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[genet-news] BUSINESS & SEEDS: Monsanto has no magic cure for its woes as company flounders



                                  PART 1


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TITLE:   MONSANTO HAS NO MAGIC CURE FOR ITS WOES AS COMPANY FLOUNDERS

SOURCE:  Digital Journal, USA

AUTHOR:  Stephanie Dearing

URL:     http://www.digitaljournal.com/article/299576

DATE:    29.10.2010

SUMMARY: "Monsanto is under the gun on a number of different issues, and the company has no magic elixir or engineered fix to halt the corporation?s plummet from its recent position as Forbe?s Company of the Year. Major cracks have formed in the Monsanto facade this past year. Dropping fortunes appear to be the result of a combination of factors, including ?super weeds,? the high cost of Monsanto seeds and inputs and competition on the herbicide front from China."

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MONSANTO HAS NO MAGIC CURE FOR ITS WOES AS COMPANY FLOUNDERS

Monsanto is under the gun on a number of different issues, and the company has no magic elixir or engineered fix to halt the corporation?s plummet from its recent position as Forbe?s Company of the Year.

Major cracks have formed in the Monsanto facade this past year. Dropping fortunes appear to be the result of a combination of factors, including ?super weeds,? the high cost of Monsanto seeds and inputs and competition on the herbicide front from China. Could Monsanto could be in a dive so precipitous it won?t be able to recover?

Glyphosphate-resistant weeds have proven to be a major Achilles heel for Monsanto. Glyphosphate is the key ingredient in the corporation?s main product, the herbicide it calls Roundup. Obviously a field full of resistant ?super weeds? is not good business for a farmer, and Monsanto recently announced it would issue millions in rebates to farmers who use other herbicides.

Stephen P. Bowles summarized the glyphosphate issue in a research paper on glyphosphate resistance, published in PNAS earlier this year.

?... History shows that threats to food production have major repercussions, including famine, war, and civil unrest. A major threat to food production occurs every single growing season, when wild plant species (weeds) infest crop fields. Humans have battled since the dawn of agriculture to control weeds and to minimize their negative influence on food production. Modern herbicides have largely replaced human labor as the primary tool for weed control, and this has contributed significantly to the productivity of world cropping. However, despite the success of herbicides, weeds remain a primary challenge to food production, in part because selection pressure from herbicides has resulted in the evolution of herbicide resistance in weeds.?

Initially, Monsanto paid lip service to the topic of glyphosphate resistance, but even this summer, the corporation was still downplaying the extent of the problem. CBC News reported Monsanto said ?resistance was often overstated.? At the same time, Monsanto was offering American farmers a $12 per acre rebate for using competitors? herbicides.

Monsanto made the rebate official this month after experimenting with it over the summer. Farmers in the United States growing cotton and soybeans are eligible for rebates of either $3 or $20 per acre -- that is, if the farmers follow Monsanto?s directions for integrated management outlined in Monsanto?s Roundup Ready Weed Management Plus Platform. When announcing the program, Monsanto said

??We have talked with farmers, weed scientists and others in the industry to develop a set of best management recommendations to control glyphosate-resistant weeds where they exist and reduce the risk of developing these weeds on other fields where farmers are growing Roundup Ready crops. The Roundup Ready PLUS platform was designed to improve on-farm productivity, sustain the benefits of conservation tillage and provide effective weed management. We have assembled a set of recommendations, products and incentives packaged together to bring solutions to the farm.?

The Roundup Ready PLUS platform provides weed management recommendations for Roundup Ready crops for each farm situation, by pairing crop protection products from Monsanto and other companies.?

But not all farmers are pleased with the new program. Some farmers, reported AgFax, have panned the deal, saying (in part)

?... Monsanto has helped somewhat in weed resistance management by rebating a small amount ($2.50/ac or so) for each of several herbicides if they are applied. However, it would require that a producer use all five herbicides on the list in order to get a total of $12.50/ac in return.

And there is no consideration for rates. Cotoran and diuron, for instance, must be used at the highest labeled rates for most of our soil types where cotton is grown in our area, yet the same amount of $ is allocated per acre regardless. The $2.50/ac rebate for Cotoran would be less than 20% of the cost of a efficacious rate of that herbicide for many of our acres. We appreciate the thought, but we need more bucks if Monsanto truly wants to help with resistance management in our area.?

Why is Monsanto backing down from its denial of glyphosphate resistance? As Joseph Mendelson noted in 1998, writing for The Ecologist,

?... Monsanto has built much of its corporate empire upon the back of one chemical - glyphosate. Introduced almost 25 years ago, glyphosate, marketed mainly as the herbicide Roundup, is Monsanto?s key agri-chemical product.?

Monsanto lost money on its sales of Roundup in the third quarter of 2010, but optimistically predicts the company will make $550 to $600 million from Roundup sales in 2011. Profits from Roundup sales in the 4th quarter of 2009 were $322 million.

