Monsanto triples its profits by selling boatloads of herbicide and genetically modified corn.

[marmar]

from Grist Magazine's Gristmill blog:



Monsanto counts its cash
Seed-and-chemical giant sees its profit triple
Posted by Tom Philpott at 10:47 AM on 04 Jan 2008



In a gold rush, the firms that supply the gold diggers with tools -- not the gold diggers themselves -- make the highest and steadiest profits. That's a platitude, but it's also usually true. And it's now playing out in the boom in corn-based ethanol.

Don't waste much time envying corn farmers. Sure, they've seen the price of their product double over the past year and a half or so. But they've also seen their costs inch up. Fertilizer, land rents (much of the farmland in the midwest is rented), pesticides, and seeds -- all have risen since the corn rally. Before long, much-heralded "record farm income" in the corn belt will likely evaporate under those pressures.

As for ethanol producers -- the ones buying up all that corn and spinning it into auto fuel -- even they've seen their profits drop, despite heavy government support. They flooded the market with so much ethanol, so fast, that they overwhelmed it, leading to a glut. Helpfully, though, the federal government solved that problem, for a few years at least, with the 2007 Energy Act and its lofty ethanol mandate.

Corn farmers and even ethanol producers are pikers compared to the input suppliers -- the firms that peddle the special seeds and chemicals required for industrial-scale agriculture. And the granddaddy of all those firms, the genetically modified seed and herbicide giant Monsanto, just delivered what's known on Wall Street as a "blowout" quarterly profit report.

In the three-month period that ended Nov. 30, Monsanto reeled in profit of $256 million. That's nearly three times the amount it made in the same period of a year earlier, and well more than Wall Street analysts had expected. Monsanto shares, which more than doubled in value over the course of 2007, leapt more than 9 percent in Thursday afternoon trading on the news. ......(more)

The complete piece is at: http://gristmill.grist.org/story/2008/1/3/111624/1377