After Growth, Fortunes Turn for Monsanto
October 4, 2010
As recently as late December, Monsanto was named “company of the year” by Forbes magazine. Last week, the company earned a different accolade from Jim Cramer, the television stock market commentator. “This may be the worst stock of 2010,” he proclaimed.
Monsanto, the giant of agricultural biotechnology, has been buffeted by setbacks this year that have prompted analysts to question whether its winning streak of creating ever more expensive genetically engineered crops is coming to an end.
The company’s stock, which rose steadily over several years to peak at around $140 a share in mid-2008, closed Monday at $47.77, having fallen about 42 percent since the beginning of the year. Its earnings for the fiscal year that ended in August, which will be announced Wednesday, are expected to be well below projections made at the beginning of the year, and the company has abandoned its profit goal for 2012 as well.
The latest blow came last week, when early returns from this year’s harvest showed that Monsanto’s newest product, SmartStax corn, which contains eight inserted genes, was providing yields no higher than the company’s less expensive corn, which contains only three foreign genes. Monsanto has already been forced to sharply cut prices on SmartStax and on its newest soybean seeds, called Roundup Ready 2 Yield, as sales fell below projections.
But there is more. Sales of Monsanto’s Roundup, the widely used herbicide, has collapsed this year under an onslaught of low-priced generics made in China. Weeds are growing resistant to Roundup, dimming the future of the entire Roundup Ready crop franchise. And the Justice Department is investigating Monsanto for possible antitrust violations.
Until now, Monsanto’s main challenge has come from opponents of genetically modified crops, who have slowed their adoption in Europe and some other regions. Now, however, the skeptics also include farmers and investors who were once in Monsanto’s camp.
“My personal view is that they overplayed their hand,” William R. Young, managing director of ChemSpeak, a consultant to investors in the chemical industry, said of Monsanto. “They are going to have to demonstrate to the farmer the advantage of their products.” Brett D. Begemann, Monsanto’s executive vice president for seeds and traits, said the setbacks were not reflective of systemic management problems and that the company was moving to deal with them. “Farmers clearly gave us some feedback that we have made adjustments from,” he said in an interview Monday.
Mr. Begemann said that Monsanto used to introduce new seeds at a price that gave farmers two-thirds and Monsanto one-third of the extra profits that would come from higher yields or lower pest-control costs. But with SmartStax corn and Roundup Ready 2 soybeans, the company’s pricing aimed for a 50-50 split.
That backfired as American farmers grew only six million acres of Roundup Ready 2 soybeans this year, below the company’s goal of eight million to 10 million acres, and only three million acres of SmartStax corn, below the goal of four million.
So now Monsanto is moving back to the older arrangement. SmartStax seed for planting next year will be priced about $8 an acre more than other seeds, down from about a $24 premium for this year’s seeds, Mr. Begemann said. The company will also offer credits for free seed to farmers who planted SmartStax this year and were disappointed.
Monsanto has also moved to offer farmers more varieties with fewer inserted genes. Some farmers have said they often have to buy traits they do not need — such as protection from the corn rootworm in regions where that pest is not a problem — to get the best varieties. This issue has surfaced in the antitrust investigation.
Monsanto’s arch rival, DuPont’s Pioneer Hi-Bred, has also capitalized on the lack of options under a campaign called “right product, right acre.” “If they don’t have a need for rootworm then we won’t have that trait in that product,” Paul E. Schickler, the president of Pioneer, said in an interview.
After years of rapidly losing market share in corn seeds to Monsanto, Pioneer says it has gained back four percentage points in the last two years, to 34 percent. Monsanto puts its market share at 36 percent in 2009 and says it has remained flat this year. In soybeans, Pioneer puts its share at 31 percent, up seven percentage points over the last two years; Monsanto puts its share at 28 percent last year and said it had dropped some this year.
Monsanto had a similar problem with lower-than-expected yields on Roundup Ready 2 soybeans last year, when the crop was first planted commercially, forcing it to slash its premium. But this year, the yield appears to be meeting expectations, said OTR Global, a research firm that surveys farmers and seed dealers. That could bode well for SmartStax next year.
