By Veronique LaCapra, St. Louis Public Radio
St. Louis, MO – Monsanto share prices fell more than 8 percent today following the announcement that the company was cutting prices of its Roundup herbicide. Stocks recovered somewhat by the end of the trading day, closing down 4.5 percent.
The agricultural biotech giant said lowering prices would reduce ongoing earnings per share by 50 to 70 cents in this fiscal year.
Monsanto's shares have lost about 40 percent of their market value since the start of 2010.
Speaking on a conference call, Monsanto CEO Hugh Grant blamed China for flooding the market with cheap, generic versions of Roundup, or glyphosate.
"Even if the current glut of inventory works its way out of the system in the near-term, the embedded total supply infrastructure represents twice the world's current glyphosate demand."
Roundup went off patent in 2000.
Monsanto produces so-called Roundup Ready versions of corn, soybeans, and other crops - seeds that have been genetically engineered to tolerate Roundup.
In recent years, the widespread use of Roundup has led to the development of weeds resistant to the herbicide.
Grant said the company would reduce its product line and now only sell one version of Roundup in the U.S., to focus on resistance management.
"We'll partner with key distributors and retailers in the U.S. to take a focused Roundup brand and combine that with a package of complimentary chemicals, to create a simple, easy to use, affordable weed control regimen."
Grant said that from a business standpoint, the sole purpose of Roundup will be to support sales of Monsanto's genetically engineered seed.