Monsanto's R&D Investment has Contributed to Mid-20s Gross Profit Growth for Its Seeds and Genomics Segment

11/03/09 Monsanto's historic investment in research and development in breeding and biotechnology has contributed to a 24 percent compound annual growth rate for the company's Seeds and Genomics segment since 2001. This was one of the key messages Kerry Preete, Monsanto's Vice President of International Commercial, at the Credit Suisse 14th Annual Global Ag Productivity Conference in London.

"Our R&D investment in technology has allowed us to build a robust pipeline of game-changing products focused on yield and stress," Preete will say. "We continue to be the leading company delivering innovations to farmers that help them maximize their farm's potential. That technology leadership has allowed us to commit to more than doubling our gross profit from 2007 through 2012 as we expand the availability of our technologies to farmers around the world."

The company recently applied to the U.S. Department of Agriculture (USDA) for approval of its drought-tolerant corn product, following submission to the Food and Drug Administration (FDA) last December. It also has completed submissions to the relevant Canadian agencies. In its final pipeline phase, this first-ever biotech drought-tolerant corn is part of a family of drought-tolerant products Monsanto plans to bring to the market over the next decade. This marks another key milestone in bringing this product one step closer to farmers and makes it the only dryland, drought-tolerant corn product to have regulatory submissions both to the FDA and the USDA.

Two new technologies emerging from Monsanto's R&D pipeline are Roundup Ready 2 Yield soybeans and SmartStax corn. Both products are expected to change the face of farming and bring farmers new tools to enhance productivity. SmartStax will be the most durable and complete on-far package for weed and pest management, and will be the platform for the company's future corn technologies. Roundup Ready 2 Yield is expected to deliver a 7 to 11 percent yield benefit and will be the trait platform for future yield-enhancing soybean technologies.

Preete noted that the technologies that have lifted yields, lowered costs and increased productivity for U.S. farmers are rapidly becoming available throughout Latin America, particularly for new corn traits in Brazil and Argentina. "The combination of our high quality hybrids with new tools for insect protection through biotechnology have allowed us to gain share in Latin America this fiscal year, and have set the stage for the acceleration of the penetration of new trait technologies as we look to 2012," he said.