One reason is that the Roundup Ready 2 gene is now offered in more varieties, making it better suited to more growing conditions. The yield of a crop is mainly determined by the seed’s intrinsic properties, not the inserted genes. An insect protection gene will not make a poor variety a high yielder any more than spiffy shoes will turn a slow runner into Usain Bolt. In the first year of a new product, few varieties contain the new gene.
Still, Monsanto is bound at some point to face diminishing returns from its strategy of putting more and more insect-resistant and herbicide-resistant genes into the same crop, at ever increasing prices. Growth might have to eventually come from new traits, such as a drought-tolerant corn the company hopes to introduce in 2012.
“Technologically, they are still the market leader,” said Laurence Alexander, an analyst at Jefferies & Company. “The main issue going forward is do they get paid for the technology they deliver. The jury is still out on that one. It’s going to take a year or two of data to reassure people.”A version of this article appeared in print on October 5, 2010, on page B1 of the New York edition.
GMO Crop Catastrophe in USA a lesson for EU
by F. William Engdahl
22 August 2010
Recently the unelected potentates of the EU Commission in Brussels have sought to override what has repeatedly been shown to be the overwhelming opposition of the European Union population to the spread of Genetically Modified Organisms (GMO) in EU agriculture. EU Commission President now has a Maltese accountant as health and environment Commissioner to rubber stamp the adoption of GMO. The former EU Environment Commissioner from Greece was a ferocious GMO opponent. As well, the Chinese government has indicated it may approve a variety of GMO rice. Before things get too far along, they would do well to take a closer look at the world GMO test lab, the USA. There GMO crops are anything but beneficial. Just the opposite.
What is carefully kept out of the Monsanto and other agribusiness propaganda in promoting genetically manipulated crops as an alternative to conventional is the fact that in the entire world until the present, all GMO crops have been manipulated and patented for only two things - to be resistant or "tolerant" to the patented highly toxic herbicide glyphosate chemicals that Monsanto and the others force farmers to buy as condition for buying their patented GMO seeds. The second trait is GMO seeds that have been engineered genetically to resist specific insects. Contrary to public relations myths promoted by the agribusiness giants in their own self-interest, there exists not one single GMO seed that provides a greater harvest yield than conventional, nor one that requires less toxic chemical herbicides. That is for the simple reason there is no profit to be made in such.
Giant Super-weeds Plague
As prominent GMO opponent and biologist, Dr Mae-Wan Ho of the Institute of Science in London has noted, companies such as Monsanto build into their seeds herbicide-tolerance (HT) due to glyphosate-insensitive form of the gene coding for the enzyme targeted by the herbicide. The enzyme is derived from soil bacterium Agrobacterium tumefaciens. Insect-resistance is due to one or more toxin genes derived from the soil bacterium Bt (Bacillus thuringiensis). The United States began large scale commercial planting of GMO plants, mainly soybeans and corn and cotton around 1997. By now, GM crops have taken over between 85 percent to 91 percent of the areas planted with the three major crops, soybean, corn and cotton in the US, on nearly 171 million acres.
The ecological time-bomb that came with the GMO according to Ho, is about to explode. Over several years of constant application of patented glyphosate herbicides such as Monsanto’s famous and highly Roundup, new herbicide-resistant "super-weeds" have evolved, nature’s response to man-made attempts to violate it. The super-weeds require significantly more not less herbicide to control.
ABC Television, a major US national network, made a recent documentary about the super-weeds under the rubric, "super weeds that can’t be killed. 
They interviewed farmers and scientists across Arkansas who described fields overrun with giant pigweed plants that can withstand as much glyphosate as farmers are able to spray. They interviewed one farmer who spent almost €400 000 in only three months in a failed attempt to kill the new super-weeds.
