Thanks to a little help from the Supreme Court, Monsanto
In 2007, a federal judge issued an injunction barring planting of the biotech crop until the U.S. Department of Agriculture completed its environmental impact study, even though the USDA had cleared limited planting of the crop while the study was being completed.
On Monday, the Supreme Court said the lower court had stepped over the line by issuing an injunction. With the ball back in the USDA's court, the agency is expected to reinstate the limited-planting policy until the study is complete in about a year. Monsanto says it should have seeds available for the fall planting season if the USDA gives farmers a green thumbs-up.
The three-year delay cost Monsanto revenue not just from selling the Roundup Ready alfalfa seeds, but also from selling Roundup herbicide applied to kill weeds in the fields. Monsanto won't benefit as much from the latter now that cheap generics have cut into sales of Roundup, but at least it should be able to make some money selling the seeds.
If the Supreme Court decision is taken more broadly, it could help Monsanto avoid delays in its quest to get Roundup Ready sugar beets approved as well. Of course, avoiding injunctions and letting the USDA do its job could help rival biotech seed makers -- DuPont
Biotech seed makers will always have an uphill battle when it comes to gaining public acceptance of their product. A better-late-than-never strategy isn't exactly the best business practice. But if you're willing to factor delays into your valuation, Monsanto has a nice pipeline of multitrait seeds in the works -- assuming the company remains injunction-free.
Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Syngenta is a Motley Fool Global Gains selection. Motley Fool Options has recommended a synthetic long position on Monsanto.The Fool's disclosure policy issued an injunction last week barring dirty coffee mugs from being left in the lunchroom sink.
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