Monsanto reports losses again

According to a report in the Financial Times Germany, the agricultural company Monsanto has had a bad year and is finding it harder and harder to sell its increasingly genetically engineered seed to farmers. Until recently the company seemed to be going from strength to strength: from 2003 to 2008 its share value rose by a factor of 16 and reached a peak in June 2008 of $ 145 (a price – turnover ratio of over 6). Today the shares stand at about a third of their previous value, a development far worse than the market in general over the last two years. In one year they have lost a third of their value. In contrast, the shares of their arch rival DuPont have risen by over 40 % and you now have to pay 2.4 times as much for them.

With good reason to be cautious, over the last two years analysts have adjusted their profit forecasts for 2011 and 2012 downwards by more than a half, the biggest reductions occurring this year. For the first time since 2004, Monsanto has registered a fall in turnover in the financial year ending on 31 August. Once again, the company was confronted by problems with environmental organizations, farmers associations and consumer groups and had to go to court to defend its products. Moreover, CEO Hugh Grant had to break with previous strategies: he was forced to market the latest, most genetically engineered seed at reduced prices because his rival DuPont succeeded in convincing farmers that they had been buying more “technology” from Monsanto than was necessary. Added to this was the fact that the yields from Monsanto’s latest product Smartstax (eight manipulated genes) failed to live up to expectations and were lower than from seed with “only” three manipulated genes.
 

Financial Times Deutschland