The new super-weeds are so robust that harvester combines are unable to harvest the fields and hand tools break trying to cut them down. At least 400 000 hectares of soybean and cotton in Arkansas alone have become invested with this new mutant biological plague. Detailed data on other agricultural regions is not available but believed similar. The pro-GMO and pro-agribusiness US Department of Agriculture has been reported lying about the true state of US crop harvest partly to hide the grim reality and to prevent an explosive revolt against GMO in the world’s largest GMO market.
One variety of super-weed, palmer pigweed can grow up to 2.4 meters high, withstands severe heat and prolonged droughts, and produces thousands of seeds with a root system that drains nutrients away from crops. If left unchecked, it takes over an entire field in a year. Some farmers have been forced to abandon their land. To date palmer pigweed infestation in GMO crop regions has been identified in addition to Arkansas, also in Georgia, South Carolina, North Carolina, Tennessee, Kentucky, New Mexico, Mississippi and most recently, Alabama and Missouri.
Weed scientists at the University of Georgia estimate that just two palmer pigweed plants in every 6 meter length of cotton row can reduce yield by at least 23 percent. A single weed plant can produce 450 000 seeds. 
Roundup Toxic Danger Being Covered-up
Glyphosate is the most widely used herbicide in the US and the world at large. Patented and sold by Monsanto since the 1970s under the trade name Roundup, it is a mandatory component of buying GMO seeds from Monsanto. Just go to your local garden store and ask for it and read the label carefully.
As I detail in my book, Seeds of Destruction: The Hidden Agenda of Genetic Manipulation, GMO crops and patented seeds were developed in the 1970’s with significant financial support from the pro-eugenics Rockefeller Foundation, by what were essentially chemical companies - Monsanto Chemicals, DuPont and Dow Chemicals. All three were involved in the scandal of the highly toxic Agent Orange used in Vietnam, as well as Dioxin in the 1970’s, and lied to cover up the true damage to its own employees as well as to civilian and military populations exposed.
Their patented GMO seeds were seen as a clever way to force increased purchase of their agricultural chemicals such as Roundup. Farmers must sign a legal contract with Monsanto in which it stipulates that only Monsanto Roundup pesticide may be used. Farmers are thus trapped both in buying new seeds from Monsanto each harvest and buying the toxic glyphosate.
France’s University of Caen, in a team led by molecular biologist, Gilles-Eric Seralini, did a study that showed Roundup contained one specific inert ingredient, polyethoxylated tallowamine, or POEA. Seralini’s team demonstrated that POEA in Roundup was more deadly to human embryonic, placental and umbilical cord cells than even the glyphosate itself. Monsanto refuses to release details of the contents of its Roundup other than glyphosate, calling it "proprietary."
The Seralini study found that Roundup’s inert ingredients amplified the toxic effect on human cells - even at concentrations much more diluted than those used on farms and lawns! The French team studied multiple concentrations of Roundup, from the typical agricultural or lawn dose down to concentrations 100,000 times more dilute than the products sold on shelves. The researchers saw cell damage at all concentrations.
Glyphosate and Roundup are advertised as "less toxic to us than table salt" in a pamphlet from the Biotechnology Institute promoting GMO crops as ’Weed Warrior.’ Thirteen years of GMO crops in the USA has increased overall pesticide use by 318 million pounds, not decreased as promised by the Four Horsemen of the GMO Apocalypse. The extra disease burden on the nation from that alone is considerable.
Nonetheless after introduction of Monsanto GMO seeds commercially in the USA, use of glyphosate has risen more than 1500% between 1994 and 2005. In the USA some 100 million pounds of glyphosate are used on lawns and farms every year, and over the last 13 years, it has been applied to more than a billion acres. When questioned, Monsanto’s technical development manager, Rick Cole, reportedly said the problems were "manageable." He advised farmers to alternate crops and use different makes of herbicides produced by Monsanto. Monsanto is encouraging farmers to mix glyphosate with its older herbicides such as 2,4-D, banned in Sweden, Denmark and Norway for links to cancer and reproductive and neurological damage. 2,4-D is a component of Agent Orange, produced by Monsanto for use in Vietnam in the 1960s.
