Monsanto continues return to growth in fiscal year 2017
The Seeds and Genomics segment
Net sales for the Seeds and Genomics segment in the second quarter of fiscal 2017 were approximately $4.2 billion, contributing to the first half total of $6.0 billion.
In corn, quarterly growth came mainly from the U.S., Europe and Brazil. U.S. corn growth related primarily to improved cost of goods sold with the return of a more normalized production plan, while Europe and the U.S. combined had a volume timing benefit of roughly $40 million, stemming from strong grower demand. Brazil's double-digit price mix lift in local currency continued in the second quarter, and the company has garnered strong demand for its VT Triple PRO traited hybrids. In Argentina, the company is estimating even greater acreage growth than previously expected, at more than 40 percent.
For soybeans, the company expects to deliver greater than 25 percent growth in global soybean gross profit. U.S. state approvals are now in place for the key soybean-growing states Monsanto is seeking for Xtendimax Herbicide with VaporGrip Technology, with the exception of Arkansas. The EPA recently approved numerous tank mixes for the chemistry, including glyphosate. With these approvals, as well as strong seed supply, the company now expects 18 million acres of Roundup Ready 2 Xtend soybean varieties to be planted in the U.S. in fiscal year 2017. In South America, the performance of INTACTA RR2 PROTM soybeans continues to demonstrate the advantage over competing varieties, adding to the company’s confidence in the 45 million to 55 million acre range for the technology in fiscal year 2017.
Monsanto also continues to see high grower demand for Bollgard II XtendFlex cotton, which is now expected to exceed four million U.S. acres in fiscal year 2017. Overall, cotton gross profit is expected to grow by more than 35 percent, with the strength of Bollgard II XtendFlex in the U.S. and the return of high-value acres in Australia.
Monsanto also continues to enhance its digital tools for agriculture, with acreage expansions for the Climate FieldView platform, and remains on track to deliver 25 million paid acres this fiscal year. Geographically, experience with the platform is growing in the U.S., Europe, Canada and Brazil and interest in joining the Climate FieldView platform has been strong, and Climate is currently in discussions with more than 25 potential technology providers.