As a technology company with strong cash generation, Monsanto has the opportunity to invest in growth areas for agriculture, says Executive Vice President of Strategy and Operations, Carl Casale.

As part of his presentation to Morgan Stanley Basic Materials Conference 2008 in New York, Casale announced that Monsanto is establishing a global seed treatment platform. The company has entered into separate agreements with Becker Underwood and Plant Health Care Inc., as novel components of the platform for delivering proprietary seed treatments for corn, soybeans and cotton.

The global platform is a natural complement to the company’s seed strategy and yield-enhancing technology pioneered by Monsanto through biotechnology and breeding, as well as its collaborative approach to new technologies, Casale says.

“As we develop our seed-treatment platform, we’re planning to stake a leading position in an underserved, but emerging category and to enter into a variety of licensing and supply agreements,” Casale said. “Seed treatments are the next step in yield protection and delivery, and represent a high-margin global opportunity.”

The global seed treatment industry generates annual sales of greater than $1.5 billion, with almost $900 million in the crops key to Monsanto’s business. Currently, Monsanto treats more than 1 billion pounds of seed each year and sees the potential to expand treatment to new crops and new geographies, Casale said.

“The realizable yield in seeds is so valuable to farmers that seed treatments are the next logical complement to further protect yield created by advanced breeding and biotech traits,” said Casale.

New Traits Deserve New Seed Treatment

Monsanto plans to begin offering seed treatments as early as the 2009 season.

In 2009, Monsanto plans to treat all Roundup Ready 2 Yield soybeans with a proprietary treatment. Today less than 25 percent of soybean seeds sold in the United States are treated.

In 2010, Monsanto plans to have a proprietary seed treatment for the launch of its SmartStax corn product.

In 2011, Monsanto plans to have a proprietary seed treatment solution for its Deltapine cotton genetics portfolio.

The agreement between Monsanto and Becker Underwood is focused on evaluating a biological seed treatment aimed at helping soybeans improve both their nitrogen fixation ability and overall plant performance.

Monsanto is also working with Plant Health Care Inc. to develop and commercialize a novel seed-based solution for nematodes, a plant parasite that can severely limit crop yields around the world in crops such as corn, soybeans, cotton and vegetables.

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