The USDA has put forward a plan in response to the ruling by a judge which would disallow the planting of Monsanto (NYSE:MON) sugar beets next year.
While offering several options in their plan, the USDA prefers to allow the planting of sugar beets in 2011 because it could result in a 20 percent drop in sugar production in the U.S. if they don't.
A court in California ruled the sugar beets could be produced again until May 2012 while a complete environmental impact study was performed; something the judge determined allegedly hadn't been done.
The USDA gave Monsanto permission to plant the sugar beets in 2005. Genetically modified crops are usually enhanced with the ability to resist Roundup herbicide, which is also produced by Monsanto.
Showing posts with label Genetically Modified Sugar Beets. Show all posts
Showing posts with label Genetically Modified Sugar Beets. Show all posts
Wednesday, November 3, 2010
Friday, October 22, 2010
Monsanto (NYSE:MON) Sugar Beet Ban Could Lower US Sugar Production by 20 Percent
In a study by the US Department of Agriculture on the ruling by District Judge Jeffrey White on banning Monsanto's (NYSE:MON) Roundup Ready sugar beets until further testing, the conclusion is sugar production in the U.S. could drop by 20 percent in 2011.
Daniel Colacicco, a USDA economist, concluded, "The limited availability of conventional seed will severely restrict plantings of sugar beet in 2011."
White ruled the sugar beet seed of Monsanto couldn't be planted again until more extensive environmental impact studies were completed.
In 2009, genetically modified sugar beet seeds accounted for about 95 percent of the crop grown in the U.S. Estimates are about 1.6 million tons of sugar beet production will be lost in 2011 from the decision.
Some thing there will be intervention of some type to keep that from happening.
Sugar beets already in the field are allowed to be harvested this year.
Daniel Colacicco, a USDA economist, concluded, "The limited availability of conventional seed will severely restrict plantings of sugar beet in 2011."
White ruled the sugar beet seed of Monsanto couldn't be planted again until more extensive environmental impact studies were completed.
In 2009, genetically modified sugar beet seeds accounted for about 95 percent of the crop grown in the U.S. Estimates are about 1.6 million tons of sugar beet production will be lost in 2011 from the decision.
Some thing there will be intervention of some type to keep that from happening.
Sugar beets already in the field are allowed to be harvested this year.
Thursday, October 7, 2010
Monsanto (NYSE:MON) Price Target Raised by JPMorgan (NYSE:JPM)
Response to the volatility and unpredictability of Monsanto (NYSE:MON) has generated responses from analysts all over the board. The latest is from JPMorgan (NYSE:JPM), who increased their price target on Monsanto from $47 to $49. They maintain a "Neutral" rating on the seed company.
In a report JPMorgan said, "We rate Monsanto Neutral for year-ahead performance. Monsanto's business model for F2011 was built on moving its customer base from its triples to SmartStax at a price premium. The poor yield results for SmartStax in Southern Illinois, if duplicated in the northern Corn Belt, could call the model into question. Moreover, we believe Monsanto has a healthy valuation selling at 9.6x EBITDA and a 17.4x multiple of EPS for F2011E."
There is no doubt in the short term that Monsanto is completely reliant upon the results of their SmartStax corn seed in the northern corn belt. If it is as bad as it was in Illinois, they're going to have difficulty building momentum for some time, even with their strong advantage in other seed varieties.
They also took a blow when their sugar beet seeds were ruled against by a judge, and unless overruled or adjusted, won't be able to be planted next season.
In a report JPMorgan said, "We rate Monsanto Neutral for year-ahead performance. Monsanto's business model for F2011 was built on moving its customer base from its triples to SmartStax at a price premium. The poor yield results for SmartStax in Southern Illinois, if duplicated in the northern Corn Belt, could call the model into question. Moreover, we believe Monsanto has a healthy valuation selling at 9.6x EBITDA and a 17.4x multiple of EPS for F2011E."
There is no doubt in the short term that Monsanto is completely reliant upon the results of their SmartStax corn seed in the northern corn belt. If it is as bad as it was in Illinois, they're going to have difficulty building momentum for some time, even with their strong advantage in other seed varieties.
They also took a blow when their sugar beet seeds were ruled against by a judge, and unless overruled or adjusted, won't be able to be planted next season.
Tuesday, October 5, 2010
Will Monsanto (NYSE:MON) Thrive, or Just Survive?
There are a lot of challenges in making informed decisions about a company like Monsanto (NYSE:MON), as the anti-business press loves to take a company like this and pummel them.
