The U.S. Agriculture Department recently approved Monsanto Company’s (MON) genetically engineered, drought resistant corn, clearing the variety for sale. USDA approved the variety after reviewing environmental and risk assessments and deregulated the same. Monsanto filed a petition with the agriculture department for approval of its GM variety, way back in 2009.
As per USDA, the variety, named MON 87460, will no longer be considered as a regulated article under the department’s regulations, governing the introduction of certain genetically engineered organisms.
Corn is the most widely grown U.S. crop and U.S data shows that the farmers grew 91.9 million acres of the feed grain in 2011, the second-largest area since the Second World War. However, Monsanto revealed that 40% of crop losses in North America are due to sub-optimal moisture. Monsanto’s drought-tolerant trait, crafted in collaboration with the German chemical company BASF is expected to reduce such wastage and mitigate the risk of yield loss, primarily in the areas under annual drought stress.
Monsanto estimated that the major area for adoption of drought-tolerant corn would be the plains in the US, already producing one-quarter of the crop. Similarly, dry-land regions of Africa, Europe and Latin America are also under target by the agribusiness giant. Monsanto has planned farm trials in the western U.S. plains in 2012 to demonstrate the variety for growers. The trial will also help to generate production data that will help to guide Monsanto's commercial decisions and is expected to strengthen business going forward.
Moreover, for 2012, the company has also lined up a series of new and exclusive products as part of the Advanced Breeding Program. Industry leading, DEKALB is getting ready for a full launch of Genuity® SmartStax® RIB Complete™ and Genuity® VT Double PRO® RIB Complete™ blended corn products in 2012.
Monsanto Company is a leading global provider of agricultural products for farmers, operating in Seeds and Genomics and Agricultural Productivity segments. Monsanto’s biotechnology research and innovations position it as a market leader above its peers, viz, Syngenta AG (SYT), The Scotts Miracle-Gro Co (SMG), The Dow Chemical Company (DOW) and BASF SE.
We currently maintain a long-term Outperform recommendation on the stock.
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