Monsanto looking to large farms in Brazil, Argentina to keep hold of GM market in Latin America, as countries provide some of largest growth opportunities in upcoming years, CEO says
December 22, 2011
– The large farms of Brazil and Argentina have established themselves as a key battleground for Monsanto Co. as the company looks to keep its hold on the market of genetically modified seeds in Latin America, Dow Jones Newswires reported Dec. 22.
Latin America is increasing in significance for Monsanto and rival companies including DuPont Co. and Syngenta AG, as markets outside the U.S. will outpace domestic growth of Monsanto’s GMO seeds for the first time during this crop season.
Monsanto expects Latin America to be a site of momentum acceleration in 2012, with corn opportunity in Brazil and Argentina to increase and become one of the largest growth possibilities in upcoming years, the company’s Chief Executive Hugh Grant said in a Dec. 7 earnings call.
There is still a large amount of land available for crop production in Brazil and Argentina, unlike the U.S., and combined with Monsanto’s position in the biotech seed market in South America, the company is in good position for earnings growth, according to Susquehanna Financial Group LLLP analyst Don Carson.
Benefits of GMO seeds such as insect and herbicide resistance have resulted in increased usage by farmers in the South American nations. Since approving corn biotech traits for planting in 2009, GMO penetration in Brazil is already greater than 60%.
Monsanto has more than 40% of the GMO seed market in Brazil, and more than half of the market in Argentina. The company’s sales to Argentina accounted for slightly over US$600 million out of its US$10.5 billion in seed sales last year.
The primary source of this article is Dow Jones Newswires, New York, New York, on Dec. 22, 2011.