Big Expectations for Monsanto Company in Wheat Market
With its purchase of the WestBred® product line earlier this year, Monsanto is moving back into the wheat seed market. But what is the big picture with the wheat industry, and how does Monsanto plan to ensure its long-term success there?
In 2004, Monsanto decided to discontinue its efforts in biotech wheat. Since that time, the landscape has changed, creating a more favorable climate in which to reenter the market. Moreover, global demands for food, particularly wheat, are continuing to grow at a pace that is putting pressure on the supply/demand balance for this crop. In fact, a recent report indicated that in seven of the last 10 years, worldwide demand for wheat has exceeded production.
Given this increased demand, “there’s been a pronounced shift in industry interest and support for new technology in wheat over the past few years,” Jennifer Ozimkiewicz, Monsanto business development lead, said. “We’ve had many conversations with stakeholders throughout the wheat value chain who’ve encouraged greater investment in wheat and pledged to work with technology providers like Monsanto. Also, the technology opportunity is different. "Today, we have pipeline technology in our other core crops that have the potential to address critical issues such as water availability, fertilizer efficiency, disease resistance and yield improvement that could effectively benefit all wheat acres and wheat classes."
With positive momentum gaining in the wheat market, the opportunities presented by purchasing an industry leading product line like WestBred was too good to pass up. “By buying the WestBred line, Monsanto has signaled a long-term commitment to the wheat business,” Sean Gardner, Monsanto global wheat lead, said. “Being able to make this purchase is a once-in-a-generation opportunity.”
For Monsanto, the components for near-term success in the wheat market are certainly in place. “In addition to our current robust pipeline of products, we’re planning to deploy state-of-the-art breeding technologies to bring new wheat products that add incremental, long-term value to the wheat supply chain, from growers to end users,” Jeff Koscelny, wheat product manager, said.
“Biotech wheat is in process and wheat breeding is experiencing heavy investment,” Gardner said. “We recognize that university and private wheat breeding programs have had limited resources in the past to make the necessary advancements in wheat production. As such, Monsanto is prepared to allocate a lot of resources into the biotech pipeline, as well as expanding our private/public partnerships with land-grant universities, something we hope our growers look upon very favorably.”
Unique Challenges Confronting Wheat
Although all early indications point to success in the wheat market, significant hurdles still exist. In particular, wheat acreage continues to constrict in many regions in favor of soybeans and corn. The diminished acreage, coupled with the lag in technology investments, has caused wheat productivity to decline. In the northern and western U.S. and Canada, “wheat has historically been the most consistent crop to grow,” Koscelny said. “But in areas that are capable of growing multiple crops, new corn and soybean technologies have made these crops more viable.”
“Many farmers in my area now aren’t bothering to plant wheat,“ Virgil Ast, a farmer in western Missouri, said. “It used to be that you had to have wheat; now, you don’t really have to double-crop due to the good yields on beans and the great yields on corn. One crop is maybe better and easier than fighting wheat and then double cropping.”
If the trend to plant less wheat continues, many parties who rely on wheat will be severely impacted. “Large users of wheat, such as commercial bakers, are increasingly concerned about its long-term availability,” Koscelny said.
Certainly, many of the technologies in Monsanto’s platform are going to be able to help neutralize concerns about wheat viability and availability, but “it will probably take several years until biotech wheat is on the market,” Gardner said. “Although there are certainly some good advancements in the immediate future, the basic framework of the wheat business is not really going to change much. But significant technologies are going to be offering huge benefits a decade from now.”
Near-Term Enhancements Mean Seamless Opportunities
The focus in the short term, then, will be to ensure breeding better wheat-seed offerings for farmers and to make sure products are available to growers as quickly and seamlessly as possible. “The WestBred product pipeline is continuing uninterrupted, and we expect increased investment and improving genetics, Gardner said. “We are taking a very deliberate, considered approach, but the customer won’t see or feel a lot of change in the short term.”
“The infrastructure in many wheat production areas for handling certified wheat seed for planting is less developed when compared to corn, soybeans or cotton,” Koscelny said. “With this said, we are proud of the network of associates that WestBred has servicing the market and will be evaluating ways to optimize the current infrastructure to meet growing demands. Long-term, the industry needs a stable, wide-spread footprint to provide the future technologies to farmers that enable higher profit potential and a means to reverse the trend of losing wheat acres to other crops.”
“We’re constantly exploring ways to help farmers protect and preserve wheat yields on their farms through the application of biotechnology,” Ozimkiewicz said. “The wheat industries in key wheat-growing geographies, including the United States, Canada and Australia, have called on public and private institutions to step up investment in new technology for wheat, and that spells real opportunity for us and, most importantly, our grower customers.”
WestBred® is a registered trademark of Monsanto Technology LLC. ©2009 Monsanto Company.
Does anyone working with this company eat the food that your company has genetically engineered?
I think out of ethics and a conscious, your organization would immediately and voluntarily label any food grown from your company's genetically engineered seeds, pesticides, soil, etc. as such. If you say you are not responsible for the food grown from your company's materials, then perhaps your company could immediately campaign to change the current laws to demand and enforce that all genetically engineered food be labeled as so. Are you afraid that consumers will not want to purchase food grown from your products?