In its cover article for its December 17, 2007 issue, "Monsanto: Winning the Ground War", Business Week profiles Monsanto's success, obtained since 2002, as one of the world's largest, most profitable, biotech agriculture companies. Monsanto has built its success on two strategies. First, the company decided to focus its effort on GM (genetically modified) crops that are used to produce "formulated" foods (processed foods with more than one ingredient), rather than foods that are purchased directly by the consumer. This strategy reduced political opposition to the company's research and its products. Second, the company focused on four commodity crops--corn, soybean, cotton, and canola (controversially, within the company, ending research into GM wheat). Monsanto's GM corn seeds, coming out of research and into production, for instance, are expected to increase the corn harvest from 150 bushels/acre in 2006 to 300 bushels/acre in 2030.
The article explains the economic reality that propels Monsanto's strategies. The industrialization of China, India, and other previously under-developed countries, has greatly increased the wealth of large segments of their populations. Those peoples are using their new wealth to increase their consumption of meat. In China today, a large, new, middle class is eating meat twice a day, instead of once a day or every several days. This increased meat consumption has greatly increased demand for beef and other corn-finished meat animals. To meet this increase, farmers around the world are turning to GM seeds to produce the feed for meat animals. As a result, there is little likelihood that organic agriculture, not using GM organisms and other artificial enhancements to increase productivity, will become a major player in meeting this demand. Organic foods will increase their market, but probably remain as upscale niche foods, which will maintain their high price. The prospect of high prices is good news for organic farmers.
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