Have we seen Peak Monsanto?
2.Monsanto's New Corn, Soy Seeds May Miss 2010 Forecast, Shares Dive
NOTE: Re item 1, in fact, there was already evidence of farmers beginning to turn their backs on GM soy last year in both the US and the top soya growing state of Brazil.
"We've been hearing about farmers returning to conventional soybean varieties in 2009 to lower input costs and take advantage of overseas demand for non-GMO beans," said Dr David Wright, Director of Research for the North Central Soybean Research Program (NCSRP). Farmers in Brazil's Mato Grosso were also said to be shunning GM soy varieties in favor of conventional seeds due to poor yields.
For first time, GM soybeans may be losing favor among farmers 1
GRIST, 25 Feb 2010
Is it possible that we've reached Peak Monsanto?:
Low commodity soybean prices, attractive premiums, and rising prices for genetically modified soybean seed are leading American farmers to plant more acres of non-GMO soybeans this year.
Representatives with soybean associations, universities, and grain buyers all say that demand for non-GMO soybeans is growing, leading to more non-GMO acres.
Genetically modified Roundup Ready soybeans have taken an increasingly larger percentage of U.S. soybean acreage each year since their introduction in 1996, reaching 92 percent in 2008.
But this could be the first year that the trend reverses. Grover Shannon, a soybean breeder with the University of Missouri, Delta Research Center, thinks non-GMO acreage could account for 10 percent of total soybean acreage this year.
This analysis comes from The Organic and Non-GMO Report so it's fair to be skeptical. But it does quote a rep from a state soybean associations, not generally bastions of sustainable ag proponents:
"We are seeing more interest in growing non-GMO soybeans," says Mark Albertson, director of marketing, Illinois Soybean Association.
... Albertson has talked to several farmers who haven’t grown non-GMO soybeans in eight years, but will this year because of the premiums.
Grain companies large and small are contracting farmers to grow non-GMO. “We called all the companies buying non-GMO, and about one-half of them had enough acres,” Albertson said.
The reasons run the gamut from farmer anger at Monsanto’s price increases for its GM seed and its RoundUp pesticide to the recognition that the rise of resistant weeds have reduced the rationale for going GM in the first place to another kind of increasing resistance””among consumers towards GM foods.
Of course, it's entirely possible that this is a blip and not a trend - we won't even know for certain that total planted acres of GM soybeans have declined until later this year. Still, when you combine this news with the Justice Department's active antitrust investigation into Monsanto, you may legitimately conclude that the tide may be close to turning against the biotechnology giant.
2.Monsanto's New Corn, Soy Seeds May Miss 2010 Forecast
Bloomberg, February 25 2010[shortened]
Monsanto Co., the world's largest seed company, said new genetically modified corn and soybeans it is counting on to drive earnings this decade may be planted on fewer U.S. acres in 2010 than previously forecast. Monsanto shares fell the most since October.
Roundup Ready 2 Yield soybeans may fall 20 percent short of the bottom of the company’s forecast of 8 million to 10 million planted acres, Chief Financial Officer Carl Casale said today. SmartStax corn seed may miss the St. Louis-based company’s 4 million-acre target by a similar percentage, he said.
Chief Executive Officer Hugh Grant is counting on the two new varieties to help boost seed earnings to as much as $7.5 billion in 2012 from $4.5 billion in 2009. The shortfall will reduce earnings less than 5 cents a share this year and won’t hurt long-term goals, Casale said. Farmers are trying the new products in the numbers expected, only on fewer acres, he said.
“They’re buying what they believe is meaningful for a trial, but they’re not doubling down and trying more because we’ve got it available,” Casale said during a presentation at the Morgan Stanley Global Basic Materials Conference in New York that was broadcast on the Internet. “We have more than adequate trajectory on both of those to achieve our 2012 milestones.”
Monsanto fell $2.86, or 3.9 percent, to $71.18 at 4:01 p.m. in New York Stock Exchange composite trading. The decline was the largest since Oct. 26.
“The grower resistance is because of the risk profile,” Mark Gulley, a New York-based analyst at Soleil Securities, said by telephone. “Any new product has a higher risk profile than a proven product. Growers are looking around and saying, ‘You go first.’” He rates the share “hold.”
About half of the company’s 2010 per-share profit of $3.10 to $3.30 will be in the quarter ending this month, down from a forecast that as much as 60 percent of profit would come in the period, Casale said, repeating a statement from yesterday. That implies second-quarter profit of $1.55 to $1.65 a share, trailing the $1.83 average estimate of 13 analysts surveyed by Bloomberg.
The late 2009 U.S. harvest delayed Monsanto's soybean shipments, and corn-trait royalty payments from third parties are later than expected, Casale said.
Monsanto may have a small profit in the fourth quarter, rather than a forecasted loss, because a decision to bypass distributors in Mexico and sell directly to customers may add about $40 million to gross profit, he said. Sales in Latin America may be better in the fourth quarter than forecast, he said.