September 21, 2010

New modified corn seeds from Monsanto yield less than older product

Early harvest data show some of Monsanto's new SmartStax corn hybrids are missing projections by yielding less than cheaper seeds that use older technology, according to the company.

Some SmartStax seeds, which have eight added genes to protect against weeds and bugs, have shown yield variability below VT Triple seeds, which have three extra genes, St. Louis-based Monsanto said in a statement. Yields of other SmartStax hybrids are on par with the so-called triple stacks, the company said.

Monsanto, led by CEO Hugh Grant, in December promoted SmartStax, its most expensive seed, as "the highest yielding corn product available," topping triple stacks. The company is counting on SmartStax to help boost profit as much as 17% a year after earnings from Roundup herbicide collapsed as competitors cut prices on generic versions.

"Some farmers are wondering whether there might possibly be a yield drag with the insertion of multiple genes," Mark Gulley, a New York-based analyst at Soleil Securities said. "The significance of the data is still limited because the harvest hasn't been completed yet in the heart of the Corn Belt."

Monsanto said the data reflects less than 10% of the US corn harvest. SmartStax corn is mostly growing in the northern Corn Belt where the harvests have not begun, the company said.

Monsanto still expects SmartStax will yield 5-10% more than triple stacks when all the data is collected because the seeds offer better insect resistance, genetic improvements and the ability of farmers to reduce plantings of conventional corn in a so-called refuge, said Kelli Powers, a spokeswoman.

SmartStax reduces the conventional-corn refuge to 5% of biotech acres from 20% for earlier technologies. Such refuges are required by regulators to prevent bugs from developing resistance to pesticides made in the modified corn.

SmartStax traits are working as expected, reducing insect damage more than 70%, the company said.