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May 28, 2010
· Chinese knock offs thump Monsanto
· FDA needs clout to assure safe food
· Mutant fungus threatens global wheat
· Eurofresh emerges from bankruptcy but …
· Tracking systems used to curtail bee thefts
Chinese knock offs thump Monsanto
(Bloomberg) -- Monsanto Co., the world’s largest seed company, cut its profit forecast after deciding to reduce the price of its Roundup herbicide because Chinese competitors oversupplied the market. The shares fell the most in seven months.
Profit in the fiscal year through August will be $2.40 to $2.60 a share, excluding some items, compared with a previous forecast of $3.10 to $3.30, St. Louis-based Monsanto said today in a statement. Profit on that basis was estimated to be $3.09 a share, the average of 18 analysts surveyed by Bloomberg.
Chief Executive Officer Hugh Grant has trimmed the outlook for Roundup in the past year as Chinese producers flood markets with generic Roundup. The herbicide, also known as glyphosate, kills weeds while sparing crops containing a genetic modification. Grant said today he’ll price Roundup closer to generics and simplify product offerings.
Monsanto lowering its outlook “reflects an even sharper deterioration in the glyphosate business than we had expected,” Laurence Alexander, a New York-based analyst at Jefferies & Co., said in a note to clients.
Monsanto fell $2.39, or 4.5 percent, to $50.27 at 4 p.m. in New York Stock Exchange composite trading, the biggest decline in the Standard & Poor’s 500 Index and the largest drop since Oct. 26. Monsanto declined 39 percent this year.
Gross Profit
Gross profit from Roundup, the world’s most popular herbicide, will drop to $50 million to $200 million this fiscal year because of lower demand, falling prices and costs to streamline the Roundup portfolio, Chief Financial Officer Carl Casale said on a conference call with analysts. Profit from the business in subsequent years will be a “steady state” of $250 million to $300 million, or about $1 a gallon, he said.
“We are going to radically simplify what we offer,” Grant said on the call.
Roundup gross profit more than doubled in 2008 to $1.98
billion and was $1.84 billion last year, prompting producers in
Multinational competitors are using the generic product as a
“loss leader” to sell other chemicals, keeping glyphosate margins at record
lows, he said. The
‘Ample Supply’
“The generic product is in ample supply and the performance is just as good, so Monsanto had to recognize that,” Mark Gulley, a New York-based analyst at Soleil Securities, said in a telephone interview. “This is particularly acute given lower crop prices.”
Corn futures in
The business that makes seeds and modified crop genetics, which accounted for two-thirds of Monsanto’s $6.76 billion of gross profit last fiscal year, will drive company earnings growth of about 15 percent a year starting in fiscal 2011, Grant said.
“With Roundup officially graduating to the background of our earnings profile today, it is seeds and traits that officially carry the weight for our mid-teens earnings growth,” Grant said.
Grant is cutting seed prices to accelerate adoption of new products, such as Roundup Ready 2 Yield soybeans and SmartStax corn, which fell short of planting targets. He said last month Monsanto is unlikely to meet his 2007 goal of doubling company gross profit by 2012.
Reduced Forecasts
Monsanto had forecast 2010 profit from the Roundup business would be $1.9 billion until June 2009, when the glut of Chinese generics prompted the first in a series of reductions to the herbicide outlook. The forecast was reduced to $600 million on April 7.
Monsanto will no longer have multiple price tiers for Roundup, enabling cuts in the support infrastructure, Casale said. Roundup will be packaged with other herbicides to help combat weeds that are beginning to survive the chemical in cotton and soybean fields, Grant said.
“Weed resistance is real, but managing it doesn’t have to be complex,” Grant said.
Profit in the current quarter will be 75 cents to 80 cents a share, excluding some items, Monsanto said today. Analysts projected profit of $1.33, the average of 16 estimates in the Bloomberg survey.
Monsanto halved its fiscal-2010 forecast for free cash flow to $400 million to $500 million, from an April projection of $900 million to $1 billion.
FDA needs clout to assure safe food
The Food and Drug Administration needs greater authority,
more cooperation from other agencies and must do more scientific research to
help make the
The FDA also needs to do more to help consumers navigate the maze of food supplements on the market and requires more power to regulate them, the GAO said.
A series of food safety scares has shaken consumer confidence in the food supply, the GAO said. Just last week California-based Caldwell Fresh Foods recalled alfalfa sprouts after salmonella sickened 20 people.
"We found that FDA was hampered in its ability to carry out some food safety responsibilities -- oversight of food labels, fresh produce, and dietary supplements -- because it lacked certain scientific information," Lisa Shames, director of Natural Resources and Environment for GAO, wrote in a letter accompanying the report.
The GAO, the investigative arm of Congress, said the FDA had tried to meet some of its recommendations but needed to do more.
These needs are becoming more important as the
"First, imported food makes up a substantial and growing portion of the U.S. food supply, with 60 percent of fresh fruits and vegetables and 80 percent of seafood coming from across our borders," it said.
