The Global Demographic Tailwind

[Democritus_of_Abdera]

Major factors impacting Monsanto’s P/E ratio ....

The following themes have been foremost in my mind regarding possible future drivers of Monsanto’s stock price.

1. Declining revenues from Roundup (and possible exit from the herbicide business ala #msg-39728397)

MON has been forced to cut Roundup prices in half due to Chinese generic competition (see: http://monsanto.mediaroom.com/index.php?s=43&item=752 ).

2. A robust pipeline of gene-modified seed that is based upon solid research

MON will be aggressively rolling out Genuity SmartStax corn and Genuity Roundup Ready 2 Yield soybeans in the coming year to increase yield and reduce the need for farmer refuge set-asides, where the refuges are native plants to mitigate against the environmental impact of gene modified species. The SmartStax corn will be a platform for future trait launches including a much anticipated drought-resistance trait (see: http://monsanto.mediaroom.com/index.php?s=43&item=750 ).

3. Difficulty in protecting intellectual property

MON must be constantly on the guard against customers harvesting seeds from their crops to circumvent the need for repeated purchases (see: http://www.monsanto.com/monsanto_today/for_the_record/monsanto_pilot_grove_settlement.asp ).

4. Legal ramifications from a general public fear of unanticipated consequences regarding gene modifications.

There are fears that genetically modified crops might have unintended health consequences for the consumer (see: http://www.monsanto.com/monsanto_today/for_the_record/food_safety.asp ) or be detrimental to the ecosystem.