Print This PageGrowing Opportunities
U.S. Corn
Worldwide demand for increased yield and superior quality, combined with the power of our core seeds and traits strategy, positions Monsanto to seize expanded growth opportunities across our crops portfolio between now and the end of 2012.
U.S. corn is our most obvious growth engine. With the growing demand for higher-yielding seeds and traits, farmers are increasingly turning to the superior performance of our products. This demand positions us for expanded growth in this growing market.
Our advanced breeding capabilities have helped our national corn brands, like DEKALB, deliver improved yield performance each year. In the process, we have gained more than 12 share points since 2001. Our ability to continually breed a better seed is expected to grow this brand by a cumulative target of up to 10 additional share points by 2012. This is real value as one share point of DEKALB adds $16 million to $18 million in gross profit for the seed alone — in advance of our higher-margin trait offerings.
Farmers’ demand for maximum yield has made our triple-stack corn — which combines Roundup Ready 2 weed control technology with YieldGard Corn Borer and Rootworm insect control — the market leader in the United States. U.S. corn farmers planted more than 17 million acres of triple-stack corn in 2007. We estimate that this product could be planted on 45 million to 55 million acres by 2010.
This triple-stack product offers higher margin potential on each acre and more value for farmers per seed.
We are seeing growing penetration of our higher-value stacked trait offerings in all three of our market channels. In 2007, triple-trait penetration exceeded 40 percent for DEKALB, 34 percent for ASI, and 24 percent for our Corn States business. In 2008, we anticipate our higher-margin triple-trait product will reach 50 percent penetration in our DEKALB and ASI businesses and 35 percent in Corn States.
While our triple-stack corn is expected to be the product of choice leading up to 2010, we remain focused on developing enhanced trait offerings for farmers.
This year, we signed a cross-licensing agreement with Dow AgroSciences aimed at launching SmartStax, the industry’s first stack of eight genes. This product, which combines eight different herbicide-tolerance and insect-protection genes in one seed, offers a more robust trait package in advance of competitive triple-trait offerings.
We anticipate that we will be able to launch SmartStax by 2010, once all necessary approvals have been granted. Once launched, we believe this product has the potential to be used on 60 million to 65 million acres in the United States.
To enhance our market leadership and competitive advantage, we are working on enhanced trait offerings across our corn portfolio. Products in development include traits for drought-tolerance, better nitrogen utilization, and enhanced insect protection. Once approved, we expect to stack these products with SmartStax so that farmers can realize more benefits out of every seed.