The FDA can inspect just 1 percent of this food.
"Second, we are increasingly eating foods that are consumed raw and that have often been associated with foodborne illness outbreaks, including leafy greens such as spinach."
The FDA regulates 80 percent of the food supply, except for meat and processed egg products, which the U.S. Department of Agriculture regulates.
More authority
The FDA has met some recommendations, GAO said. "For example, FDA reported in May 2008 that it created the Office of Chief Scientist," it said.
And it is working on a computer system that will predict which food imports are most likely to be contaminated. But GAO said Customs and Border Patrol was not alerting FDA when imports of food arrive.
The FDA should ask for more authority to regulate nutritional supplements, as well, the GAO said. The Dietary Supplement and Health Education Act, or DSHEA, covers most supplements and does not allow the FDA much intervention.
An
The GAO also said the FDA does not have the enforcement tools it needs.
"FDA does not have empirical research on consumer perceptions to support enforcement against misleading food labels," the report reads.
"For example, stakeholders from health, medical, and consumer organizations reported that 'whole grain' labels can be misleading because the product may contain little whole grain, 'transfat free' products may still be high in saturated fat, and 'natural' products may be highly processed."
Separately on Monday, the FDA and National Institutes of Health launched a new website to help report pre- and post-market safety data on food and drugs at www.safetyreporting.hhs.gov.
"We will now be able to analyze human and animal safety-related events more quickly and identify those measures needed to protect the public," FDA Commissioner Dr. Margaret Hamburg said in a statement.
Mutant fungus threatens global wheat supply
(AFP)
The mutant strains of the fungus,
called Ug99, originated in Africa but are likely to spread into
"The new mutations -- identified last year in
The study identifying the mutations was done at the
University of the
Ug99, a variant of the deadly wheat affliction commonly known as stem rust, is a reddish-brown, wind-borne fungus that causes plants to fall over and can wipe out an entire harvest.
It emerged in East Africa a decade ago and has since spread
as far as
The new strains of the fungus are a "grave challenge", David Hodson, a wheat expert at the Food and Agriculture Organisation of the United Nations, was quoted as saying in the statement.
Scientists cited by BGRI said the fungus posed a serious
risk to the densely populated and impoverished countries of South Asia, and in
the longer term could reach
Ug99 "threatens to spread into other wheat-producing
regions of Africa and
"The threat is particularly acute in
Wheat accounts for 30 percent of global grain production and
20 percent of the food calories that the world's population consumes every day,
according to data provided by BGRI, which is based at
Eurofresh emerges from bankruptcy but …
(Eastern
Arizona Courier) – Although Eurofresh Farms has emerged from bankruptcy
protection and is planning expansion the tomato grower still owes
Eurofresh emerged from bankruptcy Nov. 18, 2009, according to the company Web site. The Web site states Eurofresh reached a recapitalization agreement with its investors and "will continue searching for future growth opportunities."
Sam Brace, who works for Eurofresh representative The
Caliber Group, confirmed that the company emerged from bankruptcy but had no
information about when the tax debt will be paid to
"Our property tax case against the county is currently being litigated in bankruptcy court. Other than that, we decline to make any public comments or statements," Frank van Straalen, chief operation officer for Eurofresh Farms, said, according to an e-mail response to questions the Courier asked Brace.
When the company filed for bankruptcy protection in June
2009, it asked the bankruptcy court to determine its tax liability and the
amount it owes
According to
Entities owed tax money include the Bonita School District, the Eastern Arizona College, the flood control district and the Gila Institute for Technology, known as GIFT, according to the Graham County Treasurer's office.
County records show that Livesay
represented
A call by the Courier to the bankruptcy court's automated information line resulted in a response that stated there are "multiple cases" related to Eurofresh.
Tracking systems used to curtail bee thefts
(Telegraph.co.uk) – German beekeepers have begun installing satellite tracking systems in their hives as thefts of entire honeybee colonies are reported across the country.
Beehive banditry has now outstripped robberies of colour televisions and cars in some rural regions as bee populations have gone into sharp decline and the value of the honey producing insects has soared.
Gaede & Glauerdt, a Hamburg-based insurer specialising in apiculture, reported over 300 hive thefts last year, an 85 per cent increase.
This year's long and harsh winter in
A few weeks ago, the institute caught a 71-year-old apiarist from Baden-Wurttemberg in the act of bee burglary after installing hidden CCTV cameras in its hives.
Other beekeepers have fitted their hives with GPS devices to track bee bandits and to deter would be thieves.
Europe's bee population declined by an average of 20 per
cent between 1985 and 2005, with the sharpest declines registered in
Experts blame everything from climate change, to pesticides, mobile phone use or a mysterious bee ailment known as colony collapse disorder or CCD for the catastrophic population decline.
Specialised hive theft has also
become a problem in
Last month, the Japanese Beekeeper and Honeybee Association warned its 2,000 members to be constantly on their guard against thieves after the theft of hundreds of thousands of insects.
End Transmission