On May 25th I posted “Dow has long coveted Dupont’s (DD) seed business an the offer was an attempt to get it. Since that seems to have failed, could a Monsanto (MON) joint venture be coming? It would be a way for Dow (DOW) to get heavily into the seed business and provide Monsanto cheaper building blocks for its products” The answer is apparently ..YES.
Andrew Liveras announced this morning on CNBC that Dow’s (DOW) AgroScience Division and Monsanto (MON) have collaborated to create SmartStax™, the most complete yield protection ever made available in a corn hybrid It features eight different Dow AgroSciences and Monsanto herbicide tolerance and insect-protection genes and is expected to be available to corn growers by the end of the decade (next year and a half). The multi-gene product will protect the corn crop against above- and below-ground insects and also guards the crop from being damaged by certain weed control chemicals. It will be the only seed on the market with this level of protection.
Dow and Monsanto also reached a 10-year agreement to exchange lines of corn in the United States, which will allow the companies to create additional hybrid seeds. The agreement is particularly beneficial to Dow, which is a relatively small but rapidly growing player in the corn seed market. Dow AgroSciences head Jerome Peribere said, “As we do have small market share, this is aiming at boosting essentially our part of the hybrid market share,” said
Dow will generate new royalty income from the agreement and this provides an important platform for future business growth. SmartStax will be incorporated into new, higher-yielding hybrid seed combinations and Dow will stack it with the other cutting-edge trait technologies currently under development.
The world’s demand for is almost unquenchable currently. Any seed that provides additional yield for farmers will be hugely profitable for the farmer and is practically guaranteed success. Monsanto’s recent 71% earnings groth the last quarter ought to proof enough of that. By partnering with the #1 seed company, Monsanto, Dow has assured success with this venture.
Then Liveris did say something that made me laugh…”This agreement provides a further endorsement of our strategy: we’re being patient, we’re being disciplined and we’re investing in both organic opportunities and targeted acquisitions as we deliver on our commitment to become .a predictable, long-term earnings growth company.”
Why did I laugh, he could have said that for everything they have done the past year and a half… gotta love it
There is a call today at 10:30. I will post any additional notables..