Monsanto setting dual seed price plan for 2010
Oct. 10, 2009
"We have to have a balanced approach," said Monsanto Chief Financial Officer Carl Casale. "Youve got to continue to acquire new customers."
Casale said price increases for 2010 would range from 8 to 10 percent across the portfolio on average but some seed offerings would see prices held flat as part of an effort to give broader choice to farmers.
The company plans to introduce at least one new product every year for the next seven years, officials said.
Monsanto is a frequent target of farmer ire for the steep price increases it has implemented over recent years on its popular corn and soybean seed technology - genetic modifications that help farmers maximize yields and efficiencies.
But double-digit price increases have angered certain segments of the farm industry, particularly as farm-gate prices have fallen over the last year.
Some farm groups also complain that Monsanto has a broad hold on the market, squeezing competition and leaving farmers few choices for cheaper seeds.
Monsanto officials said on Wednesday, however, that they were introducing for the first time a strategy to hold prices flat for certain seed offerings they described as "workhorses," proven hybrids lacking some of the sophisticated new technology.
"What were seeing is the emergence of customers who have tried our technologies who are loyal supporters... and then there is another group who have still to try and are still on the edges," said Monsanto Chairman Hugh Grant. "Our job.... we need to drive adoption with that second group."
Casale said the company did not correlate its seed pricing strategies with crop prices but rather with how much value the company thought it was providing the farmer.
Monsanto reported mixed hybrid market share performance for 2009, holding flat with many of its brands, and slipping from 41 percent to 39 percent for its Deltapine cotton seed.
Monsanto said Wednesday that its genetic corn traits were planted on 70.6 million U.S. acres in 2009, while worldwide, Monsantos corn traits were planted on 85.7 million acres.
Soybean traits were planted on 73.2 million U.S. acres in 2009, and 159.5 million acres worldwide.
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