Monsanto Expects Improved Seed Margins In 2011 Despite Price Cut
Monsanto Co. (MON) expects improved margins for its seed and genomics segment in 2011 even after rolling back prices, the company’s chief financial officer said Wednesday.
The St. Louis-based seed producer cut prices for its top corn seed coming into 2011 in response to a farmer backlash on pricing and uncertainty about yield performance. Still, margins were flat and should end up higher overall for the year, Chief Financial Officer Pierre Courduroux said in a conference call following second-quarter earnings.
“We see that as a very positive signal that our mix strategy is working,” he said.
Meanwhile, prices for its top soybean seed, Roundup Ready 2 Yield, have remained strong, with no late-season discounts, Chief Executive Hugh Grant said.
Monsanto, along with companies throughout the agriculture industry, have enjoyed increased sales and earnings due to soaring commodity prices and a strong farm economy.
But Grant said the company’s ability to improve its pricing will depend on innovation and new products, rather than volatile crop prices, he said.
“We are not a fertilizer stock, and we need to price for the demonstrated value on the farm,” he said.
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