Deep pockets: With cash reserves, is Monsanto eying a deal?
(St. Louis Business Journal)
“Kirk McDonald, a senior research analyst with Argent Capital Management in Clayton, said the company could also see significant growth in soybean seed sales from South American markets, including Brazil and Argentina.”
September 12, 2014 (Ben Unglesbee)
Even with corn prices in freefall, Monsanto Co. has big plans for growth in the coming years. Working against the agrochemical and biotech company could be its own quest to improve farmers’ yields. And some think Monsanto, which reported 2013 revenue of $14.86 billion, could also be planning to grow another way — by using its large cash reserves to make an acquisition.
In an August presentation to investors,Monsanto CEO Hugh Grant said the company expects yield gains for soybeans to account for 85 percent of crop production increases in the next five years. By developing products that increase crop yield for farmers, Monsanto also faces a paradox. As Muir points out, when yields increase, it ultimately drives down the prices for crops and, with them, seeds. But falling corn prices haven’t stopped Monsanto from increasing seed prices for the next growing season. In August, Monsanto told the Wall Street Journal it would increase prices, as it does each year, typically by 5 percent to 10 percent.