Monsanto Chief Executive Hugh Grant said this week that the federal investigation into anticompetitive practices in the seed industry "is the result of the fact that we have grown quickly and have been very succcessful."
"I feel good that from Day 1, in 1996, we have broadly licensed our technology to everybody who wanted it," Grant said at the Bank of America/Merrill Lynch global markets conference in New York City. "I think we would have had a different conversation had we not done that."
The U.S. departments of agriculture and justice have announced a general investigation of competition in agriculture. A government-conducted workshop focused on the seed industry is planned for March 12 in Ankeny, Iowa.
Monsanto has about one-third of the U.S. corn and soybean seed sales markets and is generally even with rival Pioneer Hi-Bred of Johnston, Iowa, in market share. But Monsanto is believed to be far ahead in the market for licensed biotechnology traits for seeds.
Pioneer Hi-Bred filed an antitrust lawsuit against Monsanto last summer, and its attorneys have drawn a parallel to the Justice Department's case a decade ago against Microsoft. The software company was accused of using its Windows platform to stifle competition.
Monsanto is using the popularity of its Roundup herbicide to compel seed companies to use Monsanto-licensed technology in their seeds, Pioneer's attorneys say.
Grant told investors that Monsanto is banking on what he called the company's "game-changing" technologies, SmartStax corn seeds and the newest generation of Roundup Ready 2 Yield soybeans, for the 2010 season.
SmartStax will be available for about 4 million acres in the 2010 season with full availability by 2012. The new Roundup Ready soybeans, which were introduced for the 2009 crop year, will be available for about 8 million acres in 2010.
SmartStax has biotech traits that enable farmers to reduce their refuge acreage from the current 20% to 5%. The refuge acreage helps prevent insects from mutating into varieties resistant to seed traits or insecticides.
Ted Crosbie, Monsanto's director of breeding, says limited use of Monsanto's Roundup Ready 2 Yield soybeans in the 2009 crop year showed test yield gains of up to 7% compared with previous generations of soybean seeds.
Pioneer hopes to be in the field by the 2010 planting season with its AcreMax corn, which also would allow reduced refuge acreage.
Pioneer said this week the company is still negotiating with the Environmental Protection Agency about how much reduction in refuge would be allowed by AcreMax.
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