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 Roundup Monsanto. Show all posts
Showing posts with label Roundup Monsanto. Show all posts
Wednesday, November 3, 2010
Tuesday, October 26, 2010
Monsanto (NYSE:MON) Sued by WV Over Alleged Non-cooperation
In an effort to find out if the claims by Monsanto (NYSE:MON) over their Roundup Ready 2 Yield soybeans are proven through test results, the state of West Virginia has sued the company because the allegedly won't cooperate.
The truth is for some reason the usual practice of including a protective order related to the confidential intellectual property information isn't being agreed to be the district attorney of West Virginia, making the lawsuit suspect at best.
In response, West Virginia is seeking an order to allow them to bar Monsanto from selling products in the state until they comply with their order.
So while Attorney General Darrell McGraw alleges he's attempting to check out the assertions of Monsanto over their soybeans, he won't allow a protective order to be included in the case. That makes no sense, and questions his integrity over the protection of intellectual property.
What reason in the world wouldn't a protective order be included unless there's an agenda of some sort. It makes little sense.
The supposed reason of the inquiry is to find out if the extra cost of seed is backed by higher yields.
Monsanto said it Roundup Ready 2 Yield soybeans yield about 38 bushels an acre more than its original soybean.
The truth is for some reason the usual practice of including a protective order related to the confidential intellectual property information isn't being agreed to be the district attorney of West Virginia, making the lawsuit suspect at best.
In response, West Virginia is seeking an order to allow them to bar Monsanto from selling products in the state until they comply with their order.
So while Attorney General Darrell McGraw alleges he's attempting to check out the assertions of Monsanto over their soybeans, he won't allow a protective order to be included in the case. That makes no sense, and questions his integrity over the protection of intellectual property.
What reason in the world wouldn't a protective order be included unless there's an agenda of some sort. It makes little sense.
The supposed reason of the inquiry is to find out if the extra cost of seed is backed by higher yields.
Monsanto said it Roundup Ready 2 Yield soybeans yield about 38 bushels an acre more than its original soybean.
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.
Tuesday, October 19, 2010
Will Monsanto (NYSE:MON) Be Best Stock of 2011 after Worst of 2010?
Monsanto (NYSE:MON) has been beat up so much this year that the question of whether or not it may be the worst stock of 2010 has been proffered by some commentators and analysts.
While there has been some market factors involved with the poor performance of the stock, such as disappointing results from it SmartStax corn, its sugar beets being put on hold be a judge until more thorough research has been performed, prices too high in a recessionary environment, and the appearance of, and in some cases, actions, showing there is an arrogance there that the company needs to rein in. One being suing farmers who had seed from neighboring farms of Monsanto coming on their land and Monsanto saying they should have to pay for them.
There has also been some inroads into the market share of some Monsanto seeds by competitor DuPont (NYSE:DD), and of course the loss of patents and market share to products now being offered at commodity prices.
Even with all that stuff that sound ominous, there are numerous other products which make Monsanto still the giant in the field, with little in the way of competition which will knock them out of that spot in the short- or mid-term. It is there's to hold onto if they want to remain the market leader.
What that leads to is their performance this year. While some have openly wondered why Monsanto is performing as they are, they are largely technical analysts who don't understand the public relations side, or simply ignore it.
In today's digital media world, those who don't approve of genetically modified seed and other Monsanto products, can make a lot of noise beyond their numbers to give the appearance of a groundswell of opposition, when in reality it's more noise than a real grass roots uprising.
That's not to say opposition isn't real and effective, just that it's not as big as it seems, and it doesn't stop Monsanto from opening up new markets.
With a company like Monsanto an investor must look past the news that will always be there and look at their pipeline and competitive advantage.
In other words, don't read media stories and assume because there is controversy that the company is doing poorly. Look at their actual performance and whether they're valued closed to what they should be.
