September 14, 2011

Monsanto expected to increase corn seed prices

Monsanto Co. announced that its corn seed prices will rise 5-10% on average due to improved performance and higher production costs, according a Bloomberg report.

The price increase reflects higher yielding genetics and more sales of biotechnology, including the newest insecticide- producing crops according to the Executive Vice President. Monsanto also needs to recoup payments to seed growers, which are rising with corn prices.

Higher prices will help the St. Louis-based company achieve its goal of boosting earnings 13 to 17% a year. Monsanto gained share in US corn this year and didn't lose share in soy. The company has not gained in those markets in three years. Monsanto this year lowered prices after farmers increased purchases from DuPont Co.'s Pioneer unit.

Monsanto will have enough seed for next year after overcoming drought and other weather issues through contracts with growers in a wide geographic area. It also plans to raise seed in Latin America. The higher cost of production is within the company's assumptions, he said.