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Global Resistance Forces Monsanto to Drop GE Wheat

Delay Is Seen for Genetically Modified Wheat
July 31, 2002
New York Times

Global Resistance Forces Monsanto to Drop GE Wheat

Monsanto says its shifting strategy on GM wheat

By Carey Gillam

OKLAHOMA CITY, Okla., July 29 (Reuters) Leading biotech agricultural concern
Monsanto Co. said on Monday it was shifting its strategy for introducing the
world's first biotech wheat to include an emphasis on developing enhanced
health, taste and texture traits to appeal to food companies and consumers
and hopefully open up world markets to the controversial grain.

"Our focus is shifting to improve the quality of wheat over time," said
Monsanto spokesman Michael Doane. "We want to create maximum value in
biotech wheat varieties."

For the last several years, Monsanto has stressed the value that a
genetically modified Roundup Ready wheat can bring to farmers. The
herbicide resistant strain, for which Monsanto is currently seeking
regulatory approval, could create efficiencies and potentially higher yields
for farmers, according to Monsanto.

But staunch opposition to biotech wheat in many key international markets
has made U.S. farmers fearful about adopting the technology and virtually
the entire organized U.S. wheat industry has demanded that Monsanto move
cautiously in any introduction.

Doane declined to discuss the company's plans in detail, but he said that
the shift came about in the last few months after input from different
players in the wheat industry.

He also indicated Monsanto has backed off of its previously-stated timeline
for introducing Roundup Ready wheat by 2005, as it has taken heed of
industry recommendations for Monsanto to work to increase market acceptance
before the introduction of the new biotech wheat seed.

"The bald facts are we're never going to sell a seed of biotech wheat until
we know we have demand out there," Doane said.

Monsanto director of global wheat business John Redd also declined to give
details of the new strategy and said biotech wheat was a "work in progress,"
that Monsanto "continues to fine tune."

Monsanto disclosed the change to an industry gathering at the U.S. Wheat
Associates board meeting in Oklahoma City.

U.S. Wheat Associates spokeswoman Dawn Forsythe reacted with cautious

"The discussion holds the door open," she said.

There are still a lot of issues and concerns to address, she said.

Monsanto's development of a biotech spring wheat variety has been highly
controversial because of concerns that the introduction of Roundup Ready
wheat may cut off key export markets for the grain. Major wheat importing
countries like Japan and the European Union have stressed repeatedly that
consumer opposition to genetically modified wheat would
override scientific assurances that the biotech grain was safe.

Opposition by world players was underscored on Monday when representatives
from Europe told the U.S. wheat meeting in Oklahoma that genetically
modified wheat remained unwelcome.

"There is no room at all for compromises," said Antonio Costato, chief
executive officer of Grandi Molini Italiani and president of Euroflour.
"The European consumers are not attracted by GM food. They do not see any
benefit from them.

Peter Jones, wheat director for Rank Hovis in England, also said GM wheat
was hotly opposed.

"We simply won't be able to sell the product. The consumer is just not
ready to buy," he said.

General Mills vice president Ron Olsen had a similar message. Polls show 7
to 10 percent of people say they won't buy GM products, he said.

"We don't want to risk that business loss. We're very sensitive to looking
at shareholder value and the value of our corporation," Olsen said.

In seeking to assuage concerns, Monsanto's Doane said the rollout of biotech
wheat would wait until acceptance was achieved.

"The bald facts are we're never going to sell a seed of biotech wheat until
we know we have demand out there," Doane said.

07/29/02 19:48 ET


Monsanto Earnings Fall Sharply

.c The Associated Press

ST. LOUIS (AP) - Biotechnology and agricultural firm Monsanto Co.'s
second-quarter earnings fell sharply due to restructuring of the Latin
American operation and lower sales of Roundup herbicide, the company said

For the period ending June 30, the St. Louis-based company earned $147
million, or 56 cents per share, down 62 percent from earnings of $389
million, or $1.47, in the second quarter of 2001.

The latest results were well short of the $1.07 a share consensus forecast
of analysts surveyed by Thomson Financial/First Call.

Monsanto shares declined 99 cents a share, more than 6 percent, to $14.84 in
late-morning trading on the New York Stock Exchange.

``In Latin America, consistent with our strategy, we began to implement the
tactics necessary to reduce risk,'' president and chief executive officer
Hendrik A. Verfaillie said. ``Even with these challenges, cash generation
is improving as we address working capital.''

Wet spring weather in the U.S. delayed planting of corn and soybeans, which
reduced sales of Roundup, the company said.

Second-quarter net sales declined to $1.6 billion from $2.01 billion, and
sales for the first six months of $2.8 billion also dropped compared with
sales of $3.3 billion in the first half of 2001.

For the six-month period, the company reported a net loss of $1.6 billion,
or a loss of $6.02 per share, compared to earnings of $444 million, or $1.68
per share, in the first six months of 2001.

On the Net:

07/23/02 11:26 EDT

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