For 2010 Monsanto is down over 33 percent, which isn't a reflection of their actual or future performance. While the SmartStax corn seed is important and a part of the reason for such negative share performance. It is because it was considered the major engine of growth in the short-term of the company.
It's not that it isn't a good product, but it hasn't measured up to expectations, and the company has rightly paid the price for it. But it seems there may have been far too much focus on that, by both the company and investors, so the company took a big hit when results showed it wasn't up to par.
But in a relatively short time the price of corn has skyrocketed because of corn yields being lower than expected, so the reasons farmers were disgruntled and pulling back before, which related to whether or not paying the higher price was worth the yield, are pretty much gone with the higher corn prices, and Monsanto could generate higher sales for the spring planting because of that.
New markets are also opening up via approval of Monsanto products, especially in Latin America markets; specifically Brazil and Argentina. Once they gain approval to sell products overseas, Brazil will plant large amounts of Monsanto seed to meet the demand.
The bottom line is Monsanto is so out of favor that it's due for a rebound, and although there are obvious challenges, the underlying fundamentals are still in place. And when they do take off, they could soar.
While there has been some market factors involved with the poor performance of the stock, such as disappointing results from it SmartStax corn, its sugar beets being put on hold be a judge until more thorough research has been performed, prices too high in a recessionary environment, and the appearance of, and in some cases, actions, showing there is an arrogance there that the company needs to rein in. One being suing farmers who had seed from neighboring farms of Monsanto coming on their land and Monsanto saying they should have to pay for them.
There has also been some inroads into the market share of some Monsanto seeds by competitor DuPont (NYSE:DD), and of course the loss of patents and market share to products now being offered at commodity prices.
Even with all that stuff that sound ominous, there are numerous other products which make Monsanto still the giant in the field, with little in the way of competition which will knock them out of that spot in the short- or mid-term. It is there's to hold onto if they want to remain the market leader.
What that leads to is their performance this year. While some have openly wondered why Monsanto is performing as they are, they are largely technical analysts who don't understand the public relations side, or simply ignore it.
In today's digital media world, those who don't approve of genetically modified seed and other Monsanto products, can make a lot of noise beyond their numbers to give the appearance of a groundswell of opposition, when in reality it's more noise than a real grass roots uprising.
That's not to say opposition isn't real and effective, just that it's not as big as it seems, and it doesn't stop Monsanto from opening up new markets.
With a company like Monsanto an investor must look past the news that will always be there and look at their pipeline and competitive advantage.
In other words, don't read media stories and assume because there is controversy that the company is doing poorly. Look at their actual performance and whether they're valued closed to what they should be.
For 2010 Monsanto is down over 33 percent, which isn't a reflection of their actual or future performance. While the SmartStax corn seed is important and a part of the reason for such negative share performance. It is because it was considered the major engine of growth in the short-term of the company.
It's not that it isn't a good product, but it hasn't measured up to expectations, and the company has rightly paid the price for it. But it seems there may have been far too much focus on that, by both the company and investors, so the company took a big hit when results showed it wasn't up to par.
But in a relatively short time the price of corn has skyrocketed because of corn yields being lower than expected, so the reasons farmers were disgruntled and pulling back before, which related to whether or not paying the higher price was worth the yield, are pretty much gone with the higher corn prices, and Monsanto could generate higher sales for the spring planting because of that.
New markets are also opening up via approval of Monsanto products, especially in Latin America markets; specifically Brazil and Argentina. Once they gain approval to sell products overseas, Brazil will plant large amounts of Monsanto seed to meet the demand.
The bottom line is Monsanto is so out of favor that it's due for a rebound, and although there are obvious challenges, the underlying fundamentals are still in place. And when they do take off, they could soar.
Monsanto (NYSE:MON) Gets Latin American Approval for Corn, Soybeans
Latin America is starting to become a significant growth region for Monsanto (NYSE:MON), as two more approvals for products has been awarded to them: one in Brazil and the other in Argentina.
