April 1, 2015

It has been widely expected by industry analysts that due to the drop in global corn acreage, Monsanto will post a decline in quarterly profits on March 31. While it is true that Monsanto posted a 34% drop in quarterly profits as a result of a reduction in corn acreage in South America and a change in the timing of some sales, the drop was less than what was feared by some analysts.

For the first quarter ending November 30, net sales fell to $2.9 billion from $3.1 billion a year earlier after corn seed and genetic trait sales fell by 12% to $928 million. However, soybean seeds and traits jumped 48% to $396 million. First quarter earnings fell to $243 million (.50 cents per share) from $368 million (.69 cents per share) a year earlier – although a decline, it is not nearly as sharp as the 50% decline some analysts were expecting.

In the current fiscal year, the company sees soybean products as a key factor in fueling profits, with emphasis on its new ‘Intacta RR2 PRO’ genetically engineered soybean designed to resist damaging worms being marketed in South America, as corn acreage in both the U.S. and globally are forecast to decline.

Because of the ongoing expectations of continued declines in corn acreage, Monsanto executives say that the company’s earnings will likely fall between 5% and 10% in the second quarter.

Monsanto is forging ahead however, with new products in the pipeline. The company is working on advancing its disease resistance traits, its new insect control products, and its farm data services. It is also rapidly expanding its development of microbial strains to increase yields in major crops, with research in 2014 showing some strains providing an increase of four bushels per acre in corn, and an increase of two bushels per acre in soybeans.

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