What makes that a problem isn't the negative press, but the believing of the negative press, which usually entails a very skews and one-sided presentation of the company.
As far as investing goes, this is a disaster, because if the market is buying the company, that means it is viable, and has something to it beyond the emoting media attempting to affect public opinion.
So with Monsanto, there is very little middle ground. People either hate if for the perceived monster seeds they've created, or love it because they're perceived to be an answer to what will ultimately become a global food crisis.
That's of course a generalization, as there's all sorts of secondary elements like emerging super weeds from Roundup or seeds which aren't performing as they were expected to as far as yields go.
There is no doubt an effort going on to destroy Monsanto, which I doubt will succeed, as the uncertainty about the ability to supply food to populations is just too big to allow potential answers to be destroyed.
Social upheaval would emerge if food was scarce or too highly priced, as food riots have shown over the last couple of years.
So there is no doubt Monsanto will survive. The question is whether it will be able to thrive or not.
Monsanto has a strong competitive advantage with certain seeds, and a potentially strong pipeline. The trouble is the courts removed the sugar beet seed they produced from market, and unless there's intervention, that will remain that way for at least a couple of years. What other seeds could be hindered from being brought to market, even with them being in the pipeline?
If the SmartStax corn seed doesn't perform as expected, as early results have shown, that also shows there could be holes in the pipeline as well.
These are just a couple of the variables involved.
Monsanto reminds me a lot of the oil industry. Even though the problems with the BP (NYSE:BP) oil spill gave opponents of the industry a lot of fuel to fight them with, oil exploration continues to grow, and it's not going to go away any time soon, even though some in the financial press attempt to make it look that way.
Monsanto has suffered some black eyes in the battle lately, but demand for their products and the rising population make it very unlikely they'll be kept down for a long period of time.
Short term they're going to struggle immensely, but more than likely, unless they underperform on things they have control of, they will ultimately come back strong, with solid control of major seed markets.
The real major unknown is if laws are created to stop them. Other than that, I don't see them being held down in the long term.
There probably be more pain in the short term before they begin their recovery.
What makes that a problem isn't the negative press, but the believing of the negative press, which usually entails a very skews and one-sided presentation of the company.
As far as investing goes, this is a disaster, because if the market is buying the company, that means it is viable, and has something to it beyond the emoting media attempting to affect public opinion.
So with Monsanto, there is very little middle ground. People either hate if for the perceived monster seeds they've created, or love it because they're perceived to be an answer to what will ultimately become a global food crisis.
That's of course a generalization, as there's all sorts of secondary elements like emerging super weeds from Roundup or seeds which aren't performing as they were expected to as far as yields go.
There is no doubt an effort going on to destroy Monsanto, which I doubt will succeed, as the uncertainty about the ability to supply food to populations is just too big to allow potential answers to be destroyed.
Social upheaval would emerge if food was scarce or too highly priced, as food riots have shown over the last couple of years.
So there is no doubt Monsanto will survive. The question is whether it will be able to thrive or not.
Monsanto has a strong competitive advantage with certain seeds, and a potentially strong pipeline. The trouble is the courts removed the sugar beet seed they produced from market, and unless there's intervention, that will remain that way for at least a couple of years. What other seeds could be hindered from being brought to market, even with them being in the pipeline?
If the SmartStax corn seed doesn't perform as expected, as early results have shown, that also shows there could be holes in the pipeline as well.
These are just a couple of the variables involved.
Monsanto reminds me a lot of the oil industry. Even though the problems with the BP (NYSE:BP) oil spill gave opponents of the industry a lot of fuel to fight them with, oil exploration continues to grow, and it's not going to go away any time soon, even though some in the financial press attempt to make it look that way.
Monsanto has suffered some black eyes in the battle lately, but demand for their products and the rising population make it very unlikely they'll be kept down for a long period of time.
Short term they're going to struggle immensely, but more than likely, unless they underperform on things they have control of, they will ultimately come back strong, with solid control of major seed markets.
The real major unknown is if laws are created to stop them. Other than that, I don't see them being held down in the long term.
There probably be more pain in the short term before they begin their recovery.
Monday, September 27, 2010
Beet Farmers Devastated Over Monsanto (NYSE:MON) Seed Ban
The decision by seemingly activist Federal District Court Judge Jeffrey White to ban genetically modified sugar beet seeds from Monsanto (NYSE:MON) has farmers crushed under the uncertainty of what will happen to their industry going forward.