In Brazil, they approved of Bt Roundup Ready 2 Yield (BtRR2Y) soybeans, and in Argentina approval was given for Genuity VT Triple PRO corn.
What's left in Argentina before commercializing the seed is to complete its hybrid registration, which should happen before the end of October.
Brett Begemann, Monsanto's executive vice president – seeds & traits, said this, "These approvals are great news for our farmer customers in Brazil and Argentina. It's a promising recognition of technology's contribution to agriculture in helping to meet the world's growing grain demands more sustainably."
Everything in Brazil is ready for the introduction of the corn seed. What's left to be done is to secure approval to import the product from Brazil to other countries.
Once that is secured, corn planting and production will begin.
In Brazil, they approved of Bt Roundup Ready 2 Yield (BtRR2Y) soybeans, and in Argentina approval was given for Genuity VT Triple PRO corn.
What's left in Argentina before commercializing the seed is to complete its hybrid registration, which should happen before the end of October.
Brett Begemann, Monsanto's executive vice president – seeds & traits, said this, "These approvals are great news for our farmer customers in Brazil and Argentina. It's a promising recognition of technology's contribution to agriculture in helping to meet the world's growing grain demands more sustainably."
Everything in Brazil is ready for the introduction of the corn seed. What's left to be done is to secure approval to import the product from Brazil to other countries.
Once that is secured, corn planting and production will begin.
Wednesday, October 6, 2010
Monsanto (NYSE:MON) Losses Deeper Than Expected
Right after Monsanto Company (NYSE:MON) reported losses has shrunk from the fourth quarter last year, narrowing from $233 million, or 43 cents a share, to $143 million, or 26 cents a share in the fourth quarter this year, the share price skyrocketed, but it quickly came down to earth on the realization the losses were still deeper than expectations.
Operating losses came to 9 cents a share from an operating profit of 2 cents a share. Revenue increased from $1.9 billion to $2 billion.
Dissatisfaction from farmers over some crop yields in the midst of high seed prices had the company struggling during the quarter.
Guidance wasn't encouraging for the seed giant either, as the company said next year the results could continue to be weak, as they revise prices and work with their product line.
SmartStax seed corn is the main culprit in the results, as the expected yields are below estimates, and the high price of the seed has opened the door for major competitor DuPont (NYSE:DD), which has managed to take share away from the company with some crops.
Monsanto Chairman Hugh Grant said, "We've focused on giving farmers the most profitable product options. We're trying hard to back that with our actions from our new products and new price points."
Margins were the key to the poor performance, as sales increased to $1.95 billion in the quarter, as low margins and a $132 million restructuring charge cut gains.
Along with losing market share with soybeans and corn share remaining level, the herbicide business of the company remains under pressure as low-cost alternatives are offered on the market after the patents of the company ran out on them.
Analysts had been looking for a loss of 6 cents a share for the fourth quarter.
Guidance for earnings in 2011 came in at a range from $2.72 to $2.82, down from the $2.83 analysts are estimating.
The shares of Monsanto popped on the guidance for 2011 because it wasn't downwardly revised, and the increase in sales, but has pulled back as the market digested the numbers.
Operating losses came to 9 cents a share from an operating profit of 2 cents a share. Revenue increased from $1.9 billion to $2 billion.
Dissatisfaction from farmers over some crop yields in the midst of high seed prices had the company struggling during the quarter.
Guidance wasn't encouraging for the seed giant either, as the company said next year the results could continue to be weak, as they revise prices and work with their product line.
SmartStax seed corn is the main culprit in the results, as the expected yields are below estimates, and the high price of the seed has opened the door for major competitor DuPont (NYSE:DD), which has managed to take share away from the company with some crops.
Monsanto Chairman Hugh Grant said, "We've focused on giving farmers the most profitable product options. We're trying hard to back that with our actions from our new products and new price points."
