Monsanto CEO Says 4Q On Track After Crop-Protection Revamp

 
The head of Monsanto Co. (MOS) said Wednesday that the companys performance for its current fiscal fourth quarter remains on track after it announced price cuts for key new seed products and revamped its crop-protection unit.

Fierce competition in the herbicide sector and farmers poor reception of high-priced genetically modified seeds have weighed on the U.S. agribusiness company and forced it to abandon a long-term profit target.

Hugh Grant, chairman and chief executive, will tell investors later Wednesday that "significant drivers of the companys fourth-quarter fiscal-year 2010 operating plan continue to track well with managements expectations," according to statement ahead of an investor event.

The company is cutting prices for two lines of genetically modified seeds to spur broader adoption by U.S. farmers, who bought far fewer of the seeds this year than Monsanto had anticipated.

Monsanto said the move had been well-received by farmers, though an internal survey showed almost half of respondents wouldnt buy more of its Genuity SmartStax corn and Genuity Roundup Ready 2 Yield soybeans even if prices were lowered.

The corn seed includes several traits conferring herbicide tolerance and protection against insects, while the soybean seed is protected against glyphosate, a key herbicide.

The survey "trends well with the product choice and pricing actions the company previously outlined," the company said.

The St. Louis-based company made the announcement ahead of an annual field event for investors, which starts Wednesday afternoon in Gothenburg, Neb.

Monsanto also said that its corn and soybean seeds "appear to be on track to show differentiated benefits" from its competitors this year.

After two very mild years, insect infestations have increased this year, which gives the corn seeds insect resistance a chance to shine, Monsanto said. In particular, Monsantos corn earworm protection could be valuable, the company said.

Grant will tell investors that with the cheaper pricing, the SmartStax corn seed returns value to the farmer even with only mild insect pressure. Farmers planting the Roundup Ready soybean seed will benefit even if yields are increased by only one bushel an acre, according to Monsanto.

Monsanto said the beginning of the South American season for corn seed sales is "making good progress," and that its repositioning of its Roundup glyphosate business has "gone well." The company said in June it was scaling back its herbicide business and focusing more on the seed side of its business.