Battle of the Beans

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January 24, 2018 / 1:07 AM / 5 days ago

Battle of the beans: Monsanto faces a fight for soy market


WINNIPEG, Manitoba/CHICAGO (Reuters) – Monsanto Co (MON.N) is facing major threats to its historic dominance of seed and herbicide technology for the $40 billion U.S. soybean market.

A sample of clean, processed soybeans at Peterson Farms Seed facility in Fargo, North Dakota, U.S., December 6, 2017. Photo taken December 6, 2017. REUTERS/Dan Koeck

Rivals BASF SE (BASFn.DE) and DowDuPont (DWDP.N) are preparing to push their own varieties of genetically modified soybeans. At stake is control over seed supply for the next generation of farmers producing the most valuable U.S. agricultural export.

The market has opened up as Monsanto’s Roundup Ready line of seeds – engineered to tolerate the weed killer glyphosate – has lost effectiveness as weeds develop their own tolerance to the chemical. Compounding the firm’s troubles is a national scandal over crop damage linked to its new soybean and herbicide pairing – Roundup Ready 2 Xtend seeds, engineered to resist the chemical dicamba.

The newly competitive sector has sown confusion across the U.S. farm belt, particularly among smaller firms that produce and sell seeds with technology licensed from the agrichemical giants.

Many of these sellers told Reuters they are amassing a surplus of seeds with engineered traits from multiple developers – at substantial extra cost – because they can only guess which product farmers will buy.

“Our job is to meet our customers’ needs, and we don’t know what those are going to be,” said Carl Peterson, president of Peterson Farms Seed near Fargo, North Dakota. “I don’t think I’ve ever seen anything quite like this.”

Monsanto has much to lose. Soybeans are the key ingredient in feed used to fatten the world’s cattle, pigs, chickens and fish.

Net sales of Monsanto’s soybean seeds and traits totaled almost $2.7 billion in fiscal 2017, or about a fifth of its total net sales. Gross profits from soybean products climbed 35 percent over 2016, beating 15 percent growth of its bigger corn seed franchise.

The firm faces multiple lawsuits, along with regulatory restrictions in some U.S. states, because dicamba has drifted onto neighboring farms and fields and damaged crops not genetically modified to resist it.

For a graphic on weeds’ growing resistance to farming herbicides, click

For a map on Monsanto’s crop damage crisis, click

BASF and DowDuPont, however, have their own obstacles to overcome, fueling unprecedented uncertainty among farmers over which seeds they will plant on an estimated 90 million acres of U.S. farmland this spring.