Summary
A recent article conveys that Monsanto, the largest seed-seller in the world has made an immense profit off of seed selling in the past year. Earnings have increased from $ 1.5 billion to $1.7 billion in that duration of time. In order for this growth to continue, Monsanto has to consistently keep up productivity in current markets and open new markets as well. The opening of new markets could be a catastrophe considering that multiple countries have prohibited the utilization of genetically modified crops. The two segments that Monsanto focuses on the most are agricultural productivity, and seeds and genomics. With this, Monsanto’s plan is to eliminate the usage of agricultural products and focus on what they call the more promising margins possible in the seed business. They started by ending the patent for their smash-hit herbicide Roundup which was a huge historical growth driver. The Roundup seed business did prosper, but in order for it to have done so, farmers and gardeners needed Roundup-resistant seeds for crops such as corn, soy, and cotton. So far this shift has been a success due to the fact that Monsanto’s seeds and genomics segment comprised almost 80% of its sales versus 70% the year before. While virulent insects are a disaster for farmers, they happen to be beneficial for Monsanto. For example, a caterpillar whose origin is Asia is causing harm to Brazilian soy and cotton farmers. This has convinced Monsanto’s management to consider this their “biggest milestone.” The caterpillar epidemic has influenced the Brazilian government to put its country on “red alert” and port inspections are increasing. To Monsanto’s benefit, they have an expensive soybean that this laced with a protein from a virus that immediately kills the caterpillar. This is considered the biggest launch in Monsanto’s history and they are now selling the genetically tweaked cotton seeds in Brazil!
Analysis
The is one of the most interesting articles I've read yet. The good aspects of this article is that Monsanto is making lots of money off of seeds that feed those suffering from global hunger. This means that our people around the world are getting fed.
On the other hand, opening up more markets in other countries could be the downfall considering that their against genetically grown crops. This could be detrimental for Monsanto and could cause a deficit in their earnings which could possibly lead to them failing overall.
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