US Farmers Turn to Organics
Farmers across the United States are reported to be going back to conventional non-GMO crops instead. According to a new report from the US Department of Agriculture, retail sales of organic food went up to $21.1 billion in 2008 from $3.6 billion in 1997.  The market is so active that organic farms have struggled at times to produce sufficient supply to keep up with the rapid growth in consumer demand, leading to periodic shortages of organic products.
The new UK Conservative-Liberal coalition government is strongly backing lifting a de facto ban on GMO in that country. UK Chief Scientific Adviser, Prof. John Beddington, recently wrote an article in which he misleadingly claimed " The next decade will see the development of combinations of desirable traits and the introduction of new traits such as drought tolerance. By mid-century much more radical options involving highly polygenic traits may be feasible." He went on to promise "cloned animals with engineered innate immunity to diseases" and more. I think we can pass that one up, thank you.
A recent study by Iowa State University and the US Department of Agriculture assessing the performance of farms during the three-year transition it takes to switch from conventional to certified organic production showed notable advantages of organic farming over GMO or even conventional non-GMO crops. In an experiment lasting four years - three years transition and first year organic - the study showed that although yields dropped initially, they equalized in the third year, and by the fourth year, the organic yields were ahead of the conventional for both soybean and corn.
As well, the International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD) has recently been published, the result of three-year deliberation by 400 participating scientists and non-government representatives from 110 countries around the world. It came to the conclusion that small scale organic agriculture is the way ahead for coping with hunger, social inequities and environmental disasters.  As Dr Ho argues, a fundamental shift in farming practice is needed urgently, before the agricultural catastrophe spreads further across Germany and the EU to the rest of the world. F. William Engdahl
 Clea Caulcutt, ‘Superweed’ explosion threatens Monsanto heartlands, Clea Caulcutt, 19 April 2009.
 Carolyn Dimitri and Lydia Oberholtzer, Marketing U.S. organic foods: recent trends from farms to consumers, USDA Economic Research Service, September 2009.
Study Shows Monsanto Roundup Herbicide Link to Birth Defects
F. William Engdahl
Glyphosate was patented by Monsanto in the 1970’s well before GMO was commercialized, as a so-called broad-spectrum weed killer. It is typically sprayed and absorbed through the leaves, or used as a forestry herbicide. It was initially patented and sold by Monsanto under the trade name Roundup, which also contains non-disclosed added chemicals the company refuses to divulge for “trade secret” reasons. As of 2005, 87% of all US soybean fields were planted with glyphosate-resistant varieties of GMO soybeans and sprayed with Roundup.
Because the seeds of Monsanto Roundup Ready GMO soybeans or other crops have been manipulated solely to be “resistant” to Roundup herbicide, while all other plant life in the field is killed by Roundup, farmers using Roundup Ready seeds must also purchase Roundup herbicide, making a captive market for both seed and chemicals.
The problem with this cozy arrangement, aside from the fact that Roundup-resistant “super-weeds” are emerging as a new biological catastrophe (see Katastrophale Folgen von GVO-Pflanzen in den USA – eine Lektion für die EU), is that Glyphosate has now been demonstrated to be linked to birth defects as one of the most highly toxic substances in agriculture. The US Government’s Environmental Protection Agency (EPA), nonetheless continues to regard Roundup as “relatively low in toxicity, and without carcinogenic or teratogenic effects.” In the United States the US Government notoriously relies on test data from Monsanto and the agribusiness industry to make safety rulings, under the 1992 doctrine of Substantial Equivalence which asserts that GMO seeds are “substantially equivalent” to ordinary seeds and thereby need no independent health or safety tests. While herbicides are treated slightly different, the fact that the agribusiness industry influences much of US Government policy has insured the most benign regulatory treatment of Roundup to date.
Carrasco presented his group’s findings at a press conference during the 6th European Conference of GMO Free Regions in the European Parliament in Brussels. He stated, “The findings in the lab are compatible with malformations observed in humans exposed to glyphosate during pregnancy.”
