ST. LOUIS — Monsanto Co. said plans to roll out new corn and soybeans next year are on track and are a big reason why the company expects to double its gross profits in 2012 from 2007 levels.
Hugh Grant, chairman and chief executive officer, told participants at the Credit Suisse 22nd Annual Chemical and Ag Science Conference on Sept. 15 that Monsanto remains on target to help farmers benefit with improved seeds and technology, including the 2010 debut of Genuity Roundup Ready 2 Yield soybeans and Genuity SmartStax corn. The corn variety is expected to be planted on 3 million to 4 million acres, while the soybean variety is planned for 7 million to 8 million acres. Combined, the two varieties are expected to create approximately one-third of the company’s gross profit growth to 2012, Mr. Grant said.
"We continue to see the benefits both to growers and our company as we fund and bring to marketplace the innovation that has helped us develop leading seeds and technologies for our customers even as we compress our spending in other areas of the business," he said. "Simply put, our growth is driven by growers and the decisions they make each year. That’s why it’s critical that we continue to support the robust pipeline and products that help us and the hundreds of licensees of our technologies to win their business year after year.
"Even as we reset the business in 2010, this wave of new platform-changing products keeps us on track to meet our promise to farmers and to deliver on our shareowner commitments for 2012."
Mr. Grant said Genuity SmartStax is expected to have a 5% to 10% higher yield potential and Genuity Roundup Ready 2 Yield is expected to have more than 7%.
"As we upgrade the technology platform on each acre of corn, soybeans and cotton, we create more yield — and more profit — for our farmer customers," Mr. Grant said. "As a result of delivering benefits on the farm and to our many seed company licensees, we expect our U.S. seed business alone to generate more gross profit in 2012 than our entire seed portfolio did around the world in 2009."
In addition to its progress on new seed varieties, Monsanto continues to make progress on its restructuring efforts, Mr. Grant said. The company is expected to realize approximately one-third of its targeted cost cuts of $220 million to $250 million annually in fiscal 2010. The full benefit of the savings is expected to be realized beginning in fiscal year 2011, according to Monsanto.