Biotech Values

[DewDiligence]

DuPont Introduces Drought-Tolerant Corn Hybrids

[This product family comes from conventional breeding, not recombinant genetics. (The latter kind of innovation is on tap for market penetration by MON in a few years—#msg-41324910).]

http://online.wsj.com/article/SB10001424052748704405704576063961961160744.html

›JANUARY 5, 2011, 4:21 P.M. ET
By IAN BERRY

DuPont Co. will start sales in the U.S. this year of corn seeds adapted to cope with dry climates, an opening step in what is expected to develop into a multibillion dollar global industry for growing crops in drought conditions.

Pioneer Hi-Bred, DuPont's agribusiness arm, has been testing the conventional new hybrid seeds since 2008 and said on average the seeds generate a 5% higher yield over existing products.

DuPont and rivals including Monsanto Co. are also developing genetically modified corn seeds with more resistance to drought, but Pioneer Hi-Bred research manager Jeff Schussler said on a media call Wednesday that it will be mid- to late-decade these are commercially available.

Drought tolerance is seen boosting yields and opening up more land for cultivation, the next frontier for seed genetics, which in recent years has largely focused on pest-control.

Pioneer Hi-Bred will start selling its conventional offering under the Optimum AQUAmax brand throughout the U.S., but focus on states like Kansas, Colorado, Texas and Oklahoma. Productivity in these "dry" states falls far below that of Iowa, Illinois and Indiana, which usually get more rain.

The company plans to sell a limited quantity of the new seeds this year and boost output in 2012. Senior marketing manager Monica Patterson didn't disclose pricing but said it would be "competitive" with other products.

Pioneer Hi-Bred has been gaining share in the U.S. seed market, in part because of missteps by Monsanto, which was forced to reset the pricing of new seeds launched last year after poor sales.

The rivalry between the companies has escalated in recent years with a series of legal tussles, and the Pioneer Hi-Bred launch comes a day before Monsanto provides its own product update alongside with its fiscal first-quarter earnings.

Monsanto won't be selling drought-tolerant corn in 2011, but a spokeswoman said its own genetically modified variant is in the final development phase and will require regulatory approval.

Switzerland-based Syngenta AG also has entered the market, announcing during the summer a conventionally bred drought-tolerant corn it will offer in 2011.

Continuous yield improvements for corn and other crops are seen as essential in order to feed a growing population that is eating more meat, which requires more grain.

Drought-tolerant corn could prompt more farmers to switch to corn from wheat in the western Plains of the U.S. [which would be very bullish for MON], said Kraig Roozeboom, an agronomist with Kansas State University Extension. Corn and soybeans planting last year overtook wheat in the state last year for the first time since records were kept.

"This may continue and even hasten that transition," Mr. Roozeboom said. But he added that biotech crops, not conventional seeds, will have the biggest impact.

Drought-tolerance is also seen as a crucial milestone as seed companies look to expand their presence and boost production in Africa.

Pioneer Hi-Bred's Schussler said its drought-tolerant seed directs water "more efficiently" toward growing the grain, but the plants look the same as those grown with existing seeds.‹