Monsanto developed Roundup in 1974, and has been designing crops to be Roundup ready ever since. The herbicide has been hailed as a breakthrough product for agriculture, and Monsanto claims its products create many benefits for farmers and the environment, as well as human health, although there is at least one study claiming Roundup causes liver cell death.

Monsanto?s financial fortunes are facing increased pressure from issues such as the US Department of Justice?s investigation into Monsanto for allegations that the company has monopolized the seed market with its Roundup ready seeds, said St. Louis Public Radio. In addition, a number of other states are looking into Monsanto?s soy beans, and West Virginia just filed a law suit against Monsanto for not backing up its claims about the superiority of its soybeans. At the same time, those who care were rocked by the revelation that the Gates Foundation holds 500,000 shares in Monsanto.

Last year, Forbes named Monsanto ?Company of the year,? which journalist Robert Langreth said in his Forbes blog was a big mistake.

Zack?s just rated Monsanto as ?... Underperform Recommendation in line with the stock?s current Sell rating, equivalent to a Zacks #4 Rank.? Zack?s is confident Monsanto will climb out of this deepening hole, primarily due to the GE corn, SmartStax. Zack?s issued its rating for Monsanto on October 20, saying

?... We believe this will continue for a substantial period of time based on the slower market recovery. Further, an intensely competitive environment and Monsanto?s huge dependence on a few large customers can lead to risk.

Monsanto also faces foreign currency risk since a significant portion of its income comes from outside the U.S. Thus, we downgraded our recommendation on the stock from Neutral to Underperform...

Addendum: Earlier this month, Monsanto told the New York Times the company was taking steps to deal with the growing discontent farmers have expressed with Monsanto?s products. One of those steps was the rebate program for integrated weed management to fight glyphosphate resistance, and another step is the lowering of the price of SmartStax corn. The corporation is even going so far as to offer seeds that are less genetically engineered, reported the New York Times.



                                  PART 2

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TITLE:   MONSANTO CHIEF INCREASES HOLDINGS

SOURCE:  The Wall Street Journal, USA

AUTHOR:  Kathy Shwiff

URL:     http://online.wsj.com/article/SB10001424052702303341904575576713571803700.html?mod=googlenews_wsj

DATE:    27.10.2010

SUMMARY: "Alex Romayev of Form4Oracle, a site that monitors insider activity, called Mr. Grant's recent purchase and his buying close to $2 million in shares July 13 a "mildly bullish signal" because his total holdings have increased more than 10% in the past year. Mr. Grant now holds 578,316 shares, according to the data provider Washington Service."

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MONSANTO CHIEF INCREASES HOLDINGS

Monsanto Co. Chairman and Chief Executive Hugh Grant bought about $1 million of the seed company's stock last week, adding to previous insider purchases in July.

Alex Romayev of Form4Oracle, a site that monitors insider activity, called Mr. Grant's recent purchase and his buying close to $2 million in shares July 13 a "mildly bullish signal" because his total holdings have increased more than 10% in the past year. Mr. Grant now holds 578,316 shares, according to the data provider Washington Service.

Mr. Grant didn't return a call seeking comment, and a Monsanto spokeswoman said the company doesn't comment on executive or employee stock transactions.

Chief Financial Officer Carl Casale also bought shares in July, boosting his holdings by about 40%, to 104,307 shares.

Mr. Romayev said he looks not only at the dollar amount of insider purchases but also at changes in the insider's holdings to determine the impact of the trades. The change in holdings is even more important at large companies, such as Monsanto, where executives' purchases are made for public relations purposes more often than they are at smaller companies, he said.

Tony Marchese, general partner and chief investment officer of Insiders Trend Fund LP, said Mr. Grant's Oct. 18 purchase is a good sign for investors who want to buy large-cap stocks. But he believes there is less correlation between insider trades and stock moves at multibillion-dollar companies than at smaller ones, because a greater number of factors can affect the stock price.

Laurence Alexander, chemicals analyst at Jefferies & Co., said he doesn't look at insider trades, but he considers Monsanto a market leader whose fundamental business is intact despite some execution issues in the past two years.

Jefferies has a hold rating on the stock and a target price of $56. Mr. Alexander expects the stock price to "tread water" until next spring, when visibility on order patterns for the company's products by farmers could provide a catalyst.

In 4 p.m. New York Stock Exchange composite trading Tuesday, Monsanto's shares rose 27 cents, or 0.5%, to $58.98.

This month, the company reported that its fiscal fourth-quarter loss narrowed on a drop in restructuring charges.

Mr. Grant paid $56.36 a share in his latest purchase, about 8.3% more than he paid in July.

The company's performance has been hurt this year by generic competition for its weedkiller and a farmer backlash against its high-priced, genetically modified seeds. Monsanto faces opposition in Japan and the European Union to its genetically modified seeds; environmental concerns also have been raised in the U.S.



