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Monsanto Company (MON), E I Du Pont De Nemours And Co (DD): Focusing on Daily Bread for Farmers and Investors

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Global concerns about sustainable agriculture that can consistently feed a hungry world show no signs of abating. The need for more productive farming to meet increasing worldwide demand is evident. What major companies are addressing these issues?

E I Du Pont De Nemours And Co (NYSE:DD)’s  agriculture division is focusing on products that promote higher crop yields and more nourishing foods.

Reading the signs of the times

Becoming more of a high-tech science-based organization, DuPont sees opportunity in creating products critical to sustainable farming.

E I Du Pont De Nemours And Co (NYSE:DD)’s focus is less on chemicals. Chemical Week stated:  “DuPont has been moving away from commodity chemicals with increased focus on agriculture, nutrition, and industrial biosciences. The company sold its automotive coatings unit to The Carlyle Group in August 2012 for $4.9 billion.” (Feb. 5;Lindsay Frost).

E I Du Pont De Nemours And Co (NYSE:DD) is addressing crop concerns, which should bode well for farmers and shareholders. I believe its focus on products for higher crop yields is positioning the company to build revenue in a critical market that will become more important as the world population escalates. More food must be produced from every available acre of  farmland.

Product diversity

E I Du Pont De Nemours And Co (NYSE:DD) provides products that address crop yields, crop diseases, insects, and weeds. Important to investors is the mileage the company can obtain from its Optimum AQUAmax products. These assist farmers in harvesting more bushels per drop (growing crops in limited water environments). Possible continuing U.S. drought conditions should foster greater demand for this product as farmers are facing increased expenses and less output.

Investors can takeaway that E I Du Pont De Nemours And Co (NYSE:DD) is addressing output concerns and opening up a revenue stream based on climate change challenges. I believe this will drive the company forward to greater growth.

Consistent R&D investment

With new initiatives in enhancing crop yields and its crop-protection innovations, R&D is vital to DuPont. Investments in R&D were $521.0 million for Q1 2013. E I Du Pont De Nemours And Co (NYSE:DD) invested $528.00 million, $506.00 million, and $528.00 million, respectively, in R&D in the three quarters leading up to Q1 2013.

Spinning and shuffling
DuPont is considering spinning off or selling its performance chemicals division, which includes its titanium technologies and chemicals and fluoro-products functions. Languishing sales are part of the reason and the division‘s cyclical nature.
Monsanto Company (NYSE:MON)
DuPont shuffled management recently to focus on a strategy of being an integrated science enterprise. I believe this is a smart move and further establishes the company’s commitment to farming . It’s a window of opportunity it must enter now and a window of opportunity for investors.
Corn-breeding R&D

Monsanto Company (NYSE:MON) provides seed brands, crop protection chemicals and in-the-seed trait technologies. These technologies help farmers protect crop yields and reduce costs.

Investors should consider Monsanto Company (NYSE:MON)’s innovative R&D efforts. In June, it announced it would invest $100 million over the next 10 years on corn breeding in Western Canada. Its objective is to generate corn that matures earlier than the present types.

For farmers, that means getting full crops to market sooner. For investors, it means a commitment by Monsanto Company (NYSE:MON) to accelerate the growing cycle of corn, and by extension, sales growth. Farmers, I believe, will jump at this innovation, which should be a growth driver for Monsanto Company (NYSE:MON) for many years.

The “corn” concern

Monsanto Company (NYSE:MON) is heavy into corn. Is there enough diversity in its operations? Some think not, and that it’s beholden too much to corn seed. The company does get involved in soybean, cotton, and vegetable seeds, but its sales are not strong in these categories, and corn is the driver that’s keeping its seed sales popping.

Goodbye GMO

Monsanto recently announced it’s building its EU seed business. It’s cancelling development of genetically modified (GMO) crops in the EU. Reuters reported that, “Monsanto said it could now focus on increasing sales of its non-GMO seed and other farm inputs, which account for more than 98% of its $1.7 billion annual turnover in Europe.”

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