Margins were the key to the poor performance, as sales increased to $1.95 billion in the quarter, as low margins and a $132 million restructuring charge cut gains.
Along with losing market share with soybeans and corn share remaining level, the herbicide business of the company remains under pressure as low-cost alternatives are offered on the market after the patents of the company ran out on them.
Analysts had been looking for a loss of 6 cents a share for the fourth quarter.
Guidance for earnings in 2011 came in at a range from $2.72 to $2.82, down from the $2.83 analysts are estimating.
The shares of Monsanto popped on the guidance for 2011 because it wasn't downwardly revised, and the increase in sales, but has pulled back as the market digested the numbers.
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, October 4, 2010
Monsanto (NYSE:MON) Should Add Debt for Share Repurchase Says Morgan Stanley (NYSE:MS)
Morgan Stanley (NYSE:MS) has said Monsanto (NYSE:MON) shouldn't be afraid of adding debt to their balance sheet in order to buy back shares in the company.
"We believe that the company could take on up to - $6.5 bn of debt (-2x net debt to EBITDA), buy back 20-25 percent of shares outstanding, and still have a BBB investment grade credit rating. We estimate this scenario would be 14 percent accretive in the first full year. Importantly, given both the favorable lending rate environment (we estimate debt could be taken on at no more than 4.5 percent) and the company's current 2.3 percent dividend yield, the after-tax cost would be just 0.9 percent," said Morgan Stanley analysts Megan Davis and Vincent Andrews.
Monsanto Chief Executive Officer Hugh Grant had been counting on SmartStax corn seed to make up for the loss of revenue and earnings associated with Roundup herbicide, where generic brands have expectedly pummeled the margins of Monsanto after the patents ran out.
That hasn't happened so far, as disappointing early results are coming in lower than projected, although that could improve as results come in from more northerly states.
Monsanto has projected earnings from SmartStax increasing profits as high as 17 percent. The upcoming earnings report is eagerly being looked to to see if improvements have come from latest field reports.
Morgan Stanley has a price target of $70 on Monsanto, which was trading at $47.66, down $0.60, or 1.34 percent, as 12:52 PM EDT.
"We believe that the company could take on up to - $6.5 bn of debt (-2x net debt to EBITDA), buy back 20-25 percent of shares outstanding, and still have a BBB investment grade credit rating. We estimate this scenario would be 14 percent accretive in the first full year. Importantly, given both the favorable lending rate environment (we estimate debt could be taken on at no more than 4.5 percent) and the company's current 2.3 percent dividend yield, the after-tax cost would be just 0.9 percent," said Morgan Stanley analysts Megan Davis and Vincent Andrews.
Monsanto Chief Executive Officer Hugh Grant had been counting on SmartStax corn seed to make up for the loss of revenue and earnings associated with Roundup herbicide, where generic brands have expectedly pummeled the margins of Monsanto after the patents ran out.
That hasn't happened so far, as disappointing early results are coming in lower than projected, although that could improve as results come in from more northerly states.
Monsanto has projected earnings from SmartStax increasing profits as high as 17 percent. The upcoming earnings report is eagerly being looked to to see if improvements have come from latest field reports.
Morgan Stanley has a price target of $70 on Monsanto, which was trading at $47.66, down $0.60, or 1.34 percent, as 12:52 PM EDT.
Friday, October 1, 2010
Monsanto (NYSE:MON) Meets Roundup Ready 2 Soy Yield Projections
Monsanto (NYSE:MON) has finally received some good news about its seed pipeline, as its yield projections for its Roundup Ready 2 Yield soybeans have been met, according to research firm OTR Global.
Last year OTR reported yields weren't as strong as expected.
Based on feedback from close to 30 farm managers and distributors of seeds, the Roundup Ready 2 soybean seeds are now yielding at their promised rates of 7 percent to 11 percent over their prior soybean seed.
Monsanto had hitched their growth projections to SmartStax corn seed, which so far has underperformed the former seeds from a range of 3 percent to five percent.
