Monsanto's (NYSE:MON) earnings report today must have made investors long for 2008. Sales of Roundup, Monsanto's previous darling, fell 21% year over year in the company's second quarter, compared to an 85% jump from the second quarter of 2007 to the same quarter in 2008.

Should investors worry? Not really. Sales of the herbicide may not be as strong as they once were, but the future of Monsanto lies not in Roundup, but in its genes.

Even with the drop in Roundup sales, Monsanto was still able to increase its sales by over 8% thanks to a nearly 20% increase in sales of seeds. And those sales come with higher gross margins, which jumped from 59% in the year-ago quarter to 62% this quarter.

Throw in lower sales, general, and administrative costs relative to sales, and a lower tax rate, and Monsanto was able to increase earnings per share by 22%. That figure does exclude one-time charges for things such as acquisition this quarter and the payment from Solutia (NYSE:SOA) last year.

What, weeds worry?
I like this business model better because it's easier for the company to grow revenue indefinitely. Like sales of Roundup or fertilizers from PotashCorp (NYSE:POT), Mosaic (NYSE:MOS), and Agrium (NYSE:AGU), seeds ultimately have a finite volume of sales, since there is only so much land available for crops to grow. But seeds from companies such as Monsanto, DuPont's (NYSE:DD) Pioneer, and Syngenta (NYSE:SYT), which produce higher yields, can add value for farmers. Even if the company can't increase sales volume, Monsanto can charge more for its modified, more productive seeds, and thus increase its sales in dollar terms.

Monsanto's sales will always be somewhat tied to the price of commodities, but as long as the company continues to develop better crops, it should be a strong grower in any economic climate.

Our Foolishness just keeps growing:

Let us know what you think about Monsanto on Motley Fool CAPS. Make an out- or underperform call on this company or thousands of others, or post a pitch about whether you think agriculture is a boom or a bust. It's free. It's fun. And, it's Foolish.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.