White stated in his ruling, agreeing with the Center for Food Safety, which filed the lawsuit against Monsanto, that they had not been tested thoroughly enough to ensure safety of human consumption and possible environmental risks.
The Animal and Plant Health Inspection Service or APHIS, a unit of the USDA, deregulated the sugar beet seeds, leading to the lawsuit.
White ordered the USDA to prepare an environmental impact statement and to approve the crop again. That could take up to a period of two years, or possibly more.
Similar to their other genetically modified seeds, Monsanto makes them strongly resistant to their Roundup herbicide, which allows farmers to spray the beets without concern of damaging the crop.
The benefit is much higher yields and significantly lower cost inputs, as the need to water as much, use fuel and labor costs are lowered.
Proponents of the lawsuit and decision say it shouldn't be a problem for sugar beet farmers, as they can just go out and buy sugar beet seed, which they assert is plentiful.
According to Luther Markwart, executive director of the American Sugar Beet Growers Association, it's far from as simple as that.
As far as the seed part of it goes, finding non-genetically modified seed isn't as easy as stated. And once it is found, Markwart said it will be at least two to three years old, with no guarantees as to the viability of the seed. That assumes all sugar beet growers can even obtain the seed in the first place.
Markwart added that very little conventional seed has been grown for planting in the last couple of years, making it nowhere near as easy to find as some say.
He said, "If you can even get conventional seed it would be two to three years old, so its viability is a question."
That's only the beginning of problems for sugar beet growers though. New equipment like weed sprayers have been acquired to make way for the Roundup Ready seed. Farmers would have to go out and buy old equipment to use on the old seeds.
Just as difficult will be finding past herbicides used on conventional sugar beets, said Markwart. The market is no longer there, as approximately 95 percent of sugar beets are grown in the U.S. using genetically modified seed.
He concluded, only the Animal and Plant Health Inspection Service can save things for American sugar beet farmers, which has the authority to deregulate the beets partially or conditionally, which would pave the way to planting them in the coming spring season.
White stated in his ruling, agreeing with the Center for Food Safety, which filed the lawsuit against Monsanto, that they had not been tested thoroughly enough to ensure safety of human consumption and possible environmental risks.
The Animal and Plant Health Inspection Service or APHIS, a unit of the USDA, deregulated the sugar beet seeds, leading to the lawsuit.
White ordered the USDA to prepare an environmental impact statement and to approve the crop again. That could take up to a period of two years, or possibly more.
Similar to their other genetically modified seeds, Monsanto makes them strongly resistant to their Roundup herbicide, which allows farmers to spray the beets without concern of damaging the crop.
The benefit is much higher yields and significantly lower cost inputs, as the need to water as much, use fuel and labor costs are lowered.
Proponents of the lawsuit and decision say it shouldn't be a problem for sugar beet farmers, as they can just go out and buy sugar beet seed, which they assert is plentiful.
According to Luther Markwart, executive director of the American Sugar Beet Growers Association, it's far from as simple as that.
As far as the seed part of it goes, finding non-genetically modified seed isn't as easy as stated. And once it is found, Markwart said it will be at least two to three years old, with no guarantees as to the viability of the seed. That assumes all sugar beet growers can even obtain the seed in the first place.
Markwart added that very little conventional seed has been grown for planting in the last couple of years, making it nowhere near as easy to find as some say.
He said, "If you can even get conventional seed it would be two to three years old, so its viability is a question."
That's only the beginning of problems for sugar beet growers though. New equipment like weed sprayers have been acquired to make way for the Roundup Ready seed. Farmers would have to go out and buy old equipment to use on the old seeds.
Just as difficult will be finding past herbicides used on conventional sugar beets, said Markwart. The market is no longer there, as approximately 95 percent of sugar beets are grown in the U.S. using genetically modified seed.
He concluded, only the Animal and Plant Health Inspection Service can save things for American sugar beet farmers, which has the authority to deregulate the beets partially or conditionally, which would pave the way to planting them in the coming spring season.
Friday, September 10, 2010
USDA Sued Over Monsanto (NYSE:MON) Sugar Beet Permits
Several groups who resist the introduction of genetically modified seeds has sued the U.S. Department of Agriculture over the decision to allow Monsanto (NYSE:MON) to plant limited amounts of sugar beets.
Allegedly the approval is in opposition to a court ruling in August which disallowed the future planting of genetically modified sugar beets.
This is in response to the USDA giving Monsanto the go ahead to plant sugar beet seeds which weren't allowed to go to flower.