                                  PART 3

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TITLE:   FIELD TRIAL RESULTS IN KEY RELATIVE MATURITIES EXHIBITING YIELD ADVANTAGES OF MONSANTO GENUITY® SMARTSTAX® CORN HYBRIDS

SOURCE:  Monsanto, USA

AUTHOR:  Press Release

URL:     http://monsanto.mediaroom.com/index.php?s=43&item=893

DATE:    25.10.2010

SUMMARY: "With U.S. harvest continuing to progress rapidly, field trial results in key relative maturities demonstrate that corn hybrids with Monsanto Company?s Genuity® SmartStax® trait are outyielding the industry?s leading triple-stack corn trait technology. In field trial comparisons, the Genuity SmartStax corn hybrid portfolio in the 90 to 105 relative maturity days is exhibiting an average yield advantage of approximately four bushels per acre across Iowa, Illinois, Indiana, Michigan and Minnesota in nearly 4,000 comparisons when compared with the YieldGard VT Triple® hybrid portfolio."

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FIELD TRIAL RESULTS IN KEY RELATIVE MATURITIES EXHIBITING YIELD ADVANTAGES OF MONSANTO GENUITY® SMARTSTAX® CORN HYBRIDS

Genuity® Roundup Ready 2 Yield® Soybean Field Trial Data Continue to Exhibit Significant Yield Boost Over Competitive Roundup Ready® Varieties

ST. LOUIS, Oct. 25, 2010 /PRNewswire-FirstCall/ -- With U.S. harvest continuing to progress rapidly, field trial results in key relative maturities demonstrate that corn hybrids with Monsanto Company?s Genuity® SmartStax® trait are outyielding the industry?s leading triple-stack corn trait technology.

In field trial comparisons, the Genuity SmartStax corn hybrid portfolio in the 90 to 105 relative maturity days is exhibiting an average yield advantage of approximately four bushels per acre across Iowa, Illinois, Indiana, Michigan and Minnesota in nearly 4,000 comparisons when compared with the YieldGard VT Triple® hybrid portfolio. This figure excludes the whole-farm yield advantage that Genuity SmartStax may provide through reduced refuge, which can be estimated in a range of 1.5 to 3 bushels per acre, based on previous field trials and experience. The majority of the Genuity SmartStax product offerings and volume of 2010 sales were in these shorter-maturity regions.

?Even in a year where certain insect pressure is relatively low, these results validate that Genuity SmartStax can offer farmers a performance edge, providing even greater confidence under more typical insect pressure,? said Dr. Ted Crosbie, Monsanto?s vice president of global plant breeding. ?Combine that with the industry?s most complete package of insect control and the ability to dramatically reduce the refuge requirement to 5 percent in the Corn Belt, and Genuity SmartStax offers a compelling package.?

Field trials indicate trait efficacy continues to be the industry standard, as evidenced by improved consistency of corn rootworm protection under heavy pressure. Based on thousands of root digs over two years, more than 98 percent of the Genuity SmartStax roots that were rated for corn rootworm injury, scored below the threshold at which yield is adversely impacted, compared to just 70 percent for Herculex® Xtra.

Despite particularly heavy corn earworm pressure in many parts of the Midwest, the Genuity SmartStax trait package is delivering a consistent level of protection. Early data indicate a 78 percent reduction in damaged kernels for Genuity SmartStax versus the refuge hybrid and a 70 percent reduction in damaged kernels compared to Herculex Xtra.

Additionally, with U.S. soybean harvest nearing completion, early harvest results from key soybean growing states of Illinois, Indiana, Iowa, Minnesota, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin indicate that the top-performing 181 Genuity Roundup Ready 2 Yield soybean varieties tested across these states exhibit an average yield advantage of more than three bushels per acre, with a greater than 70 percent win rate, when compared with competitive Roundup Ready soybean varieties. These preliminary data are based on 16,000 head-to-head comparisons in on-farm commercial and breeding trials. The company will use its findings to select and deploy the best products for the 2011 season.

Broad variety testing is an important annual process. Each year, Monsanto tests hundreds of corn hybrids and soybean varieties across thousands of research plots throughout the United States. These tests result in tens of thousands of comparisons with the leading competitive corn and soybean products. Analysis of these data enables Monsanto to identify and narrow the pool of varieties to be sold commercially in a given geography the following year.

This update is part of an ongoing series of Monsanto reports throughout the harvest season, culminating with complete harvest results on November 8, 2010. For additional information, please visit the following website at: www.monsanto.com/productperformance. Farmers can also follow product news and performance online at: www.asgrowanddekalb.com and www.genuity.com.

About Monsanto Company

Monsanto Company is a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality. Monsanto remains focused on enabling both small-holder and large-scale farmers to produce more from their land while conserving more of our world?s natural resources such as water and energy. To learn more about our business and our commitments, please visit: www.monsanto.com.




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