Abundant supplies of glyphosate brings down price of Roundup

Farm and Ranch September 15, 2009 Monsanto has announced a reduction in prices for its Roundup herbicide. The reason; Monsanto Chief Financial Officer Carl Casale says there is now an oversupply of Roundup’s chemical ingredient glyphosate due to increased production in China.

Casale: “To the point now that as we sit here today there is probably about four times as much in the inventory of generic glyphosate in the United States as there was a year ago at this time. So given that we are in that business with Roundup there is an issue we had to deal with going forward. So what we are going to do, and what we have done, is we announced new pricing in the United States and we will throughout the world. We have re-priced this business to be competitive with the generic offerings longer term.”

Casale was speaking to an investors conference. Monsanto lowered Roundup prices from more than 20-dollars a gallon to ten to 12 dollars a gallon.

Casale: “If you look at the bottom as to what our expectations on the branded price of Roundup, right now the price out of China would be roughly $3 per kilogram, which would be equivalent to about $10 per gallon. That is the same price it was in 2006, the last time we were in this environment. So our expectation over the life of this plan as we think out to 2012 is we are going to see no rise in price.”

Casale also said Monsanto is offering 100 to 150 million dollars in one-time incentives to win back farmers who have switched to less expensive generic brands.

I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on the Northwest Ag Information Network.