KUNC

         

Tossed Out

Biotech giants like Monsanto cash in

U.S. farmers grow billions of dollars worth of soybeans each year, helping fuel profits for large biotech companies. (Big Grey Mare/Flickr)
U.S. farmers grow billions of dollars worth of soybeans each year, helping fuel profits for large biotech companies. (Big Grey Mare/Flickr)

Ag giant Monsanto earned over $1 billion last quarter, thanks largely to farmer fears of continued drought and strong sales to the emerging Latin American ag market.

The Missouri-based company’s strong earnings announcement Wednesday comes on the heels of a landmark legal settlement with rival (and fellow Midwest biotech behemoth) DuPoint Pioneer, which will see DuPont pay Monsanto $1.75 billion in soybean seed licensing fees over the next decade.

Monsanto, DuPont and other biotech companies are looking for growth in Latin America, as farmers from Brazil and Argentina in particular grow their operations and continue to leverage some of the technological advancements that U.S. farmers have been employing for decades, as Marketplace’s Mark Garrison reported:

The company's recent strong performance opens a window into the explosive technological growth in Latin American agriculture. The biotech farm supplier has cashed in selling its genetically engineered seeds and other products to farmers there.

That’s not to say the old image of the Latin American subsistence farmer is dead. But it’s dated. Big, high-tech farms are rising all over the region and changing the face of Latin farming, especially in Brazil and Argentina.

Poor conditions in the Midwest during last year’s growing season, and fears that prospects look similar this year, drove up demand for biotech products. Farmers facing tough natural conditions looked for any possible edge, like using Monsanto’s Roundup Ready soybean seeds which are resistant to the company’s Roundup glyphosate herbicide.

Monsanto is seemingly always in the news, whether for a Supreme Court case about its planting guidelines or for its involvement in government and lobbying. Critics of the biotech industry argue that companies like DuPont Pioneer and Monsanto have become too powerful. By some estimates, the two companies control about two-thirds of North American corn and soybean sales, so their products are certainly popular with farmers.

E.I. du Pont de Nemours and Company, DuPont Pioneer’s parent company, is expected to release its earnings report on April 23. The earnings report released by Monsanto, the company’s second quarter report, is crucial, as it includes most sales for the North American growing season. It accounts for half of the company’s profit, according to the Financial Times. The $1.75 billion in 2013 earnings beats last year’s $1.21 billion in earnings.