Monsanto Co. signaled that it will lower some seed prices due to resistance from farmers to recent price increases. The company adds that it will back off its long-range proft goals after realizing a 19% drop in fiscal second quarter earnings.

Hugh Grant, chief executive for Monsanto, told Wall Street analysts this week that the company is "operating in a very dynamic and competitive environment," which is trumping the company's recent assertions that its superior genetically modified seeds would allow it to charge premium prices for seed.

According to the Wall Street Journal report, the company's new pricing strategy suggests that Monsanto may be willing to cut prices of genetically modified corn, soybean and cotton seed to gain market share.

The seed-pricing shift, plus stronger-than-expected generic competition for its glyphosate business, has caused the company to drop its goal of doubling gross profit between 2007 and 2012.

Carl Casale, financial chief for Monsanto, says U.S. farmers bought enough of its new SmartStax corn seed to plant 3 million acres instead of the 4 million forecast by the company. Likewise, 6 million acres' worth of Roundup Ready 2 Yield soybean seed was purchased, below the company's expectations of 8 to 10 million acres. Monsanto had targeted a price of about $74 per acre for its second-generation Roundup Ready soybean seed, which was 42% more than its first generation.

Declines in commodity grain prices during the past 18 months are making farmers more resistant to paying higher seed costs. In addition, the Wall Street Journal report says that Pioneer Hi-Bred has begun to regain some of the business it had lost in the past decade.