The maximum residue level (MRL) allowed for glyphosate in soy in the EU was raised 200-fold from 0.1 mg/kg to 20 mg/kg in 1997 after genetically manipulated Roundup Ready soy was commercialized in Europe. Carrasco found malformations in embryos injected with 2.03 mg/kg glyphosate. Soybeans can typically contain glyphosate residues of up to 17mg/kg.
1. Paganelli, A., Gnazzo, V., Acosta, H., López, S.L., Carrasco, A.E. 2010. Glyphosate-based herbicides produce terato-genic effects on vertebrates by impairing retinoic acid signaling. Chem. Res. Toxicol., August 9. http://pubs.acs.org/doi/abs/10.1021/tx1001749
Animals Avoid GM Soy And Corn
- The GE-corn and GE-soy mentioned in this article are Monsanto's. The "food safety" bill in the Senate, S 510, is also Monsanto's. Monsanto's idea of "food safety" includes genetically engineered food, pesticides, hormones, antibiotics, or slaughterhouse waste, all toxic.
- Foods You're Eating
- Different species of wildlife and farm animals are trying to tell us something by clearly preferring not to eat Genetically Engineered foods when they have a choice of naturally grown corn, soybeans and other crops as the following wisdom of nature anecdotes confirms. They are smarter than people when it comes to the right choices for eating.
- Neil Carman, Ph.D. Sierra Club Genetic Engineering Committee http://www.SierraClub.org/biotech
- Excerpts from the new book Seeds of Deception: Exposing Industry and Government Lies About the Safety of the Genetically Engineered
- Foods You're Eating
- By Jeffrey M. Smith
- WISDOM OF THE GEESE - p. 45 excerpt
- There's a farmer in Illinois who's been planting soybeans on his 50-acre field for years. Unfortunately, he also had a flock of soybean-eating geese that took up residence in a pond nearby.
- Geese, being creatures of habit, returned to the same spot the next year to again feast on his soybeans. But this time, the geese ate only from a specific part of this field. There, as a result of their feasting, the beans grew only ankle high. The geese, it seemed, were boycotting the other part of the same field where the beans were able to grow waist-high.
- The reason: this year, the farmer had tried the new, genetically engineered soybeans. And you can see exactly where they were planted, for there is a line right down the middle of his field with the natural beans on one side, and the genetically engineered soybeans, untouched by the geese, on the other.
- Visiting that Illinois farm, veteran agricultural writer C.F. Marley said, "I've never seen anything like it. What's amazing is that the field with Roundup Ready [genetically engineered] beans had been planted to conventional beans the previous year, and the geese ate them. This year, they won't go near that field." 1
- WISDOM OF THE COWS - p. 76 excerpt
- In 1998, Howard Vlieger harvested both natural corn and a genetically modified Bt variety on his farm in Maurice, Iowa. Curious about how his cows would react to the pesticide- producing Bt corn, he filled one side of his sixteen-foot trough with the Bt and dumped natural corn on the other side. Normally, his cows would eat as much corn as was available, never leaving leftovers. But when he let twenty-five of them into the pen, they all congregated on the side of the trough with the natural corn. When it was gone, they nibbled a bit on the Bt, but quickly changed their minds and walked away.
