permaculture

["Lawrence F. London, Jr." <lflj@intrex.net>]

http://www.agbios.com/main.php?action=ShowNewsItem&id=9425

Farmers Feeling Roundup Spike
Author: Jane Roberts
Publication: Memphis Commercial Appeal
Date: Tuesday, April 01, 2008
A decade after Monsanto introduced bio-engineered seed that made
crops immune to Roundup -- and revolutionized farming -- the price of
the herbicide in the last year has doubled.

The savvy began noticing the run-up last fall. By then Monsanto had
instituted two price hikes, and Nos. 3 and 4 were on the way.

Bring up the topic in any feed store, and the theories run wide as a turn-row.

"All the farmers that use Roundup are trying to buy it," said Rex
Manning, who buys chemicals and fertilizer for Stoneville experiment
station in Mississippi. "I heard one fellow was trying to buy 1,000
gallons, and they wouldn't sell it to him. They told him they had to
wait to see what the final price was going to be."

Others, including Buck Darnell at DeSoto County Co-op in Hernando,
think it's possible the supply of Roundup could dry up altogether
this year. Every time he gets a new shipment, the price goes up.

In a part of the country where more than 95 percent of cotton and
soybean farmers pay extra for seed engineered to withstand the
herbicide, rising prices are quickly noticed.

Monsanto and others say the run-up is the result of quickly a
changing world standard of living. As people in developing nations
increase the amount of protein in their diets, and the amount of
fossil fuels needed to produce it, the price of fertilizer and many
other agricultural inputs will rise.

In some world markets, including Brazil and Argentina, Roundup is
selling for more than it does in the U.S., creating a lucrative
market for Monsanto and its 30-some other competitors, which are
mostly in China.

"China is going after the highest revenue price they can get on the
product," said Kevin Eblen, resident of Monsanto's Delta and Pine
Land division.

Monsanto is funneling 25 percent more product to U.S. market to cover
the gap, without increasing production, although Eblen said Monsanto
is seriously considering adding capacity to its two U.S. Roundup
production plants.

The shortage is creating price spikes.

"We've openly said our price to distributors is two times as a high
as it was in April a year ago," Eblen said.

On Sept. 15, 30 gallons of Roundup Weathermax cost $1,570.50. On
March 1, the same product was going for $2,409, according to Robert
Hayes, superintendent of the Jackson Experiment Station.

"Co-ops and distributors are reluctant to talk about price because it
depends on how good a customer you are. They don't all pay the same
price, and if you prepay, you're get a better deal," he said.

Since February, when Monsanto instituted its last price hike, Eblen's
been on the lecture circuit, helping farmers understand the ticklish
position the company is in, he said.

"We feel first and foremost that we have to cover the Roundup Ready
acres with our product," he said. "The only real ability we had to do
that -- with generics raising their prices -- was to follow with a
big price increase of our own.

"It's an uncomfortable thing. Farmers don't like it, but they tend to
understand the position we're in."

In some places, generic brands are still selling for more than
Roundup, fueling rumors that Monsanto does not have enough glyphosate
to cover its own label brand and supply the raw ingredient to generic
labels.

A Monsanto spokeswoman would not comment on those contracts or
whether the contract amount had changed.

Last week, Monsanto upgraded guidance for the second quarter, largely
due to the spike in Roundup sales internationally. It expects
Roundup's net profit to be $1.7-$1.8 billion this year, more than
double last year's sales. Monsanto will announce earnings on
Wednesday.

Monsanto introduced bioengineered seed in 1995, creating a cotton
plant that was immune to the bollworm. By implanting the traits in
the seed germplasm, the plant is genetically altered to be immune to
pests.

It introduced its first Roundup Ready seeds in 1997. The plant that
grew from that seed was immune to Roundup, allowing farmers to use
Roundup after the crop was up, killing the weeds, but not the crop.
The break-though saves them thousands in tilling and chemical costs.

Last year, Monsanto's genetically altered crops were planted on 137.8
million acres in the United States, up 5 percent from 2006.

Its traits are used in 95 percent of the U.S. soybean acres and 90 to
95 percent of the U.S. cotton acreage and a growing percentage of
corn acreage.