Monsanto Co. (MON) expects improved margins for its seed and genomics segment in 2011 even after rolling back prices, the company’s chief financial officer said Wednesday.
The St. Louis-based seed producer cut prices for its top corn seed coming into 2011 in response to a farmer backlash on pricing and uncertainty about yield performance. Still, margins were flat and should end up higher overall for the year, Chief Financial Officer Pierre Courduroux said in a conference call following second-quarter earnings.
“We see that as a very positive signal that our mix strategy is working,” he said.
Meanwhile, prices for its top soybean seed, Roundup Ready 2 Yield, have remained strong, with no late-season discounts, Chief Executive Hugh Grant said.
Monsanto, along with companies throughout the agriculture industry, have enjoyed increased sales and earnings due to soaring commodity prices and a strong farm economy.
But Grant said the company’s ability to improve its pricing will depend on innovation and new products, rather than volatile crop prices, he said.
“We are not a fertilizer stock, and we need to price for the demonstrated value on the farm,” he said.
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