It’s becoming increasingly harder to figure out whether Monsanto (NYSE: MON) is a bargain or a value trap. Yesterday, the agriculture giant announced less-than-stellar guidance for its 2010 fiscal year, which started at the beginning of the month.
It’s really a tale of two product lines for Monsanto. The seed and trait business is growing and competing well against — and sometimes with — DuPont (NYSE: DD), Dow Chemical (NYSE: DOW), and Syngenta (NYSE: SYT).
Its Roundup product, on the other hand, is headed in the wrong direction. Once a cash cow, Roundup now faces generic competition, and a glut of chemical herbicides in the supply chain is pushing down prices. Unlike drug companies such as Pfizer (NYSE: PFE) and Merck (NYSE: MRK), which can pretty much kiss off most of their sales once generic competition starts, Monsanto does expect to bring in $650 million to $750 million in gross profits from Roundup in the coming year. Still that’s a long drop from the nearly $2 billion in gross profits that the herbicide brought in during fiscal 2008.
In a couple of years, it’s not going to matter much: By 2012, the company expects that seeds and licensed traits will make up 85% of the company’s total gross profit. But in the meantime, the drop is hurting the bottom line.
Earnings per share, after adding back restructuring charges, are expected to come in between $3.10 to $3.30, a sharp decline from the $4.40 or so that’s expected from the recently completed year. Trading at a forward price-to-earnings ratio of more than 24, Monsanto is a little cheaper than we’ve seen in the past, but it doesn’t leave investors much breathing room, if Roundup sales continue to fall faster than expected.
Mayor urges council to reject Bill 132, allow unused Hamakua land sale to proceed | Hawaii247.org
MEDIA RELEASE
Mayor Billy Kenoi today called on the Hawai’i County Council to reject Bill 132 when the council Finance Committee considers the measure next week. Bill 132 would require the County Council approve each county land sale two times, adding a new bureaucratic layer to the process.
“This issue is about fiscal responsibility,” Mayor Kenoi said. “Because of the difficult economic times, we proposed selling a portion of the Hamakua lands that have sat unused for 15 years. The sale was part of a budget process designed to avoid raising taxes, avoid cuts in non-profit agencies, maintain free bus service, and protect essential services such as police and fire protection. In June, the County Council agreed with this proposal, and voted 8-1 for a budget that included revenue from a Hamakua land sale.”
The efforts to produce Macadamia Nuts in Brazil
by Dan Vallada – FoodBizDaily.com Sao Paulo
The macadamia nut has been cultivated in Brazil for four decades. Researchers are trying to increase its productivity and resistance.
The commercial cultivation of macadamia nuts in Brazil is recent, started only 40 years ago and productivity is still low. The country, the seventh in world production (2,400 tonnes in 7 thousand hectares), has about 250 producers, 160 of them in the State of Sao Paulo. The biggest Brazilian harvest happened in 2006, with 3,500 tons. Therefore, technicians and researchers are joining forces to study its varieties, nutrition, genetic improvement and phytosanitary control.
Pacific Rim Summit to Highlight Biotechnology Tools for the Green Economy | Reuters
WASHINGTON–(Business Wire)– Developing and developed countries across the Pacific Rim are adopting biotech solutions to cut greenhouse gas emissions, efficiently utilize resources, and jumpstart economic growth. The Biotechnology Industry Organization (BIO) today announced the sessions and speaker presentations to be delivered at the 2009 Pacific Rim Summit on Industrial Biotechnology and Bioenergy, to be held Nov. 8-11, 2009 in Honolulu.
Federal aquaculture grants being made available to Hawaii farmers | San Francisco Examiner
HONOLULU — Aquaculture farmers in Hawaii are now able apply for federal stimulus money to help offset high feed prices experienced by the industry last year.
The state Department of Agriculture said Wednesday that the U.S. Department of Agriculture has allocated $150,000 as Hawaii’s portion of $50 million feed stimulus funding.
The Hawaii grants are being administered through the state department’s Aquaculture Development Program.
State officials say reimbursement amounts are limited to available funds. That means if the amount of eligible applications exceeds the grant amount available, recipients will receive a prorata adjusted amount.
Federal aquaculture grants being made available to Hawaii farmers | San Francisco Examiner
Hawaii House Blog: Agriculture Layoffs Will Impact Hawaii Exports
Wednesday, September 9, 2009
Agriculture Layoffs Will Impact Hawaii Exports The House Agriculture Committee will hold a second informational briefing on the impact of potential layoffs for agricultural inspectors. Tomorrow, Ag Chair Rep. Clift Tsuji will focus on Hawaii’s wide range of exports. You can see it live on Olelo, Ch. 49.
WHAT: The House Agriculture Committee will hold a meeting to gather information on the negative impact of potential agriculture inspector layoffs on Hawaii’s export industry, including plants, tropical flowers, tropical fruits/papaya, macadamia nuts, coffee, and more.
WHEN: Thursday, September 10, 2009
1:00 p.m.
WHERE: State Capitol, Conference Room 325Posted by Georgette at 11:12 AM
Hawaii House Blog: Agriculture Layoffs Will Impact Hawaii Exports