August 13, 2008

 

Monsanto expects 25 percent increase in corn seeds profit for FY08
 

 

Monsanto Co. said Tuesday (August 12, 2008) that it is in a position between 2008 and 2012 to launch multiple technologies that would widen its competitive lead, and create even greater growth from seeds and traits.

 

The St. Louis, Missouri-based company released the statement at its field research facility in Monmouth, Illinois, where investors got a first-hand look at the next-generation products in the company's R&D pipeline.

 

For fiscal year 2008, the company expects gross profit in the corn seeds and traits business to grow by approximately 25 percent. Corn gross profit would grow another 25 percent –30 percent in fiscal year 2009 through high-yielding hybrids, the company said.

 

The gross profit expectation reflects an assumption of 90 million planted acres in the key US corn market for 2009.

 

Monsanto expects to extend its eight-straight years of corn share gains as farmers continue to switch to higher yielding seeds.

 

Monsanto recently increased its 2009 share expectation for its national seed brand, DEKALB, to 2 or more points, up from its previous range of 1-2 share points.

 

At the same time, its American Seeds, Inc., (ASI brands) also gained 1-2 share points in 2008, establishing ASI's seed position at 10-11 percent of the total market. The company expects ASI's organic growth to continue with a 1-share point gain targeted for 2009

 

The company said that US farmers planted about 28 million acres of the company's triple-stack corn in 2008, above the original projections of 25 million to 27 million acres.

 

For 2009, Monsanto expects triple-stack acreage to grow to 34 million- 35 million acres, reflecting more than 65 percent penetration in the DEKALB and ASI brands.

 

The company reiterated its target to grow its share in key international corn geographies by 1-2 share points in 2009. To achieve this, it is launching new trait packages in both Argentina and Brazil.

 

Going forward, Monsanto said it would focus on next generation biotechnology traits that includes drought-tolerant corn and corn with enhanced nitrogen use efficiency.

 

Soy business to grow 15 percent  

 

Gross profit of the soy seeds and traits business globally is expected to grow by approximately 15 percent for fiscal year 2008.

 

An additional five percent in soy gross profit is expected in fiscal year 2009, even as US planted acres decline to 70 million acres from the estimated 74 million acres planted in the current year.

 

The centerpiece for its technology showcase next year is the Roundup Ready 2 Yield soy technology scheduled for a controlled commercial release on 1 million to 2 million acres in 2009.

 

The company said that investors will see a seed production field of Roundup Ready 2 Yield soy that will support more than 1,000 acres of commercial seed to be sold in 2009, one of dozens of seed production field planted in the current year.

 

According to Monsanto, at current commodity values, Roundup Ready 2 Yield soy's yield advantage compared to the first-generation Roundup Ready varieties creates about US$35-to-US$65 of incremental yield value to farmers.

 

The Roundup Ready 2 Yield soy has already won regulatory approval in Mexico, Australia and New Zealand and has been received favourably by the European Food Safety Authority which declared the soy variety safe for import as food or feed.

 

Monsanto said it would highlight key soy pipeline products under development that would be stacked with the Roundup Ready 2 Yield trait.

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