Milestones for 2009 Signal Soybean Renaissance and Acceleration of Corn
Momentum, with Gross-Profit Growth in Corn of 25 Percent to 30 Percent
MONMOUTH, Ill., Aug. 12 /PRNewswire-FirstCall/ -- Monsanto Company
(NYSE: MON) is in a position between 2008 and 2012 to launch multiple
game-changing technologies, widen its competitive lead, and create even
greater growth from seeds and traits as it brings greater yield to farmers
around the world, Hugh Grant, Monsanto's chairman, chief executive officer
and president, will tell investors today.
Grant's comments will kick off the company's third-annual summer field
event for investors, held at Monsanto's field research facility in
Monmouth, Ill. In the working research fields at the Monmouth facility,
investors will get a first-hand look at the next-generation products in
Monsanto's R&D pipeline that represent game-changing technologies for
growers, Grant indicated.
"There's no crystal ball in agriculture, but when you walk through
these research fields, it's as close as you come to seeing the future in
agriculture," said Grant. "Within one farm, you see the technologies that
already exist and have the potential to rewrite the agricultural landscape
next year and 10 years from now planted side-by-side. Based on our
innovation, we have the potential to double yields for our customers in
corn, cotton and soybeans by 2030."
"With what we have in hand today, we're in a position to widen our lead
over the competition, with acceleration beginning with 25 percent to 30
percent gross-profit growth in our corn business in fiscal year 2009."
Grant indicated that recent performance and continued opportunities in
the company's key platforms, including its U.S. soybean and corn businesses
featured at the investor event, underscore the company's expanding
technology leadership and first-mover advantage.
Soybean Renaissance
The centerpiece of Monsanto's investor event is its Roundup Ready 2
Yield soybean technology which is on track for a controlled commercial
release on 1 million to 2 million acres in 2009.
"New technology rewrites historical assumptions about yield, and that's
exactly the case with Roundup Ready 2 Yield soybeans," said Grant. "We
expect Roundup Ready 2 Yield to be delivered on time, as promised and with
a step change in yield that's equivalent to almost a decade's worth of
breeding gains."
Grant noted that the gross profit of the soybean seeds and traits
business globally is expected to grow by approximately 15 percent for
fiscal year 2008. In fiscal year 2009, soybean gross profit is expected to
grow by an additional 5 percent, recognizing that Monsanto expects total
U.S. planted acres to decline to 70 million acres from the estimated 74
million acres planted this year.
As a part of today's event, investors will see a seed production field
of Roundup Ready 2 Yield soybeans that will support more than 1,000 acres
of commercial seed to be sold in 2009, one of dozens of seed production
fields planted this year as Monsanto gears up for the release.
Creating Value for Soybean Growers
As the first new soybean biotechnology trait launch in more than a
decade and the first-ever yield-enhancing trait for soybeans, Roundup Ready
2 Yield soybeans are among the most anticipated new product launches in the
seed industry, Grant said.
At current commodity values, Roundup Ready 2 Yield soybean's 7 percent
to 11 percent yield advantage versus first-generation Roundup Ready
varieties creates approximately $35-to-$65 of incremental yield value to
farmers for the trait alone. Consistent with Monsanto's established
approach to sharing value created with farmers, the suggested retail
premium for Roundup Ready 2 Yield trait in Monsanto's Asgrow brand compared
with the first-generation Roundup Ready trait will be roughly one-third to
one-half of this newly created value. At the retail level for the Asgrow
brand, pricing for seed with the Roundup Ready 2 Yield trait will reflect a
seamless price for the value of the elite seed germplasm and the trait, as
well as new seed treatments offered with Roundup Ready 2 Yield.
In addition to Roundup Ready 2 Yield soybeans, Monsanto highlighted a
number of other key soybean pipeline products that are under development
that would be stacked with the Roundup Ready 2 Yield trait. These soybean
products include: dicamba tolerant soybeans; soybeans containing an
intrinsic yield trait that would provide additional yield on top of the
Roundup Ready 2 Yield trait; a soybean product which produces omega-3 fatty
acids; and a soybean product that produces a high stability soybean oil
that eliminates trans fats and reduces the saturated fat content of soybean
oil.
Corn Momentum
The re-launch of the soybean platform follows the path of the
continuing momentum generated by the company's corn business, both in the
United States and internationally, Grant noted.
For fiscal year 2008, gross profit in the corn seeds and traits
business is expected to grow by approximately 25 percent. The company
expects corn gross profit to grow another 25 percent to 30 percent in
fiscal year 2009 because of the value being delivered to farmers through
high-yielding hybrids. Grant noted that the gross profit expectation
reflected an assumption of 90 million planted acres in the key U.S. corn
market for 2009.
Among the key milestones Grant noted within the corn platform:
-- U.S. seed share: Going into the 2009 selling season, Monsanto
expects to extend its 8-straight years of corn share gains as farmers
continue to switch to higher yielding seeds. Monsanto recently increased
its 2009 share expectation for its national seed brand, DEKALB, to 2 or
more points, up from its previous range of 1-2 share points. The increase
reflects the company's continuing confidence in the ability of its
underlying seed and traits to outperform the best competitive alternatives,
Grant said.
