E-mail this article to
yourself or a friend.
Enter address:


Slow Roundup sales illustrate big risk, some say

(Thursday, May 1, 2003 -- CropChoice news) -- The following items touch on the financial condition of Monsanto Co. The first report covers lower Roundup sales. The second and third pieces touch on a report calling Monsanto's biotechnology focus to be a risky investment.

  • Roundup sales down, Monsanto reports

    Net sales of Roundup and other glyphosate-based agricultural herbicide were 11% lower during this year's first quarter than last, Monsanto reported today. Net sales were $321 this year compared with $361 last year. Net sales decreased 6% to $1.1 billion in the first quarter, primarily because of lower US sales of Roundup, the company said. Corn seed sales for the quarter were up, however.

    Revenues for Monsanto's corn and soybean technology traits were lower if you compare the first quarter of last year with this year's first quarter, but sales are expected to increase on a US crop year basis, as shifts in the timing of US sales were the major factors affecting this year's first-quarter results, Monsanto says.

    Lower sales of branded soybean seeds and traits in the US, and of selective herbicides globally, also affected the quarter-to-quarter comparison. Excluding the effects of accounting changes in both periods, first-quarter 2003 net income was $72 million, compared with last year's first-quarter net income of $86 million.

    Source: Agriculture.com, http://www.agriculture.com/default.sph/AgNews.class?FNC=goDetail__ANewsindex_html___49823___1

  • Monsanto investors face catastrophic risk
    (Friday, April 18, 2003 -- CropChoice news) -- The following is from a news release.

    The agrochemical giant Monsanto has received the lowest possible environmental and strategic management rating of a triple-C from Innovest Strategic Value Advisors, a global environmental and social investment research firm. Innovest's report, "Monsanto and Genetic Engineering: Risks to Investors," commissioned by Greenpeace, was released at a briefing at the Harvard Club in New York City this morning.

    The report, which comes just days before Monsanto's annual general meeting, warns shareholders and potential investors of Monsanto's "above average risk exposure and less sophisticated management than peers." Innovest analysts predict that "it [Monsanto] will likely under-perform in the market over the mid to long-term."

    Monsanto suffered $1.7 billion in losses in 2002 and has failed to open new markets for its controversial genetic engineered (GE) products. Yet Monsanto continues to pursue its unsound business strategy of betting on a speedy and widespread global acceptance of GE foods. Next in the Monsanto pipeline is GE wheat, which is being boycotted in key markets by farmers and food industry even before its approval.

    "While last year's profit losses led to a change in leadership at the company, they did not lead to a change in strategy. If Monsanto does not take steps to mitigate its substantial market risks, further investor losses are likely," said Frank Dixon, Managing Director at Innovest Strategic Value Advisors. "The risk of heavy financial losses due to genetic pollution or technology failure coupled with sustained market rejection of GE foods makes Monsanto a poor investment."

    In its assessment of Monsanto's key markets, Innovest underscores the lack of regulatory approval and stiff consumer opposition that continue to block the company's GE crops. GE products constitute one of the most widely rejected product groups ever, and major food importers such as China, Japan and Korea have recently followed the restrictive European approach. In the US, upwards of 90% of consumers now demand GE food to be labeled and many would reject GE food if given the choice.

    The Innovest analysis of the risks and liabilities associated with Monsanto's genetic engineering (GE) business pays special attention to the inevitability of GE contamination. Referring to the example of the StarLink corn contamination scandal in 2000, in which the company Aventis lost $1 billion, Innovest estimated Monsanto's potential financial fallout from a "StarLink scenario" to be $3.83 liability per share.

    "Monsanto's cash cow remains its agrochemical business, but last year's 24% drop in sales of Round-up and other non-selective herbicides has left the company vulnerable and increasingly desperate. Monsanto appears to be digging its own grave with its GE strategy," said global markets specialist with Greenpeace, Lindsay Keenan.