Monsanto is back in wheat
The joke is that Monsanto's own wheat specialists have admitted that the future of wheat is not in GM.
After 5-year absence, Monsanto is back in wheat
By Jeffrey Tomich
ST. LOUIS POST-DISPATCH, 15 July 2009
Five years after shelving plans for biotech wheat, Monsanto is re-entering the wheat business with the purchase of a Montana seed company.
Creve Coeur-based Monsanto, the biggest seller of genetically modified seed, agreed to pay $45 million for WestBred LLC and could introduce new wheat varieties within a few years. WestBred specializes in wheat germplasm, the seed's genetic material.
The size of the deal isn't significant for a company such as Monsanto, whose annual sales exceed $10 billion. But the company's return to a market it abruptly exited in 2004 is noteworthy, especially at a time when demand for wheat to make breads and pasta is growing.
"Wheat is an important crop and has suffered from a lack of technology investment," said Carl Casale, Monsanto's executive vice president of global strategy of and operations. "Over the last several years, its productivity has fallen behind other row crops like corn and soybeans."
The announcement also comes as Monsanto is looking to its seed business as sales of Roundup herbicide are declining at a faster-than-expected pace because of increased global competition.
Monsanto abandoned the wheat business after years of research and development that led to plans to introduce a spring wheat that is resistant to herbicides. The company had begun obtaining regulatory approval when it called off the venture, citing a declining market for the variety it was developing.
Critics contend the decision was less about economics than stiff opposition. The Canadian Wheat Board in March 2004 said the 10 largest customers for Canadian Western Red Spring wheat, including the U.K., Japan and Mexico, had rejected the possibility of genetically modified wheat.
Zelig Golden, a staff attorney for the Center for Food Safety, a group opposed to genetically modified foods, predicts Monsanto will run into more resistance if it seeks approval for biotech wheat.
"American consumers and American farmers don't want wheat to be genetically modified," Golden said. "And foreign markets will reject it."
Monsanto's development efforts will initially focus on breeding techniques to enhance yield, Casale said. Longer term, those seeds will serve as a platform for biotech traits, especially those that help wheat grow with less water and fertilizer.
The company said it might take a decade for biotech wheat seeds to reach the market. And although there are no plans to re-introduce the original Roundup Ready variety that was scuttled five years ago, Monsanto will consider the possibility of combining, or stacking, biotech traits for herbicide and insect resistance.
Monsanto also has established an advisory group of representatives from the wheat industry who will provide feedback on proposed traits and attributes. "The industry recognizes that there has to be alignment from the producer all the way to the customer," Casale said in an interview.
Monsanto's return to wheat follows a similar move by Dow AgroSciences, which last month announced plans to develop genetically modified wheat in collaboration with World Wide Wheat LLC.
The National Association of Wheat Growers hopes Monsanto's return to wheat means an infusion of research dollars into a business that remains mostly the domain of public land-grant universities. "We're excited to see Monsanto stepping up," said Joe Kejr, who chairs a joint biotech committee of the National Association of Wheat Growers and U.S. Wheat Associates, a group trying to develop export markets. "We have got to have that investment for the industry to be sustainable."