The launch of Monsanto's new eight-trait, Smartstax transgenic corn seed line has been challenging, a Monsanto executive told Wall Street analysts Wednesday.
Monsanto is introducing the newest-generation biotech corn this year on about 4 million of the 85 million acres of corn planted in the United States, with a plan of expansion in 2011 and 2012.
Brett Begemann, executive vice president for seeds and traits, said the introduction of the relatively high-priced corn hasn't been easy. He said the new product is competing against Monsanto's other triple-stack corn lines sold primarily through its DeKalb, Kruger, Fontanelle's and Holden's subsidiaries.
"Has this been more challenging than we anticipated?" he said at Goldman Sachs' biotech seed forum in New York. "Yes, it has. But I still feel good about where we'll be in the next two years."
Monsanto is alone in the market with the reduced refuge corn seed lines. The Environmental Protection Agency requires farmers to set aside 20 percent of their fields as a pest refuge, planted with corn not genetically engineered to kill insects so that the insects won't mutate into a trait-resistant variety.
Monsanto's Smartstax has won approval for reduction to 5 percent refuge. Rival Pioneer Hi-Bred is awaiting approval for its Acremax corn seed, which would reduce refuge by an unspecified amount and also introduce a concept that eliminates the refuge altogether.
The companies together employ about 3,500 in Iowa.
"We're waiting patiently, or maybe not so patiently, for EPA approval," said Jim Borel, vice president of DuPont, which owns Pioneer Hi-Bred of Johnston.
Borel said he expects Pioneer to continue its momentum from last year, when it picked up corn and soybean market share from Monsanto for the first time in a decade.
He said that instead of emphasizing new biotech products, Pioneer is selling what he calls its superior germplasm, the basic stuff of the hybrid seed rather than its genetic traits.
Borel added, referring to Monsanto's Smartstax, "The 5 percent refuge is not a solution for farmers."
Borel also said "success isn't just one product or region, but farm productivity. Farmers are not interested in paying for something that doesn't give economic return."
Neither Borel nor Begemann discussed the pending antitrust investigation of the seed industry, the subject of a March 12 hearing in Ankeny and a federal lawsuit in St. Louis filed by Pioneer against Monsanto.
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