Monsanto positions itself as a green company.
“Using the tools of modern biology,” its website informs us, “we help farmers grow more yield sustainably so they can produce more and conserve more.”
Compare that twaddle to this bit from Monsanto’s announcement on Tuesday:
[Monsanto’s Chief Financial Officer Terry] Crews will indicate that Monsanto’s Roundup® and other glyphosate-based herbicides business is on track to be above $1.9 billion of gross profit for the 2008 fiscal year, ahead of the previous forecast.
Wow. Nearly $2 billion in profit, from Roundup alone. As recently as February, Monsanto was expecting to make $1.4 billion from its herbicide division this year. I guess farmers applied it even more copiously than expected.
But the company isn’t just churning out profit by peddling weed-killer. Its seeds are doing pretty well, too — particularly corn:
Crews will also note that for the 2008 fiscal year, the company’s corn business should exceed $2 billion in gross-profit generation for the first time.
Interesting. So it makes nearly as much on herbicide as it does on corn seeds. (Overall, the company expects to make $3.8 billion on seeds in ’08).
Investors applauded Monsanto’s announcement, sending shares up 7.5 percent Tuesday.
I wonder if they’re being short-sighted. Monsanto’s success rests on Roundup Ready technology — selling seeds genetically engineered to withstand heavy doses of its flagship herbicide.
But Roundup-tolerant weeds (so-called "superweeds") are on the rise. Eventully, farmers will have to shift away from Roundup — Monsanto’s $1.8 billion cash cow.
Meanwhile, Bayer is rolling out a new line of herbicide-tolerant seeds, this one designed to withstand doses of Bayer’s glufosinate herbicide. Ain’t the agrichemical industry grand?