Monsanto's American Seeds, Inc. (ASI) brands also gained 1-2 share
points in 2008, establishing ASI's seed position at 10-11 percent of the
total market. The company expects ASI's organic growth to continue with a
1-share point gain targeted for 2009.
-- Expanded trait penetration: Farmers in the United States planted
approximately 28 million acres of Monsanto's triple-stack corn in 2008,
above original projections of 25 million to 27 million acres. For 2009,
Monsanto expects triple-stack acreage will grow to 34 million to 35 million
acres, reflecting more than 65 percent penetration in the DEKALB and ASI
brands.
Supporting the expanded trait penetration in 2009 will be an expanded
value-based pricing model for corn traits. The new approach creates seven
pricing zones in the United States and better matches the trait pricing to
the value the farmer receives and is expected to help further trait
penetration and set the stage for the launch of the SmartStax corn platform
in 2010. While prices vary by region, the weighted average price of
triple-stack traits will increase approximately one-third from 2008 to
2009.
-- Preparation for SmartStax regulatory approval: In June, Monsanto
announced it had submitted its SmartStax product to the U.S. Environmental
Protection Agency for regulatory approval, making it the first-ever stacked
product with multiple effective genes against both lepidopteran and corn
rootworm pests to reach this important regulatory milestone. The product
remains on track for commercial launch in 2010 pending appropriate
regulatory approvals.
-- International growth: Monsanto reiterated its target to grow its
share in key international corn geographies by 1-2 share points in 2009. In
Latin America, Monsanto is launching new trait packages in both Argentina
and Brazil. The Argentinean and Brazilian regulatory approvals came earlier
than anticipated in Monsanto's growth plan, accelerating the company's
opportunity and creating an important first-mover advantage, Grant said.
o In Argentina, Monsanto received the first-ever approval for a
double-stack trait combination, YieldGard Corn Borer with Roundup Ready
Corn 2, and plans to offer the combination on more than 1 million acres in
its first year of introduction.
o In Brazil, Monsanto received planting approval for the YieldGard Corn
Borer trait and is planning for a 1 million to 2 million acre launch for
the upcoming 2008-2009 season.
-- Corn pipeline: Grant also highlighted Monsanto's progress on its
next generation of biotechnology traits, including its drought-tolerant
corn and corn with enhanced nitrogen use efficiency. Monsanto continues to
lead the industry in the development of new traits targeted to increase
grower yields.
Investor Event Materials
Materials related to this investor briefing are available on the
company's web site at http://www.monsanto.com/. These materials include:
-- A comprehensive guide that provides an overview of the projects
featured as a part of the investor field event. A copy of the field guide
is available at:
http://www.monsanto.com/monsanto/layout/investor/financial/presentations.as
p.
-- Presentations by Monsanto's executive team will also be available on
Monsanto's website at:
http://www.monsanto.com/monsanto/layout/investor/financial/presentations.as
p.
About Monsanto
Monsanto is an agriculture company. The company is a leading provider
of technology-based solutions and agricultural products that improve farm
productivity and food quality. Monsanto is committed to investing in
products that can make a difference for its farmer customers and the land
they farm. The company uses plant breeding, plant biotechnology and other
applications of modern science to support its commitment to agriculture and
the farmers that feed, clothe and fuel our growing world. For more
information on Monsanto, see http://www.monsanto.com/.
Cautionary Statements Regarding Forward-Looking Information:
Certain statements contained in this release are "forward-looking
statements," such as statements concerning the company's anticipated
financial results, current and future product performance, regulatory
approvals, business and financial plans and other non-historical facts.
These statements are based on current expectations and currently available
information. However, since these statements are based on factors that
involve risks and uncertainties, the company's actual performance and
results may differ materially from those described or implied by such
forward-looking statements. Factors that could cause or contribute to such
differences include, among others: continued competition in seeds, traits
and agricultural chemicals; the company's exposure to various
contingencies, including those related to intellectual property protection,
regulatory compliance and the speed with which approvals are received, and
public acceptance of biotechnology products; the success of the company's
research and development activities; the outcomes of major lawsuits;
developments related to foreign currencies and economies; successful
operation of recent acquisitions; fluctuations in commodity prices;
compliance with regulations affecting our manufacturing; the accuracy of
the company's estimates related to distribution inventory levels; the
company's ability to fund its short-term financing needs and to obtain
payment for the products that it sells; the effect of weather conditions,
natural disasters and accidents on the agriculture business or the
company's facilities; and other risks and factors detailed in the company's
most recent periodic report to the SEC. Undue reliance should not be placed
on these forward-looking statements, which are current only as of the date
of this release. The company disclaims any current intention or obligation
to update any forward-looking statements or any of the factors that may
affect actual results.
Notes to editors: Roundup Ready 2 Yield, Roundup Ready, DEKALB, Asgrow,
YieldGard and SmartStax are trademarks of Monsanto Company and its wholly
owned subsidiaries.
SOURCE Monsanto Company
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Related links:
http://www.monsanto.com
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CONTACT:
Danielle Jany of Monsanto Company,
+1-314-694-2478
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