The established Roundup Ready soybeans have achieved a US market penetration of some 95% in recent years Photo: Monsanto

The strong start to the year has allowed Monsanto to raise its earnings guidance for fiscal 2008 to the "upper end" of its earlier forecast of $2.20-2.40/share (Agrow No 530, pp 3-4). Mr Grant revealed the new guidance at Monsanto's biennial investor meeting, where executives outlined growth plans for the next five years. "Backed by the growing demand for our seed and trait products, our business is poised for significant organic growth between now and the end of 2012," Mr Grant said.

Monsanto executives outlined plans to double the company's gross profit over the next five years, representing earnings per share growth in the "mid to high teens". A projected gross profit of $3,500 million for Monsanto's seed and trait business in fiscal 2008 is expected to reach $6,500-7,000 million by 2012, while gross profit for the agricultural productivity segment should edge up from $1,300 million to $1,550 million over the same period.

Key drivers of growth over this period will be the introduction of two "blockbuster" products: second-generation glyphosate-tolerant Roundup RReady2Yield soybeans; and the eight-gene multiple insect-resistant SmartStax maize, which is being jointly developed with Dow AgroSciences (Agrow No 528, p 2). Over the longer term, the company points to six blockbusters with sales in the $300-500 million range by 2020. It is also developing a "mega blockbuster" higher yielding maize family with potential sales of over $1,000 million. Monsanto's pipeline products should yield additional sales of some $5,000 million by 2020, Mr Grant pointed out.

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Monsanto expects to make a limited introduction of Roundup RReady2Yield soybeans on some 1-2 million acres (400,000-800,000 ha) in the US in 2009, with a full-scale launch on 5-6 million acres in 2010. This would be three times greater than any of Monsanto's previous GM crop launches, Mr Grant said. The product will serve as the platform for up to five new stacked trait offerings by 2012, he added.

The established Roundup Ready soybeans have achieved a US market penetration of some 95% in recent years. With 61 million acres of Roundup Ready soybeans planted in the US this year, the company points to a potential market of 60-70 million acres in 2010. Assuming that competitor brands will be planted on 20 million acres, this leaves a 40-50 million acre market for Roundup RReady2Yield soybeans, according to Brett Begemann, vice-president of Monsanto's global commercial business.

Roundup Ready soybeans achieved a 50% market share in Brazil this year and Monsanto expects 95% penetration by 2010. The company is developing twin-trait Roundup RReady2Yield soybeans with a Bt insect resistance gene specifically for the Brazilian market (Agrow No 529, p 1). The insect resistance trait should boost yields by more than 4% and eliminate two insecticide applications costing $5.70/acre ($14/ha), Monsanto points out. Tests with US germplasm point to further yield gains of 7-11% from the Roundup RReady2Yield trait.

Growth plans for Monsanto's maize business centre on expanding the US penetration of triple-trait lines with glyphosate tolerance and corn borer (Ostrinia nubilalis) and corn rootworm (Diabrotica spp) resistance, and transitioning to SmartStax in 2010. The company's DeKalb maize brand gained four percentage points of US market share this year (Agrow ibid). It has achieved the 2010 target of a 23% share three years early, executive vice-president of strategy and operations Carl Casale pointed out. Monsanto is targeting further market share gains of one or two percentage points per year, with a goal of 28-32% market share by 2012.

Monsanto expects potential US plantings of triple-stack maize to rise from 17.7 million acres in 2007 to 45-55 million acres by 2010. At that point, the company aims to achieve a transition to SmartStax, which is said to have a potential US market size of 60-65 million acres. Growers will benefit from improved control of above- and below-ground pests, along with reduced refuge requirements because of lower risks of resistance from multiple genes, Mr Casale said.

The wide range of maize pests in Argentina and Brazil make these markets particularly suited to SmartStax (Agrow ibid). Monsanto projects a 5-7 million acre market in Argentina and a 15-20 million acre market in Brazil. A potential 15-20 million acre market in the EU and a further 5-6 million acres in India could bring the overall market for SmartStax to over 100 million acres.

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The international roll-out of SmartStax will not follow the same pattern as in the US, Mr Casale pointed out. As approvals for first-generation GM maize products are still awaited in some of these markets, growers may be able to go straight to SmartStax rather than waiting for dual- and triple-trait lines.

This leapfrogging of technology steps will also be seen in the Indian cotton market. Monsanto does not plan to introduce Roundup Ready cotton in India, but will jump straight to the introduction of second-generation Roundup Ready Flex in combination with insect-resistant Bollgard II lines (Agrow ibid). The potential market for this product is put at 15-20 million acres.

The expansion of Roundup Ready Flex in the US is an important part of Monsanto's growth plans for its cotton business. It is also seeking to reverse the market share losses of US cotton seed company Delta and Pine Land (D&PL), which Monsanto acquired this year (Agrow No 521, p 1). Only 17% of D&PL's cotton seed sales included second-generation traits this year, compared with an industry average of 41%. Monsanto aims to fully convert the D&PL range from Bollgard I to Bollgard II by 2010 and to switch from Roundup Ready to Roundup Ready Flex by 2012.

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