- A couple of years later, Vlieger joined a room full of farmers in Ames, Iowa to hear presidential candidate Al Gore. Troubled by Gore's unquestioning acceptance of GM foods, Vlieger asked Gore to support a recently introduced bill in Congress requiring that GM foods be labeled. Gore replied that scientists said there is no difference between GM and non-GM foods. Vlieger said he respectfully disagreed and described how his cows refused to eat the GM corn. He added, "My cows are smarter than those scientists were." The room erupted in applause. Gore asked if any other farmers noticed a difference in the way their animals responded to GM food. About twelve to fifteen hands went up. 1
- "If a field contained GM and non-GM maize, cattle would always eat the non-GM first." -Gale Lush, Nebraska
- "A neighbor had been growing Pioneer Bt corn. When the cattle were turned out onto the stalks they just wouldn't eat them." 2 -Gary Smith, Montana
- WISDOM OF THE COWS AND HOGS - p. 106 excerpt
- Bill Lashmett watched as two or three cows were let into a feeding area at a time. The first trough they came to contained fifty pounds of shelled Bt corn. The cows sniffed it, withdrew, and walked over to the next trough, which contained fifty pounds of natural shelled corn. The cows finished it off. When they were gone and released from the pen, the next group came in and did the same thing. Lashmett said the same experiment was conducted on about six or seven farms in Northwest Iowa, in 1998 and again in 1999. Identical trials with hogs yielded the same results, also for two years in a row.
- WISDOM OF SQUIRRELS, ELK, DEER, RACCOONS, AND MICE - p. 126 excerpt
- For years, a retired Iowa farmer fed squirrels on his farm through the winter months by placing corncobs on feeders. One year, just for the heck of it, he decided to see if the squirrels had a preference for Bt corn or natural corn. He put natural corn in one feeder and Bt corn in another about twenty feet away. The squirrels ate all the corn off the natural cobs but didn't touch the Bt. The farmer dutifully refilled the feeder with more natural corn and sure enough, it was soon gone. The Bt, however, remained untouched.
- The retired farmer got curious. What if the Bt variety was the squirrels' only choice? To find out, he didn't refill the natural corn. At the time, Iowa was plunged into the coldest days of the winter. But day after day, the Bt cob remained intact. The squirrels went elsewhere for their food. After about ten days, the squirrels ate about an inch off the tip of an ear, but that's all. The farmer felt sorry for the squirrels and put natural corn back into the feeders, which the squirrels once again consumed. 1
- "A captive elk escape and took up residence in our crops of organic corn and soy. It had total access to the neighboring fields of GM crops, but never went into them." 2 -Susan and Mark Fitzgerald, Minnesota
- Writer Steve Sprinkel described a herd of about forty deer that ate from the field of organic soybeans, but not the Roundup Ready variety across the road. Likewise, raccoons devoured organic corn, but didn't touch an ear of Bt corn growing down the road. "Even the mice will move on down the line if given an alternative to these 'crops.' " 3
- A farmer in Holland verified the food preference of mice when he left two piles of corn in his mice-infested barn. One pile was genetically modified; the other was natural. The GM pile was untouched while the non-GM pile was completely eaten up. Lashmett, who has a background in biochemistry and agriculture, says that animals have a natural sense to eat what is good for them, and avoid what isn't He witnessed this firsthand in another experiment conducted by a feed store in Walnut Grove, Iowa.
- They put twenty-three separate vitamins and minerals, each in their own bin, out where cows could eat them. The cows would alternate their choice of bins in such a way, according to Lashmett, that they received a balanced, healthy diet. Moreover, their preference changed with the seasons and climate, demonstrating a natural inclination to follow the dictates of their bodies' needs. 1
- WISDOM OF THE MICE - p. 157 excerpt
- The Washington Post reported that mice, usually happy to munch on tomatoes, turned their noses up at the genetically modified FlavSavr tomato scientists were so anxious to test on them. Scientist Roger Salquist said of his tomato, "I gotta tell you, you can be Chef Boyardee and mice are still not going to like them."1
- The mice were eventually force fed the tomato through gastric tubes and stomach washes. Several developed stomach lesions; seven of forty died within two weeks. The tomato was approved without further tests [for human consumption].
- MISSING CHICKENS - p. 182 excerpt
- According to BBC News, April 27, 2002:
- "Safety tests on genetically modified maize currently growing in Britain were flawed, it has emerged. The crop, T-25 GM maize [corn], was tested in laboratory experiments on chickens. During the tests, twice as many chickens died when fed on T-25 GM maize, compared with those fed on conventional maize. This research was apparently overlooked when the crop was given marketing approval in 1996." 1