So they've been scrambling to get some positive news out as their share price continues to take big hits. Last year on October 1 the share price of Monsanto stood at $75.11. Today it was trading at $48.12 at 2:21 PM EDT.
Last year OTR reported yields weren't as strong as expected.
Based on feedback from close to 30 farm managers and distributors of seeds, the Roundup Ready 2 soybean seeds are now yielding at their promised rates of 7 percent to 11 percent over their prior soybean seed.
Monsanto had hitched their growth projections to SmartStax corn seed, which so far has underperformed the former seeds from a range of 3 percent to five percent.
So they've been scrambling to get some positive news out as their share price continues to take big hits. Last year on October 1 the share price of Monsanto stood at $75.11. Today it was trading at $48.12 at 2:21 PM EDT.
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.
Monday, September 20, 2010
Monsanto (NYSE:MON) Spending $10 Billion to Shore Up Idaho Mine
Monsanto (NYSE:MON) has committed to spending another $10 million on its proposed phosphate mine in Idaho in order to increase the safety measures at the project.
The Bureau of Land Management has already approved the safety measures, but the U.S. Environmental Protection Agency said earlier in the year that the $25 million liner proposed to prevent the possibility of selenium reaching the nearby Blackfoot River wasn't satisfactory, saying it could possibly fail.
While the additional $10 million will be included in the final mining plan submitted by Monsanto, the Bureau of Land Management said they'll review the comments to see if the original plan actually needs to be changed.
After the final plan is submitted, a 30-day period to comment will be put in place.
The mine would be used to produce ingredients for Roundup weedkiller.
The Bureau of Land Management has already approved the safety measures, but the U.S. Environmental Protection Agency said earlier in the year that the $25 million liner proposed to prevent the possibility of selenium reaching the nearby Blackfoot River wasn't satisfactory, saying it could possibly fail.
While the additional $10 million will be included in the final mining plan submitted by Monsanto, the Bureau of Land Management said they'll review the comments to see if the original plan actually needs to be changed.
After the final plan is submitted, a 30-day period to comment will be put in place.
The mine would be used to produce ingredients for Roundup weedkiller.
Thursday, September 16, 2010
Monsanto (NYSE:MON) Says Corn Data Shows Higher Yield than Competitors
Monsanto (NYSE:MON) claims early harvest data from corn seed products reveal their products are outproducing their competitors' products.
While data is incomplete at this time, one of note that does seem to be doing well is its Genuity VT Triple PRO Corn, which is used to control earworms.
That product has produced and average yield of 8.5 more bushels of corn an acre than their competitors in 1,400 comparisons.
At a Credit Suisse (NYSE:CS) chemical and agriculture conference, Brett Begemann, Monsanto's executive vice president of seeds and traits said,"Eight and a half bushels is pretty significant... a really positive outcome."
Monsanto made the announcement a day after chief rival DuPont (NYSE:DD) said they are gaining in market share in the soybean and corn seed markets.
DuPont has been branding itself as a lower cost competitor with less traits in a seed, but which does the job needed. They present the question to farmers of whether they really need the extra traits included with Monsanto seeds.
If there aren't higher yields at similar costs, the answer is of course no, and some farmers, especially with its Roundup Ready soybeans, aren't convinced they're getting better results, even with the higher cost seeds.
Monsanto has responded by lowering costs, while interestingly, DuPont has recently upped the cost of its seeds, although they're still lower in price than Monsanto's
Yields reportedly need to be at least a bushel or more an acre to justify the higher price.
While data is incomplete at this time, one of note that does seem to be doing well is its Genuity VT Triple PRO Corn, which is used to control earworms.
That product has produced and average yield of 8.5 more bushels of corn an acre than their competitors in 1,400 comparisons.
At a Credit Suisse (NYSE:CS) chemical and agriculture conference, Brett Begemann, Monsanto's executive vice president of seeds and traits said,"Eight and a half bushels is pretty significant... a really positive outcome."
