Print This PageGrowing Opportunities
Cotton
Cotton farmers are increasingly looking to seed companies to deliver greater productivity to the farm. We believe our recent acquisition of Delta and Pine Land (D&PL), our second-generation technologies, and our full R&D pipeline will serve that need, creating new value for the cotton industry and new opportunities for our business well into the future.
D&PL brings us a strong germplasm library, a well-recognized brand name, and strong customer relationships in key cotton-growing regions throughout the world.
Rusty Stubbs, U.S. cotton farmer.
Stubbs is excited about Monsanto’s recent acquisition of D&PL and the ability of the companies to deliver new innovation to cotton. Stubbs was among a select group of farmers who planted Deltapine’s stacked, second-generation product Bollgard II with Roundup Ready Flex. He enjoys the product’s greater weed-control flexibility and expanded insect-protection capabilities.
We believe the Deltapine brand can benefit from breeding advances similar to those in corn. Our breeders now have access to the world’s largest private collection of cotton germplasm, and we believe we can develop innovative combinations of genes to maximize the potential of that library, both in terms of yield and lint quality.
While we won’t see the commercial results of these initiatives until after 2010, there is a tremendous opportunity in upgrading D&PL ’s product portfolio to second-generation technologies. D&PL had only 17 percent penetration of second-generation traits in its portfolio in 2007, significantly less than that of other leading cotton seed brands. We’re taking steps to fully convert this portfolio to these enhanced second-generation traits.
In 2006, we launched Bollgard II with Roundup Ready Flex in the United States, a stack of two second-generation traits for weed and insect control. This improved product, which commands a price premium over Monsanto’s original Bollgard cotton trait, was planted on nearly 3 million acres of U.S. cotton in 2007.
Farmers are welcoming these new second-generation, double-stacked traits for their improved yield and profitability (see story above). Monsanto is working hard to deliver future traits for drought-tolerance as well as enhanced insect and weed control.
Internationally, our cotton business has an established presence in biotechnology and this sets the stage for additional growth opportunities. A key example is India.
Vishwanath Gore, Indian cotton farmer.
Gore uses Monsanto’s first-generation Bollgard insect-protected technology to protect the yield potential of his cotton crop. Gore, who farms
four acres in the Aurangabad region of India, enjoys the in-the-seed benefits of Bollgard including its ability to protect his crop from damaging insects. The strong adoption of our first-generation product in India establishes
a footprint for Monsanto’s second-generation cotton technology, Bollgard II, which offers expanded insect protection.
Today, we approach the Indian cotton market through our own brands and through a licensing agreement with Mahyco. This business sub-licenses the technology to more than 20 local companies.
With a hybrid cotton seed market of 15 million to 20 million acres, Indian farmers planted more than 13 million acres of Bollgard in 2007 — an increase of approximately 60 percent compared with 2006 — meeting our end-of-decade sales target this year. Farmers are just now seeing the benefits of our second-generation Bollgard II technology, which was introduced in 2007 and used on more than one million acres in its first year. This second-generation technology sets a new standard as local companies offer competitive first-generation seeds. It also offers a higher margin opportunity. We now estimate that the technology could be used on between 15 million and 20 million acres by 2012.
