Monsanto's new corn, soy seeds may miss 2010 forecast

Monsanto's new GM corn and soy may be planted on fewer US acres in 2010 than previously expected.

Roundup Ready 2 Yield soy may fall 20% short of the bottom of the company's forecast of eight million to 10 million planted acres, Chief Financial Officer Carl Casale said. SmartStax corn seed may miss the company's four million-acre target also by 20%, he said.

Chief Executive Officer Hugh Grant is counting on the two new varieties to help boost seed earnings to as much as US$7.5 billion in 2012 from US$4.5 billion in 2009. The shortfall will reduce earnings less than five cents per share this year and will not hurt long-term goals, Casale said. Farmers are trying the new products in the numbers expected, only on fewer acres, he said.

The grower resistance is because of the risk profile, said New York-based analyst Mark Gulley. Any new product has a higher risk profile than a proven product and growers want to see results before deciding to plant the new product, according to Gulley.

Monsanto said new soy seeds, led by Roundup Ready 2, will add US$425 million to gross profit by 2012, and new corn seeds, led by SmartStax, will add US$2 billion to profit.

Casale denied that Monsanto's Roundup Ready 2 soy seeds will be competing against ''free seed'' after 2014, when the original Roundup Ready soy lose patent protection and growers can save seed from their harvest and replant it the following year. The cost of cleaning, treating and overplanting, as is typical for lower-quality saved seed, makes farmers' actual cost about US$30 an acre, he said.