St. Louis, Missouri
July 14, 2009
Monsanto Company (NYSE: MON) announced today it is expanding
its strong seeds and traits portfolio to include wheat. The
company has acquired the assets of
WestBred, LLC, a
Montana-based company that specializes in wheat germplasm, the
crop's seed genetic material. The investment will bolster the
future growth of Monsanto's seeds and traits platform and allow
farmers to benefit from the company's experience in drought-,
disease- and pest-tolerance innovations.
"The U.S. wheat industry has come together to call for new
technology investment, and we believe we have game-changing
technologies - like our drought-tolerance and improved-yield
traits - that can meaningfully address major challenges wheat
growers face every season," said Carl Casale, executive vice
president of global strategy and operations for Monsanto.
"Through WestBred, we'll be able to deliver advances in breeding
and biotechnology to deliver a step-change in yield while
creating a springboard for new partnerships and collaboration
opportunities that create additional value for farmers."
WestBred, owned indirectly by Barkley Seed, Inc., is a premier
private wheat germplasm company in the United States, with
germplasm assets in all classes of wheat. WestBred's existing
breeding capabilities and commercial operations will become the
centerpiece of Monsanto's wheat platform. In addition, Monsanto
will seek public and private partnerships that can help deliver
on the promise of technology improvements in wheat for farmers.
"This is a tremendous opportunity for the grain industry," said
Robby Barkley, president and CEO, Barkley Seed, Inc. "The
combined resources of Monsanto and WestBred will support the
development of new technology and traits that can benefit many."
"As WestBred looked at the wheat industry, we saw a need for
technology infusion to be competitive with other crops farmers
are growing," said Ron Ueland, president of WestBred. "We
believe that linking up with a company like Monsanto with a
proven track record as an innovator is the best route to
accelerate the development of new technologies."
Because the $45 million acquisition represents a long-term
investment in research and development and breeding, the company
does not expect the acquisition to be accretive to earnings
until the middle to latter part of the next decade.
Wheat Technology Platform
Through its technologies, Monsanto sees an opportunity to
bolster the sustainability of wheat by helping wheat farmers
improve yields while reducing the use of input resources, such
as water, land and energy. The transaction will give WestBred
access to Monsanto's technology platforms to provide wheat
farmers benefits through both breeding and biotechnology.
Researchers will be able to apply Monsanto's expertise in
conventional and marker-assisted breeding tools to develop
better-yielding varieties for U.S. farmers using WestBred's
germplasm as a foundation. These seeds will serve as the
foundation for the development of new biotechnology traits,
which will initially focus on drought tolerance, nitrogen use
and higher yield. Biotechnology will be a longer-term prospect,
consistent with the company's 8-to-10 year development cycle.
Monsanto will also explore herbicide-tolerance and
disease-resistance opportunities to meet wheat farmers' needs,
but the company's plans do not include further development of
the first-generation Roundup Ready® trait in wheat.
"The capabilities we've built in both breeding and biotechnology
for our core crops are highly transferable to wheat, providing a
significant jumpstart to our wheat technology platform," said
Casale. "Given the geographies where wheat is grown, it is a
crop particularly challenged by the core issues of water
availability and fertilizer efficiency. We believe we have the
technology tools today to help wheat farmers meaningfully
address these challenges and help create a safe, affordable
supply of wheat."
Involving the Wheat Industry
Monsanto also announced that, as part of its investment in the
wheat platform, it will form a Wheat Development Advisory Group
to help the company as it works to develop and apply new
technology for wheat. Initially, the group will be made up of
representatives throughout the wheat value chain, who will
provide the company feedback on proposed traits and attributes
that are needed to improve the productivity and sustainability
of wheat production.
Additional details about today's announcement can be found at
www.monsanto.com/wheat.
WestBred, LLC is a premier research and development company
for cereal grains in North America. WestBred, LLC combines a
rich tradition of growing experience with leading-edge
technologies to create and breed the finest cereal grain
varieties available today. These licensed varieties are marketed
through a network of associate seed companies located throughout
North America.
Monsanto Company is a leading global provider of
technology-based solutions and agricultural products that
improve farm productivity and food quality. Monsanto remains
focused on enabling both small-holder and large-scale farmers to
produce more from their land while conserving more of our
world's natural resources such as water and energy.
Roundup Ready® is a registered trademark of Monsanto Technology,
LLC. |
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Demand for wheat continues
to rise. Since 1994, world
consumption of wheat has risen
more than 18 percent and has
risen year-over-year in 15 of
the last 18 years. (FAS)
Wheat yields are expected to
only rise 0.3 %/acre each year
over the next 10 years,
according to the USDA’s Wheat
Outlook. Corn yields are
expected to rise 2 %/acre. (ERS)
In 2007, global wheat
stock-to-use ratio sunk to the
lowest level on record: 70 days
of supply. (FAS)
U.S. wheat acreage declined from
a high of 88 million acres in
1981 to a low of 57.2 in 2005.
In 2009, the estimated wheat
acreage is 59.7 million acres. (NASS)
Wheat is planted
on more than
555 million acres
worldwide,
making it the largest crop
planted by farmers in the world. |
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