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Monsanto 2Q profits off

Monsanto second quarter profits are down about 25 percent.  Earnings were weaker than expected partly because the company discounted prices in an effort to bolster biotech seed sales.

In its conference call to investors, Monsanto President Brett Begemann referred to price discounting saying there are no winners with the practice.

“With that lesson, as I look towards next year, I think the discipline will come back into the marketplace, because it just doesn’t help anybody, it just hurts,” said Begemann.  “So I think we go back to the way we were performing in the market as an industry before this year.”

Falling commodity prices have resulted in farmers cutting back on purchases of genetically enhanced seeds.  In addition, the strong dollar has made Monsanto products more expensive in foreign markets.

Monsanto’s second-quarter profit is $1.06 billion compared with $1.43 billion in the same quarter last year.  Monsanto’s sales were down more than 12 percent during the quarter to $4.53 billion, while expectations among analysts were that sales would be higher.

Along with discounted seed prices, Monsanto says earnings were affected by farmers planting fewer soybeans.

Seed sales fell about 8.6 to about $3.82 billion.

Sales of the company’s Roundup herbicide fell because of competition from generic glyphosate.