Monsanto Says 100,000 Acres of Corn May Have Resistant Bugs
Monsanto Co. (MON), the world’s biggest seed company, said 100,000 acres of corn in Iowa and Nebraska may harbor rootworms that developed resistance to the company’s insect-killing biotechnology.
The area represents fewer than 1 percent of the acres planted with the biotech corn, Graham Head, global lead for insect-resistance management at St. Louis-based Monsanto, said today. The crop is engineered to produce insect-killing protein derived from Bacillus thuringiensis, or Bt, a natural insecticide.
“Ninety-nine percent plus of our customers are still getting a really good experience with that technology,” Head said in a telephone interview. “The impacted acreage is maybe somewhere around 100,000 acres.”
That estimate is based on Monsanto’s investigations of “unexpected damage” to crops and work with Aaron Gassman, an entomologist at Iowa State University in Ames, who reported in July finding four fields with Bt-resistant insects, Head said. Monsanto’s monitoring hasn’t uncovered resistance, only areas of unusually high rootworm populations and crop damage, he said.
Monsanto’s technology is the first to develop bug resistance because it has been on the market for years longer than Bt corn developed by rivals such as DuPont Co., Gassman said in an interview. Other technologies may also fail to perform with time, he said.
“The general pattern in terms of pest survival and anticipated pest genetics is similar among all Bt traits, so I think we need to be concerned for all products on the market,” Gassman said in the telephone interview. “It’s basically an early warning.”
Rotating Crops
The Environmental Protection Agency requires modified corn that incorporates pesticide to be grown among some conventional plants to thwart the emergence of pesticide-resistant insects. To prevent resistance, Monsanto recommends farmers rotate crops, plant the required refuge of non-Bt corn and use SmartStax seeds introduced in 2010 to kill rootworms with a second mode of action, Head said. Gassman said that is good advice.
“While we understand why this news might appear alarming to investors worried that Monsanto’s products are losing their efficacy, we would highlight that this seems to have occurred in very few instances,” Robert Koort, a Houston-based analyst at Goldman Sachs Group Inc., said today in a report.
Bt Resistance
When the pink bollworm developed resistance to a Bt cotton trait in India a couple of years ago, Monsanto added a second Bt gene to cotton and urged growers to be vigilant about planting a non-Bt refuge, Head said. Monsanto plans to add third and fourth modes of insect control to its U.S. corn seeds later in the decade, he said.
Monsanto fell 90 cents, or 1.3 percent, to $69.78 at 4:15 p.m. in New York Stock Exchange composite trading. The shares earlier fell as much as 4.7 percent.
The Wall Street Journal reported Gassman’s discovery of the resistant bugs today.
“The issue driving today’s weakness is unlikely to have any financial impact on Monsanto,” Vincent Andrews, a New York- based analyst at Morgan Stanley, said in a report. Andrews rates the shares “overweight” and Koort rates them “buy.”
There is no reported rootworm resistance to Bt technology that DuPont uses in its Herculex and AcreMax seeds, Bill Belzer, a senior marketing manager at the company’s Pioneer unit, said today in a telephone interview.
DuPont’s trait, which was developed with Dow Chemical Co. (DOW), is licensed to Monsanto and used in its SmartStax seeds to control rootworms with a second insecticide. DuPont, which relies on the single trait to control rootworms, is developing a second mode of action that may be available in 2013, Belzer said.
To contact the reporter on this story: Jack Kaskey in Houston at jkaskey@bloomberg.net
To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net
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