New Monsanto corn improves yields in north, not overall
Monsanto said Monday that its premium corn seed yielded lower than its legacy product in its first year, but that its performance was encouraging in the northern corn belt, a key growing area.
With the U.S. harvest all but finished, the company's SmartStax corn seed yielded 2.5 bushels per acre less than the legacy product over 15,700 samples.
However, SmartStax, which combines eight biotech traits and was introduced into corn fields this year, showed on average a 3.6-bushel-per-acre yield advantage in 5,600 samples across the northern corn belt over the legacy product, which includes just three biotech traits.
The U.S. Department of Agriculture most recently projected a national average yield of 155.8 bushels per acre.
The results in the northern corn belt reaffirm the company's strategy for 2011, Chief Executive Hugh Grant said in a presentation to investors. Troubles with SmartStax were limited to a couple of existing hybrid seeds to which the biotech traits were introduced, the company said.
"Despite a rocky start with a couple of hybrids, it delivered," Grant said of SmartStax.
The yield data has been closely watched by investors looking for signs that the company's new premium seed is outperforming its legacy products. The company has been forced to roll back prices on SmartStax for 2011 in response to a farmer backlash on pricing, but officials have said its long-term strategy is to raise prices once the seed has proved its value.
Early yield reports from September showed that the SmartStax seed was yielding no better, and in some cases worse, than its legacy products, which sent stock prices tumbling.
The St. Louis-based company reiterated Monday that lower-than-expected rootworm infestations this season has in some cases negated the advantage of SmartStax, designed to protect crops against various pests, but that its potential will emerge over time.
SmartStax will be offered with a wider variety of hybrids over the next couple of years, and its yield improvement is likely to follow that of its Roundup Ready soybean line, which also struggled initially before being introduced to more hybrids, officials said.
The company also reported that its premium soybean seed, Roundup Ready 2 Yield, demonstrated a yield advantage of more than 3 bushels per acre. It reiterated that it expects demand for the seed to climb next year into the "mid-teens millions of acres" in 2011.
The USDA projects a national average yield of 44.7 bushels per acre for soybeans.
Meanwhile, Monsanto is maintaining a dominant advantage in yields over rival Pioneer Hi-Bred, executives said.
The yield advantage for Monsanto's DeKalb seed brand over Pioneer Hi-Bred, DuPont Co.'s (DD) seed company, was 9.3 bushels per acre averaged over three years, up from 7.9 bushels per acre a year ago, said Ted Crosbie, Monsanto's vice president for plant breeding.
"There is zero evidence they are catching our corn breeding," he said.