The Biggest Threat to Monsanto

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

There's a fly in the ointment at Monsanto (NYSE: MON  ) . Or, rather, a rootworm in the corn field. Western corn rootworms have been found in four pest-resistant fields in Iowa, and while you might think it's normal for some bugs to make it past even Monsanto's vaunted pest-resistant genetically modified corn, the corn in question was designed to resist this specific pest. If the bug is developing its own resistance to the corn, that could open a whole can of worms for Monsanto.

The world of genetically modified crops is fiercely competitive, with Monsanto, DuPont (NYSE: DD  ) , and Syngenta AG (NYSE: SYT  ) controlling about 47% of the global proprietary seed market. While Monsanto is by far the largest, farmers are under pressure to keep corn yields high, and they may switch to competitors if Monsanto's product doesn't work as intended. Aaron Gassman, the scientist who discovered the affected fields, tested some of the rootworms there and found that they were still highly vulnerable to corn grown from competitors' seeds, indicating that they had only developed a resistance to the specific gene in Monsanto corn.

This isn't surprising, given that Monsanto's gene is found in roughly one-third of all corn grown in the U.S., and that the high price of corn has led farmers to stop rotating crops each year. Farmers might be able to continue growing corn each year if they instead rotated pest-management strategies, giving pests less time to build a resistance. This would be bad news for Monsanto, but good news for its smaller rivals, as well as insecticide companies like Dow Chemical (NYSE: DOW  ) and Scotts Miracle-Gro (NYSE: SMG  ) .

Monsanto has already stated that its seeds work as intended on 99% of the acres using them, and Gassman has also said that it's too early to tell whether this is just an isolated issue, or if it will be more widespread, like Roundup-resistant "superweeds." To stay updated on any developments, add these companies to your My Watchlist.

Fool contributor Jacob Roche holds no position in any of the stocks mentioned. Check out his Motley Fool CAPS profile or follow his articles using Twitter or RSS. Motley Fool newsletter services have recommended buying shares of Syngenta. Motley Fool newsletter serviceshave recommended creating a synthetic long position in Monsanto. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1546083, ~/Articles/ArticleHandler.aspx, 10/26/2016 5:49:45 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 8 hours ago Sponsored by:
DOW 18,169.27 -53.76 -0.30%
S&P 500 2,143.16 -8.17 -0.38%
NASD 5,283.40 -26.43 -0.50%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 4:01 PM
MON $101.40 Down -0.60 -0.59%
Monsanto CAPS Rating: ***
DD $69.62 Down -0.52 -0.74%
DuPont CAPS Rating: ****
DOW $54.11 Down -0.13 -0.24%
The Dow Chemical C… CAPS Rating: *****
SMG $88.08 Down -0.58 -0.65%
Scotts Miracle-Gro CAPS Rating: *****
SYT $81.40 Up +1.39 +1.74%
Syngenta CAPS Rating: *****