Monsanto made the announcement a day after chief rival DuPont (NYSE:DD) said they are gaining in market share in the soybean and corn seed markets.
DuPont has been branding itself as a lower cost competitor with less traits in a seed, but which does the job needed. They present the question to farmers of whether they really need the extra traits included with Monsanto seeds.
If there aren't higher yields at similar costs, the answer is of course no, and some farmers, especially with its Roundup Ready soybeans, aren't convinced they're getting better results, even with the higher cost seeds.
Monsanto has responded by lowering costs, while interestingly, DuPont has recently upped the cost of its seeds, although they're still lower in price than Monsanto's
Yields reportedly need to be at least a bushel or more an acre to justify the higher price.
Tuesday, September 7, 2010
Monsanto (NYSE:MON) Under Investigation for Marketing Practices
The Attorney General of Arkansas, Dustin McDaniel, has launched an inquiry into how Monsanto (NYSE:MON) has marketed its Roundup Ready 2 Yield soybean trait.
McDaniel is asking for Monsanto to back up its claims the higher number of trait indeed product higher yields than lower cost competitor seeds, which have less traits.
This sounds like a DuPont (NYSE:DD)-inspired investigation, as their Pioneer seeds are the major low-cost competitor against Monsanto, and have been competing on price versus the number of traits offered by Monsanto as their strategy for gaining market share.
Monsanto recently cited the higher yields as a reason for their announcement they're going to raise prices on the soybean seed, which evidently instigated the inquiry.
But I'm not sure why Monsanto would have an investigation against them, as they can put whatever price they want on the seeds, and farmers can decide if they want to buy them or not.
The other odd thing, is Monsanto claims there were no farmers in Arkansas who planted the soybean seeds in 2009, which if true, makes it strange that the attorney general for Arkansas would have any legal interest in the company at all.
McDaniel is asking for Monsanto to back up its claims the higher number of trait indeed product higher yields than lower cost competitor seeds, which have less traits.
This sounds like a DuPont (NYSE:DD)-inspired investigation, as their Pioneer seeds are the major low-cost competitor against Monsanto, and have been competing on price versus the number of traits offered by Monsanto as their strategy for gaining market share.
Monsanto recently cited the higher yields as a reason for their announcement they're going to raise prices on the soybean seed, which evidently instigated the inquiry.
But I'm not sure why Monsanto would have an investigation against them, as they can put whatever price they want on the seeds, and farmers can decide if they want to buy them or not.
The other odd thing, is Monsanto claims there were no farmers in Arkansas who planted the soybean seeds in 2009, which if true, makes it strange that the attorney general for Arkansas would have any legal interest in the company at all.
Thursday, September 2, 2010
Morgan Joseph Maintains "Buy" on Monsanto (NYSE:MON)
Morgan Joseph reiterated its "Buy" rating on Monsanto (NYSE: MON), while having a price target of $60 on the seed company.
"We believe any weakness in Monsanto's share price, as we witnessed this week, is a great opportunity to buy this unusual stock, as, in our thinking, not only has management overcome a lot of bad news, but it has also developed a dramatic line of growth into the future," said a Morgan analyst.
Revenue doesn't seem to be the problem, but margins and earnings, as pressures on Roundup from patents ending, along with being forced to lower new seed product prices in response to outcry's from farmers, and Dupont (NYSE:DD) marketing their seeds as low-cost alternatives.
Another factor is the cost of research in development, which is the key to future success for Monsanto, but which also cuts into margins and earnings as well.
DuPont is putting the question in the minds of farmers whether or not that added traits of Monsanto seeds are worth the additional costs.
"We believe any weakness in Monsanto's share price, as we witnessed this week, is a great opportunity to buy this unusual stock, as, in our thinking, not only has management overcome a lot of bad news, but it has also developed a dramatic line of growth into the future," said a Morgan analyst.
