ST. LOUIS, Missouri, US — The Wall Street Journal reports that Monsanto Co. will lower prices on some genetically modified (GM) seeds following a disappointing second quarter. Monsanto reported second quarter earnings of $887 million — down 10% from earnings of $1.09 billion during the same quarter last year. US farmers tend to buy spring seed during the second quarter, but fewer farmers this year bought Roundup Ready 2 Yield — Monsanto’s herbicide-tolerant soybean — and SmartStax, the company’s eight-trait stacked pest-resistant corn. The poor showing — only three million acres of SmartStax corn seed sold, compared to Monsanto’s predicted four acres; and six million acres of Roundup Ready 2 Yield instead of the company’s hoped-for eight to 10 million acres — spurred Monsanto to reduce some seed prices. The new soybeans were selling for 42% more — about $74 per acre — than Monsanto’s first-generation soybean product, Roundup Ready, while SmartStax was priced 17% higher than the company’s previous pest-resistant corn varities.
Monsanto CEO Hugh Grant told Wall Street analysts that today’s environment for GM seeds is very competitive and dynamic. He did not go into detail about the company’s new pricing strategy, but his comments suggested that Monsanto will try to gain market share by lowering prices on GM corn, soybeans and cotton seeds.
Because of the drop in seed pricing, as well as unexpected competition from generic glyphosate, Monsanto has abandoned its plan to double gross profit between 2007 and 2012.