News & Media :: Daily Log
In the News
Aug 12, 2010
In an August 12, 2010 event for analysts and investors, Monsanto announced that it will cut the SmartStax corn price premium 67% and the Roundup Ready 2 soybean seed price premium by 75% for the 2011 marketing year, Bloomberg news has reported.
These two new "flagship" GE crop seed products were announced two years ago to great fanfare and were projected to help Monsanto double its profits by 2012. When first announced, Monsanto claimed that the products would deliver higher yields and income for farmers, sufficient to justify the sizable increases in prices charged for these varieites in the 2010 season.
According to the Center's December 2009 report on the price premiums charged for GE and organic seeds, SmartStax GE corn was projected to cost $320 per bag, or about $124 per acre seeded, twice the cost per acre on farms planting conventional seed.
The cost of SmartStax corn seed in 2010 was over three-times the cost of conventional corn seed 10 years ago -- a rate of price inflation unheard of in the history of the U.S. seed business.
Roundup Ready 2 corn seed was projected to sell for an average of $70.43 per bag in 2010, reflecting a 42% increase over the price of Roundup Ready seed in 2009.
There are two logical explanations why Monsanto would announce this early such a major drop in next year's seed prices.
First, some farmers voted with their dollars and switched to other brands offered for sale at lower prices.
Second, SmartStax corn and RR 2 soybean production data and yield forecasts for the 2010 crop season are no doubt coming in now, and may be lowering confidence in Monsanto that the promised yield increases will be harvested. If this is the case, it is likely additional reductions in seed prices for these varieites will be forthcoming, assuming of course that Monsanto wants to retain its current market share.