If allowed to go forward, supposedly the plantings could contaminate nearby crops, said the complaint.
Monsanto isn't a defendant in the lawsuit, although the case centers around their sugar beet seeds which are resistant to the herbicide Roundup.
Allegedly the approval is in opposition to a court ruling in August which disallowed the future planting of genetically modified sugar beets.
This is in response to the USDA giving Monsanto the go ahead to plant sugar beet seeds which weren't allowed to go to flower.
If allowed to go forward, supposedly the plantings could contaminate nearby crops, said the complaint.
Monsanto isn't a defendant in the lawsuit, although the case centers around their sugar beet seeds which are resistant to the herbicide Roundup.
Tuesday, August 24, 2010
Goldman (NYSE:GS) Raises Monsanto (NYSE:MON) Price Target, Estimates
Goldman Sachs (NYSE:GS) raised its price target on Monsanto (NYSE:MON), along with its earnings estimate, and have a "Buy" rating on the seed company.
In a mixed response to their products this year, Monsanto recently got a win, after having their sugar beet seeds banned until more studies are done on them.
Brazil recently approved their Roundup soybean seeds, opening up the potential for a large market.
That still has to include the approval of trading partners of Brazil, who must let them know if they'll acquire the finished product if Brazil grows it.
Assuming that happens, it will be a big boost to Monsanto and shareholders.
In a mixed response to their products this year, Monsanto recently got a win, after having their sugar beet seeds banned until more studies are done on them.
Brazil recently approved their Roundup soybean seeds, opening up the potential for a large market.
That still has to include the approval of trading partners of Brazil, who must let them know if they'll acquire the finished product if Brazil grows it.
Assuming that happens, it will be a big boost to Monsanto and shareholders.
Friday, August 20, 2010
Monsanto's (NYSE:MON) Soybeans Approved in Brazil
Monsanto (NYSE:MON) has had a mixed bag of wins and losses recently, and after the ban on genetically modified sugar beets recently until further studies are done, they needed a win, and they got it with the approval from Brazil for their Roundup Ready 2 Yield Soybeans.
As a result, Monsanto will be allowed to market the soybeans in the lucrative Brazil market.
This is the first introduction of a crop with a biotechnology trait designed for outside the American market.
The next step in the process will be to get approval from global markets for the soybeans in order to make growing it in Brazil a commercially viable enterprise.
Brazilian approval is one thing, approval to import the soybeans form other countries is another.
As a result, Monsanto will be allowed to market the soybeans in the lucrative Brazil market.
This is the first introduction of a crop with a biotechnology trait designed for outside the American market.
The next step in the process will be to get approval from global markets for the soybeans in order to make growing it in Brazil a commercially viable enterprise.
Brazilian approval is one thing, approval to import the soybeans form other countries is another.
Wednesday, August 18, 2010
Monsanto (NYSE:MON) Sugar Beet Ban Troubling to Farmers
The decision by U.S. District Judge Jeffrey White to halt the use of genetically modified sugar beet seeds from Monsanto (NYSE:MON) has many farmers troubled, as the vast majority of sugar beet seeds are now modified seeds.
Judge White even said farmers could just go back to planting regular sugar beet seeds, showing he should stick to being a judge and not attempting to be a farming expert.
Farmers say, "There's not enough seed available in the non-GMO (genetically modified organism) varieties to plant all the acres that would be put into sugar beets."
If the ruling were to stand, seeds would have to be imported in an attempt to find enough to meet the demand in the United States. Seed prices would also skyrocket because of increased demand and lower supply.
Short term this won't have a detrimental effect on farmers and the market, but if it were to carry on too long, next spring planting season could be a disaster.
The ban was put in place by the judge until an environmental study could be completed, but hopes are to allow interim planting while the study is being conducted.
Judge White even said farmers could just go back to planting regular sugar beet seeds, showing he should stick to being a judge and not attempting to be a farming expert.
Farmers say, "There's not enough seed available in the non-GMO (genetically modified organism) varieties to plant all the acres that would be put into sugar beets."
If the ruling were to stand, seeds would have to be imported in an attempt to find enough to meet the demand in the United States. Seed prices would also skyrocket because of increased demand and lower supply.
Short term this won't have a detrimental effect on farmers and the market, but if it were to carry on too long, next spring planting season could be a disaster.
The ban was put in place by the judge until an environmental study could be completed, but hopes are to allow interim planting while the study is being conducted.
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