New Monsanto Seeds Could Cost 42% More

Posted by Matt Hopkins|14 August 2009

The world’s largest seed maker, Monsanto Co., plans to increase pricing as much as 42% more for its new genetically modified (GM) seeds next year than older offerings because they increase farmers’ output, reports Bloomberg. New yield-boosting GM seeds are part of a plan to double gross profit from 2007 to 2012.

Roundup Ready 2 Yield soybeans will cost farmers an average of US $74 an acre in 2010; original Roundup Ready soybeans will cost $52 an acre, St. Louis-based Monsanto said. Roundup Ready 2 Yield soybean seeds were planted on 1.5 million acres this year and will be planted on as many as 8 million acres next year in the US with a potential to one day reach 55 million acres, Monsanto said. The new soybeans, which resist Monsanto’s Roundup herbicide, produce 7.4% more soybeans per acre than the older version.

SmartStax corn seeds, developed with Dow Chemical Co., will cost $130 an acre, 17% more than the YieldGard triple-stack seeds they will replace. SmartStax seed will be planted on as many as 4 million acres in 2010, its first year on the market, with a potential for as many as 65 million acres in the US eventually, the company said. The new seed boosts yields 5% to 10% compared with other products, partly by reducing the amount of land that must be planted with conventional corn to 5% from 20%, Monsanto said.Pricing for SmartStax is at the high end of expectations, said Laurence Alexander, a New York-based analyst at Jefferies & Co.

The company is pricing its seeds to share the benefit of increased yields with farmers, said Mark Gulley, a New York-based analyst at Soleil Securities. Prices include seed treatments designed to protect seedlings from pests and disease, Monsanto said. “They are in essence splitting the value of the extra yield 50-50,” Gulley said.