Monsanto is uniquely positioned to capitalize on flourishing agriculture demand
NEW YORK — Monsanto (NYSE: MON) Company’s technologies have placed it in a unique position to help farmers meet the changing supply-demand patterns of global agriculture,
Monsanto’s Executive Vice President of Strategy and Operations, Carl Casale, will tell investors tomorrow.
Casale will deliver his remarks as part of a presentation at the Morgan Stanley Basic Materials Conference 2008 on Thursday in New York.
Casale’s presentation will discuss how there has been a fundamental shift in the agricultural landscape creating a new demand-driven agriculture market fueled by three main factors. These
factors include increased protein demand from rising incomes, demand for grain from China and biofuels.
«The real demand pull comes from China,» Casale said. «To meet the protein demands of this growing population, China will look outside of its agricultural sector, providing an
enormous demand pull for grain over the next decade.»
«The solution to meeting these demands is yield,» Casale said. «In a demand-driven environment opportunity is defined by scarcity or innovation,» he said.
«Monsanto’s strategy is targeted on innovation — discovering and developing technology that is game changing.»
Casale believes the company’s innovation focus sets it apart, both in the value created for farmers and the company’s strategic opportunity. «We will grow because of what we do, how we
invest and what we deliver — not because of what the commodity cycles do,» he said.
Casale believes that the company’s ability to provide technology to boost per-acre productivity will be key to helping farmers meet the needs of a demand-driven market. These potential
technologies, like Roundup Ready 2 Yield soybeans, SmartStax corn and nitrogen-utilization corn are being developed to drive yields to meet these demands, he said.
Monsanto Establishes Global Seed Treatment Platform
As a technology company with strong cash generation, Monsanto has the opportunity to invest in growth areas for agriculture, Casale said.
As part of his presentation, Casale will announce that Monsanto is establishing a global seed treatment platform. The company has entered into separate agreements with Becker Underwood and
Plant Health Care Inc., as novel components of the platform for delivering proprietary seed treatments for corn, soybeans and cotton.
The global platform is a natural complement to the company’s seed strategy and yield-enhancing technology pioneered by Monsanto through biotechnology and breeding, as well as its collaborative
approach to new technologies, Casale said.
«As we develop our seed-treatment platform, we’re planning to stake a leading position in an underserved, but emerging category and to enter into a variety of licensing and supply
agreements,» Casale said. «Seed treatments are the next step in yield protection and delivery, and represent a high-margin global opportunity.»
The global seed treatment industry generates annual sales of greater than $1.5 billion, with almost $900 million in the crops key to Monsanto’s business. Currently, Monsanto treats more than 1
billion pounds of seed each year and sees the potential to expand treatment to new crops and new geographies, Casale said.
«The realizable yield in seeds is so valuable to farmers that seed treatments are the next logical complement to further protect yield created by advanced breeding and biotech
traits,» said Casale.
Monsanto plans to begin offering seed treatments as early as the 2009 season. In 2009, Monsanto plans to treat all Roundup Ready 2 Yield soybeans with a proprietary treatment, aimed at
incremental yield boost in soybeans. Similarly in 2010, Monsanto plans to have a proprietary seed treatment for the launch of its SmartStax corn product, and the company is also working to have
a seed treatment solution for its Deltapine cotton varieties by 2011.
The agreement between Monsanto and Becker Underwood is focused on evaluating a biological seed treatment aimed at helping soybeans improve both their nitrogen fixation ability and overall plant
performance. Monsanto is also working with Plant Health Care Inc. to develop and commercialize a novel seed-based solution for nematodes, a plant parasite that can severely limit crop yields
around the world in crops such as corn, soybeans, cotton and vegetables.
Casale’s presentation slides and simultaneous audio webcast of the presentation may be accessed by visiting the company’s web site at https://monsanto.com/investors/. Following tomorrow’s
live broadcast set for 8 a.m. ET, a replay of the webcast will be available for two weeks through this same link.