Buoyant Latin America Gives Monsanto an Edge
21 November 2011 Monsanto sounded a positive note on its Latin America business at a Morgan Stanley investor conference on Friday, as corn and soybeans in Argentina and Brazil gain momentum.
“It’s an exciting time right now for soybeans in Brazil,” Brett Begemann, the company’s chief commercial officer, said on the call.
Begemann said the company will launch Intacta, its GM soybean that combines Roundup Ready 2 Yield and a Bt trait to kill a leaf-munching caterpillar, in the country this fall. The company is still working to gain international regulatory approvals for Intacta, he said.
In Brazil, farmers can pay a royalty upfront on soybean seeds or delay payment until they deliver the grain – the mix is about half and half, said Begemann.
The soybean business in Argentina is a tougher nut to crack, but with the help of the country’s progressive farmers, it is making inroads there.
“Roundup Ready has been in Argentina for many years, and we’ve never been paid. It’s not a very good position to be in,” he said. But Roundup Ready 2 Yield has a patent in the country, unlike its original product, and Monsanto has worked for years with farmers and farmers associations, who then build relationships with grain handlers and the government to help realize needed changes in seed laws.
“[Farmers in Argentina] are very frustrated that they’re ahead in Brazil with new soybean technology that they’re not getting access to,” Begemann said. “They know innovation is going on without them.”
Eastern Europe is similar to the Brazilian market a few years ago, and he was upbeat on Monsanto’s long-term opportunities in the region particularly for corn and oil seed rape.
China, he said, is further out. But as it is a 70-million-acre corn market – second only to the US – he believes the company will have the opportunity to “participate in a bigger way” over the next five years.
—Jaclyn Sindrich, Managing Editor
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