tagged w/ Market shares
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Reality's biting for Monsanto. John Gilbert, an Iowa farmer tells the Christian Science Monitor about GM crop uptake: "A lot of it, to be perfectly honest, is herd mentality. They believe Monsanto when they say it's going to yield more." But scepticism has begun to set in, with the Christian Science Monitor noting that a common criticism now being leveled at GM firms like Monsanto is that crop yield increases have largely been the result of advances in conventional breeding, but that those features are only being made available in strains sold with genetically-modified traits as well.
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1.Monsanto's Fortunes Turn Sour
The New York Times, 4 October 2010
http://www.nytimes.com/2010/10/05/business/05monsanto.html?_r=1
As recently as late December, Monsanto was named "company of the year" by Forbes magazine. Last week, the company earned a different accolade from Jim Cramer, the television stock market commentator. "This may be the worst stock of 2010," he proclaimed.
Monsanto, the giant of agricultural biotechnology, has been buffeted by setbacks this year that have prompted analysts to question whether its winning streak from creating ever more expensive genetically engineered crops is coming to an end.
The company’s stock, which rose steadily over several years to peak at around $145 a share in mid-2008, closed Monday at $47.77, having fallen about 42 percent since the beginning of the year. Its earnings for the fiscal year that ended in August, which will be announced Wednesday, are expected to be well below projections made at the beginning of the year, and the company has abandoned its profit goal for 2012 as well.
The latest blow came last week, when early returns from this year’s harvest showed that Monsanto’s newest product, SmartStax corn, which contains an unprecedented eight inserted genes, was providing yields no higher than the company’s less expensive corn that contains only three foreign genes.
Monsanto has already been forced to sharply cut prices on SmartStax and on its newest soybean seeds, called Roundup Ready 2 Yield, as sales fell below projections.
But there is more. Sales of Monsanto’s Roundup, the widely used herbicide, has collapsed this year under an onslaught of low-priced generics made in China. Weeds are growing resistant to Roundup, dampening the future of the entire Roundup Ready crop franchise. And the Justice Department is investigating Monsanto for possible antitrust violations.
Until now, Monsanto’s main challenge has come from opponents of genetically modified crops, who have slowed their adoption in Europe and some other regions. Now, however, the outspoken critics also include farmers and investors who were once in Monsanto’s camp.
“My personal view is that they overplayed their hand,” William R. Young, managing director of ChemSpeak and a consultant to investors in the chemical industry, said of Monsanto. “They are going to have to demonstrate to the farmer the advantage of their products.”
Brett D. Begemann, Monsanto’s executive vice president for seeds and traits, said the setbacks were not reflective of systemic management problems and that the company was already moving to deal with them.
“Farmers clearly gave us some feedback that we have made adjustments from,” he said in an interview Monday.
Mr. Begemann said that Monsanto used to introduce new seeds at a price that gave farmers two thirds and Monsanto one third of the extra profits that would come from higher yields or lower pest-control costs. But with SmartStax corn and Roundup Ready 2 soybeans, the company’s pricing aimed for a 50-50 split.
That backfired as American farmers grew only 6 million acres of Roundup Ready 2 soybeans this year, below the company’s goal of 8 million to 10 million acres, and only 3 million acres of SmartStax corn, below the goal of 4 million.Reality's biting for Monsanto. John Gilbert, an Iowa farmer tells the Christian... more
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Shares of Monsanto Co. continued to slide early Thursday, then perked up a bit, after the company reported Wednesday that its fiscal 2009 earnings would be at the lower end of guidance because price cuts by Chinese competitors and cooler, wetter weather in the U.S. have led to lower sales of its Roundup glyphosate herbicide.
Monsanto shares were trading below $79 a share earlier Thursday morning, but later inched closer to Wednesday’s market close of $79.88 a share. Monsanto closed Tuesday at $84.78 a share.
“We believe that Monsanto shares will probably tread water,” Jeffrey Zekauskas, a J.P. Morgan analyst, wrote in a note to investors Thursday morning.
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LOL, oh yes, colder wetter weather is stopping use of Round Up as well as "competitors"... I think it is also more likely that more people are finally becoming wise to the POISON they are selling. Something to celebrate. Hopefully it will keep treading water and then drown. ANY company selling this poison needs to be held accountable for it. Profit sheets are a good way to do it. Keep it going.Shares of Monsanto Co. continued to slide early Thursday, then perked up a bit, after... more
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