ST. LOUIS, Mo. — Lower prices have global corn producers looking for ways to save on inputs, including seed corn. That likely means lower seed corn sales for Monsanto and DuPont, who hope producers are willing to pay premiums for new soybean traits to be rolled out in the next two seasons.
That trend shows in Monsanto’s latest quarterly report, issued Jan. 7, where the decline in corn seed and traits revenue almost matched the increase in revenue from soybean seeds. Net sales of soybean seeds and traits increased $129 million during the first quarter of Monsanto’s fiscal year, from September to November. Net sales for corn seed and traits declined $126 million.
Monsanto acknowledged a softer market for seed corn, telling its investors that "next generation soybean technologies" will be important to the company’s earnings growth. The company highlighted sales strength in South America for Intacta RR2 PRO soybeans. In the U.S., Monsanto expects acreage to expand for its Roundup Ready 2 Yield platform.
Monsanto is anticipating a 2016 release of the Roundup Ready 2 Xtend Crop System, which will allow pre-emergent and post-emergent applications of dicamba on soybeans stacked with the Roundup Ready trait. That will be the biggest biotech trait launch in company history, according to Monsanto’s earnings summary.
Dicamba-tolerant soybeans will give growers another tool against glyphosate resistance. "Overall, we can expect to see better annual and perennial broadleaf control in soybeans," with dicamba tolerance, said Dwight Lingenfelter, Penn State University agronomist. The new tool will require proper use upon its U.S. approval. "Off-site movement of 2,4-D and dicamba to sensitive non-target plants remains a concern," he said.
DuPont Pioneer is also expanding its Pioneer brand T series, which includes the Genuity RoundupReady2Yield trait. "The new class contains 33 new products ranging in maturity from Relative Maturity (RM) 006 to RM 76, including two maturity group 7 varieties that expand the range of Pioneer products soybean growers need in the Deep South," stated the 2015 soybean variety announcement from DuPont Pioneer. New varieties are also being offered to growers expanding soybean production in the Northern Plains.
Both Monsanto and DuPont CEOs have expressed satisfaction with their company’s performance during a corn downturn.
"The near-term headwinds in agriculture persist, but our ability to deliver new solutions to help farmers improve yields while efficiently using resources provides the opportunity to deliver growth in both the current environment and over the longer-term," Hugh Grant, Monsanto CEO, said in the earnings report.
Both are publicly traded companies, so investors and stock analysts closely watch Monsanto and DuPont for signs of growth.
The companies are different in that Monsanto focuses on agriculture; the company reported $15.8 billion in net sales during its 2014 fiscal year. Agriculture is one of seven segments at DuPont, which reported $35.7 billion in net sales for 2013, including $11.8 billion in DuPont’s agriculture segment. DuPont has not yet released its 2014 fiscal year results.