Revenue doesn't seem to be the problem, but margins and earnings, as pressures on Roundup from patents ending, along with being forced to lower new seed product prices in response to outcry's from farmers, and Dupont (NYSE:DD) marketing their seeds as low-cost alternatives.
Another factor is the cost of research in development, which is the key to future success for Monsanto, but which also cuts into margins and earnings as well.
DuPont is putting the question in the minds of farmers whether or not that added traits of Monsanto seeds are worth the additional costs.
Morningstar (Nasdaq:MORN) Begins Monsanto (NYSE:MON) Coverage
Morningstar (Nasdaq:MORN) has initiated credit coverage on Monsanto (NYSE:MON), issuing a rating of A+ to begin with.
From a credit perspective, Morningstar said they like what they see with Monsanto. Their credit-relevant ratios are strong, and even with the downward revisement in earnings, they still have "excellent profitability."
Some challenges Morningstar sees are antitrust issues, ongoing high research costs, and not a high amount of diversification.
Their Roundup herbicide business will continue to be under pressure, as China imports have undermined earnings because of patents running out, although that was expected.
On their newer products, an unexpected challenge from DuPont (NYSE:DD) has put added pressure on them, as the weak ecomony allows them to put the idea in minds of farmers on whether or not they need the pricey traits of Monsanto seeds.
DuPont offers some seeds at far less price, and with fewer traits in them. A significant number of farmers have responded and went that route, putting pressure on earnings there as well, with Monsanto responding by slashing prices in order to get farmers to at least try their newest offerings.
Moringstar says they still like the strong moat Monsanto has built, but it does have some weaknesses now, and DuPont is positioned to take advantage of that if they falter in any way.
This is why as far as credit issues go, research and development costs are so important, as Monsanto must get results there to be able to be profitable for the long term. That's no guarantee, and until the economy changes, pricing will be a major issue for the seed giant.
From a credit perspective, Morningstar said they like what they see with Monsanto. Their credit-relevant ratios are strong, and even with the downward revisement in earnings, they still have "excellent profitability."
Some challenges Morningstar sees are antitrust issues, ongoing high research costs, and not a high amount of diversification.
Their Roundup herbicide business will continue to be under pressure, as China imports have undermined earnings because of patents running out, although that was expected.
On their newer products, an unexpected challenge from DuPont (NYSE:DD) has put added pressure on them, as the weak ecomony allows them to put the idea in minds of farmers on whether or not they need the pricey traits of Monsanto seeds.
DuPont offers some seeds at far less price, and with fewer traits in them. A significant number of farmers have responded and went that route, putting pressure on earnings there as well, with Monsanto responding by slashing prices in order to get farmers to at least try their newest offerings.
Moringstar says they still like the strong moat Monsanto has built, but it does have some weaknesses now, and DuPont is positioned to take advantage of that if they falter in any way.
This is why as far as credit issues go, research and development costs are so important, as Monsanto must get results there to be able to be profitable for the long term. That's no guarantee, and until the economy changes, pricing will be a major issue for the seed giant.
Wednesday, September 1, 2010
How Will Monsanto (NYSE:MON) Fight Off Competitors?
Monsanto (NYSE:MON) has been on the defensive ever since Roundup came off patent, and it isn't only from cheaper products competing against them, as that was expected.
The major problem is their inability to get premium prices on their new products, which DuPont (NYSE:DD) has especially taken aim at, putting the question to farmers and doubts in their minds if they really need all the extra traits offered by Monsanto.
DuPont is offering competitive products with far less traits, but also at a better price.
It's similar to how many bells and whistles a tech product can add to justify a higher price. Eventually that argument is no longer convincing, and consumers or businesses buy on price rather than an endless array of added bells and whistles, which most probably don't use.
At least that seems to be the strategy of DuPont in their battle with Monsanto.
For Monsanto, they need to convince farmers the added traits of their new seeds are worth the added cost, even though they've had to cut their prices far below what they originally charged for them.
