Monsanto Co. will cut prices on its newest genetically modified seeds to accelerate adoption and help boost profit by about 15% annually starting in fiscal 2011.

Discussions with 1,200 growers and weaker-than-forecast sales of SmartStax corn seed and Roundup Ready 2 Yield soy drove the decision to lower prices, CEO Hugh Grant said. Profit will increase 13% to 17% a year from this year's company forecast of at least US$3.10 a share, Grant said.

"A penetration pricing approach is more focused on rapid adoption," Grant said  after the company reported a decline in fiscal second-quarter earnings. "This is a path that will allow us to deliver strong earnings growth consistently."

Monsanto is unlikely to meet its 2007 goal of doubling gross profit by 2012, he said. Generic versions of Roundup weed killer forced Monsanto to halve herbicide prices and the company said it now expects sales of SmartStax and Roundup Ready 2 to be at least 25% lower than it had forecast. Roundup Ready 2 was priced 42% more than the original herbicide- tolerant beans introduced in 1996, and SmartStax was 17% more than earlier premium corn seed.

"We are re-thinking our pricing strategy in corn and soy so we can reinvigorate the business," Chief Financial Officer Carl Casale said.

In addition to pricing competition from competitors such as DuPont Co.'s Pioneer unit, the second-biggest seed company, Monsanto also needs to cope with lower farmer incomes as crop prices fall.