E-mail this article to
yourself or a friend.
Enter address:


Monsanto biotech corn nears a regulatory nod

(Thursday, Sept. 5, 2002 -- CropChoice news) --

BYLINE: Rachel Melcer Of The St. Louis Post-Dispatch

Monsanto Co. is in the home stretch of regulatory approval for a new seed that could handle two pests at once: the corn rootworm and the Wall Street skeptics who wonder whether the newly independent company's biotechnology and market reach are beginning to play out.

The seed, which will be called YieldGard Rootworm Corn if it gets the nod for commercialization, was the subject of a three-day hearing last week by the Environmental Protection Agency's Scientific Advisory Panel. If the panel's recommendation -- expected in a few weeks -- is favorable for Monsanto, the seed will be one last step away from hitting the shelves. The company hopes final approval will come in time for spring planting. Monsanto runs this regulatory race each time it develops a new genetically modified seed or pesticide for U.S. farmers. But this time, the stakes are higher.

The rootworm corn seed is the first product introduced by the agricultural biotech industry in three years that attacks a new problem, rather than simply building on existing products. So, it opens up new market potential, spokesman Bryan Hurley said. With 90 percent of the U.S. biotech crop market under its belt and challenges to expansion abroad, Monsanto needs to create new opportunities to grow. And the company says it is about two to three years ahead of the competition with this type of product.

"It establishes that biotech has not plateaued here, that we are increasing and growing the market for our technology," said Eric Sachs, Monsanto's director of scientific affairs for North America.

YieldGard Rootworm Corn also is the first Monsanto product to be up for approval since the company's split Aug. 13 from Pharmacia Corp., which had owned 84 percent of Monsanto stock. Monsanto has been working hard to persuade the Pharmacia Corp. shareholders whose interest is in the pharmaceutical industry to hang on to the Monsanto stock they received as part of the deal. Failing that, the company needs to attract new investors to pick up the shares that are being sold.

"In the next six months, (Monsanto) will basically re-emerge and rebuild their credibility with the investment community," said John Moten, chemicals analyst and vice president with Deutsche Bank Securities Inc. in New York. "When I look at the company's leadership position and the markets that they can penetrate, they are really in a good position ... and this (corn rootworm) product further strengthens it."

Yet, Moten sees three factors as crucial to Monsanto's success: wider global acceptance of biotech crops, which largely have been rejected by the European Union; maintenance of pesticide market share now that its premier product, Roundup, is no longer patent protected in the United States; and development of new products such as YieldGard Rootworm Corn.

Monsanto's chief executive, Hendrik Verfaillie, has said launching the rootworm corn product is among the company's top three priorities this year. Monsanto is betting big research and development dollars on biotech crops, which are expected to outpace Roundup sales as a source of gross profit by 2004.

Farmers, too, are eagerly awaiting an alternative way to attack rootworm. The pest costs hundreds of millions of dollars each year in pesticides and lost crops, said Tom Slunecka, director of development for the St. Louis-based National Corn Growers Association.

"For those producers that have rootworm problems, it's their No. 1 pest issue," he said.

Last year, 7.8 million pounds of pesticides were applied to 14.2 million acres of U.S. corn at a cost of $172 million, according to Doane Marketing Research Inc.

Farmers are concerned with the cost, the environmental damage and the health hazards of using pesticides, Slunecka said. But the alternative approach - rotating plantings of corn and soy to interrupt the growth cycle of the corn-dwelling rootworm - is becoming less effective as the rootworm adapts with its every-other-year growth pattern.

YieldGard Corn Rootworm is a genetically modified seed that contains a protein that kills rootworm when ingested. Monsanto has conducted several studies - presented to the EPA last week - showing that it has no measurable effect on other organisms.

Monsanto scientists estimate that as rotating crops fails as a solution and the rootworm spreads geographically across the country, the eventual market for YieldGard Rootworm Corn will reach 47 million U.S. acres.

Monsanto is prepared to sell enough YieldGard Rootworm Corn to plant 1 million acres in the spring.

"We obviously need to get approval, and it's going to take a little while for it to ramp up to scale in the marketplace," said Carl Casale, vice president in charge of North American operations. "But we believe it w ill be a significant product for us."


Reporter Rachel Melcer: E-mail: rmelcer@post-dispatch.com
Phone: 314-340-8394

Related item:
Roundup-resistant weeds add to Monsanto's quotient of woe; http://www.cropchoice.com/leadstry.asp?recid=877