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Jul 1, 2010

Facing Competition from Generic RoundUp, Monsanto's Profits Decline 45%

On 1 July 2010 the Wall Street Journal reported that Monsanto's profits dropped 45% due to competition from generic weedkillers and farmer reaction to the high price of newly introduced gene-modified (GM) soybean and corn seeds.  Monsanto executives had forecast these results one month ago in a conference call to Wall Street analysts.

Restructuring RoundUp business has forced Monsanto to step away from long-term projected targets of doubling gross profit between 2007 and 2012.  Instead it now projects growth rates in the midteens starting in 2011. 

Due to competition from generic glysophate from China, Monsanto has cut its prices for RoundUp.  Prior to the change, RoundUp sales had dropped 56% in the third quarter. 

Profits were also hurt as the company lowered the price on two recently introduced GM seed lines.  This includes a second generation of its Roundup-tolerant soybean (Roundup Ready 2 Yield) and its herbicide-tolerant and pest-resistant SmartStax corn.  Monsanto expects sales of these seeds to increase by 2011.

For more see related blog: Monsanto Restructures RoundUp Prices Due to Competition, 28 May 2010.

For the original article see: Kilman, Scott. "Monsanto's Profit Drops 45% on Roundup Woes," Wall Street Journal, 1 July 2010.

About Margaret

CEO and Curator (The Food Museum) | Managing Director and Chief Editor (GR2 Global LLC) | Educator (UCLA PhD) | Researching and writing on global food issues, nutrition and health, sustainability, history (preservation), conservation (natural resources), and design.
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