us flexibility with our capital deployment strategy and allows us to build our track record of returning cash to shareholders while also continuing to fund growth opportunities. This is bolstered by improved funded status in our US pension plan, which improved to better than 90% at the end of 2021.
In 2022, we expect to return $1 billion to $1.5 billion of cash via dividends and share repurchases. This is on top of the more than $1.3 billion of cash returned in 2021. And it's a clear indication of our commitment to deliver value to our shareholders. Combined, we believe this further differentiates Corteva as we're well positioned to deliver value in 2022 and the years to come.
And with that, I'm going to hand the call back over to Jeff.