With some patience this will change, as when crop prices rise, historically farmers haven't minded paying the extra cost, but in tighter market it becomes more of a commodity business, and in that regard Monsanto can't compete, and will continue to struggle until prices rise again.
It seems Monsanto has to regroup and promote the strength of their product against competitors, especially after lowering prices. That means focusing on the added value of their seeds against their competitors, where they definitely have an edge.
The major problem is their inability to get premium prices on their new products, which DuPont (NYSE:DD) has especially taken aim at, putting the question to farmers and doubts in their minds if they really need all the extra traits offered by Monsanto.
DuPont is offering competitive products with far less traits, but also at a better price.
It's similar to how many bells and whistles a tech product can add to justify a higher price. Eventually that argument is no longer convincing, and consumers or businesses buy on price rather than an endless array of added bells and whistles, which most probably don't use.
At least that seems to be the strategy of DuPont in their battle with Monsanto.
For Monsanto, they need to convince farmers the added traits of their new seeds are worth the added cost, even though they've had to cut their prices far below what they originally charged for them.
With some patience this will change, as when crop prices rise, historically farmers haven't minded paying the extra cost, but in tighter market it becomes more of a commodity business, and in that regard Monsanto can't compete, and will continue to struggle until prices rise again.
It seems Monsanto has to regroup and promote the strength of their product against competitors, especially after lowering prices. That means focusing on the added value of their seeds against their competitors, where they definitely have an edge.
Monday, August 16, 2010
Citigroup (NYSE:C) Maintains "Buy" on Monsanto (NYSE:MON)
Analysts from Citigroup Inc (NYSE:C) wrote in a note to clients Friday that they're maintaining their "Buy" rating on the seed giant Monsanto (NYSE:MON) with a price target of $62.00.
News on Monsanto has been mixed lately, as they've made decisions to lower some of their seed prices in 2011 by as much as 75 percent to drive sales, which have been down because farmers have battled them on the high costs.
Negative news was the recent decision by a federal judge to ban the planting of new Roundup ready sugar beet seeds, which could have a dramatic impact on the company.
Over 50 percent of all sugar grown in the U.S. comes from sugar beets, and 95 percent of that comes from the Roundup ready sugar beet seeds of Monsanto, which could have a major affect on sugar prices if the ruling is held up ... assuming an appeal.
News on Monsanto has been mixed lately, as they've made decisions to lower some of their seed prices in 2011 by as much as 75 percent to drive sales, which have been down because farmers have battled them on the high costs.
Negative news was the recent decision by a federal judge to ban the planting of new Roundup ready sugar beet seeds, which could have a dramatic impact on the company.
Over 50 percent of all sugar grown in the U.S. comes from sugar beets, and 95 percent of that comes from the Roundup ready sugar beet seeds of Monsanto, which could have a major affect on sugar prices if the ruling is held up ... assuming an appeal.
Friday, July 9, 2010
Monsanto (NYSE:MON) Up on Higher Corn Prices
Monsanto (NYSE:MON) seems to be finally participating in the surge of corn prices over the last week, as the company has led the S&P 500 today, being up over 6 percent so far.
Along with their Roundup issues, Monsanto has met resistance from farmers over the prices of some of their products, and that has also resulted in lower sales.
That's where the higher price of corn comes in, as it could result in shrinking resistance from farmers as their economic situation changes.
Monsanto has been hammered down by over 40 percent over the last half year, and could be considered a buy, especially if you believe all the negative is already priced into the stock.
Along with their Roundup issues, Monsanto has met resistance from farmers over the prices of some of their products, and that has also resulted in lower sales.
That's where the higher price of corn comes in, as it could result in shrinking resistance from farmers as their economic situation changes.
Monsanto has been hammered down by over 40 percent over the last half year, and could be considered a buy, especially if you believe all the negative is already priced into the stock.
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