Exclusive: Indicators mount that Monsanto will be anti-trust target - Stock Analysts takes note

Yesterday it was noted that a major yet unreported story was developing that indicated that the Department of Justice and the Department of Agriculture were signalling a significant departure from Bush anti-trust guidelines and that the Obama administration reported that they were going to conduct workshops to investigate anti-trust monopolies in agriculture by mega agriculture conglomerates. (See thread: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x8602763)

Further research indicates that Monsanto is the most obvious initial target of anti-trust research.

These moves have gone unreported in the media and the blogosphere beyond DU, but today atleast two stock analysts connected the same dots noted yesterday and asked if Monsanto was being prepared to be "thrown under the anti-trust bus"




Monsanto Chairman and Chief Executive Officer Hugh Grant has a great deal to be worried about.

If you connect the dots it shows that powerful forces are lining up to take aim against Monsanto's market domination of the seed market. There are two other political reasons that the Monsanto CEO should also begin to worry:

1) The Attorney General's office inherited a number of complex legal positions that it doesn't agree with and may feel constrained to take immediate action on. Certainly the AG's office would be delighted to find some area that they can demonstrate a significant and radical change from the previous administration and show results. The AG's office has announced that it has officially "withdrawn Bush administration guidelines" on agricultural anti-trust.

2) It is a political win-win-win for the administration to pursue anti-trust against agricultural mega companies. It helps the administration build political favor in Republican areas. The fact that Monsanto is filing hundreds of lawsuits against ordinary farmers has sealed the politcal test on the issue. It also plays well to the more liberal Democratic base and it will be welcomed by consumers who will benefit from honest competition.


To understand what has happened connect these dots:

1) Monsanto projects monopoly like market projections for future profits.

Monsanto has a dominate position in the market and is now projecting huge increases in revenue (not something anti-trust investigators will have much sympathy for. Monsanto is projecting a 250% increase in gross profit from 2007 to 2012)

By 2012, Monsanto expects its gross profit from its core seeds and traits business to be between $7.3 billion and $7.5 billion – about 2.5 times its 2007 level.

2) Organization for Competitive Markets - (appears to be the leading think tank to fight big AG monopoly) launches the Seed Concentration Project in July 2008 specifically to fight Monsanto's monopoly of the seed market.

http://www.competitivemarkets.com/index.php?option=com_content&task=view&id=206&Itemid=64



The problem of consolidation in the seed industry is well known. One company in particular, the Monsanto Company, controls a high percentage of the global seed market and continues to increase its dominance by acquiring or merging with a significant number of companies in its industry. Monsanto has acquired dozens of independent seed companies in the last decade. It controls 70% of the transgenic corn market and more than 90% of the transgenic soybean market.

In 2007, Monsanto acquired Delta and Pine Land, the nation's largest cotton seed company. OCM opposed this acquisition, as did several other farm organizations and 13 state attorneys general. Monsanto now controls about 90% of the cotton seed and cotton seed traits marketplace.

3) Monsanto sues farmers for patent lawsuits

http://www.competitivemarkets.com/index.php?Itemid=63&id=207&option=com_content&task=view

Monsanto’s effort to enforce licensing agreements and protect its patent rights has dramatically altered American agriculture. Monsanto has filed more than 100 patent infringement lawsuits against U.S. farmers. Sometimes the farmers and businesses it targets are completely innocent. Yet these farmers undergo undue financial and emotional stress in their effort to avoid costly lawsuits.

4) Monsanto sues Dupont

http://uk.reuters.com/article/idUKTRE5445YW20090505?sp=true

NEW YORK (Reuters) - Monsanto Co, the world's biggest seed company, said on Tuesday it sued chemical maker DuPont for unlawful use of its proprietary Roundup Ready herbicide tolerant technologies in soybeans and corn.

DuPont responded by accusing Monsanto of trying to deny access to alternative technologies at a time when farmers are struggling with weeds that are increasingly resistant to current Monsanto products.

"We are disappointed Monsanto chose litigation and inflammatory public statements over civil discourse," James Borel, a DuPont group vice president, said in a statement.

Monsanto said its suit was filed on Monday in federal court in St Louis against DuPont and its subsidiary, Pioneer Hi-Bred International, Inc.

5) Dupont and OCM join forces

http://www.moneymorning.com/2009/08/21/monsanto-dupont/

It’s likely that by “masked third parties” Grant meant the Organization for Competitive (OCM) Markets, a nonprofit group that claims Monsanto controls 90% of the market for genetically modified seed. The Lincoln, NE-based organization claims to take on big agricultural companies in defense of small farmers and consumers, but it was recently revealed DuPont gives the group financial support.

6) OCM conference on anti-trust agricultural practices attracts record attendance

The Organization for Competitive Markets (OCM) drew a record crowd of ranchers, farmers, feedlot operators, seed distributors and others for its annual conference held in St. Louis on August 7th. Attendees heard panel presentations concerning the ills of market concentration and anticompetitive practices and ongoing efforts to address these issues. Featured speakers included antitrust attorneys, food retail economists and two top Obama Administration officials tasked with enforcing antitrust and competition laws in the agriculture and livestock sectors.

7) Obama administration attends OCM conference and announces major policy change on Agriculture Anti-Trust and announces workshops to investigate impact on farmers and ranchers:

http://www.usdoj.gov/atr/public/press_releases/2009/248797.htm

The Department of Justice and USDA are interested in receiving comments on the application of antitrust laws to monopsony and vertical integration in the agricultural sector, including the scope, functionality and limits of current or potential rules.

The Department and USDA are also inviting input on additional topics that might be discussed at the workshops, including the impact of agriculture concentration on food costs, the effect of agricultural regulatory statutes or other applicable laws and programs on competition, issues relating to patent and intellectual property affecting agricultural marketing or production, and market practices such as price spreads, forward contracts, packer ownership of livestock before slaughter, market transparency, and increasing retailer concentration.

8) Market analysts start to take note:

Money morning (quoted above) http://www.moneymorning.com/2009/08/21/monsanto-dupont/

CNBC Jim Cramer: Monsanto couldn’t provoke a government inquiry anymore than it already has:

http://www.cnbc.com/id/32404907

The Obama administration is stepping up its antitrust enforcement, Cramer said Thursday, and Monsanto could be the first target. Recent moves by the company seem to be daring the Justice Department to file a suit.

Believe Cramer when he says that the government has a strong case against Monsanto . A series of competition-crushing acquisitions made this biotech disguised as an agriculture outfit the market leader in genetically modified US corn, soybean and cotton seeds. And Monsanto maintains strict agreements with its farmer clients that leave them virtually no choice but to feed at the corporate trough. Plus, the company plans to push through a 42% price increase on its new seeds, and there’s nothing these farmers can do about it.

Cramer: Buy These Ag Stocks
Monsanto couldn’t provoke a government inquiry anymore than it already has. The firm seems to have farmers and the seed market in a stranglehold. Monsanto’s reputation is so noteworthy that the company serves as the villain in the new documentary Food, Inc. Cramer thought the movie’s accusations alone might be enough to draw Washington’s ire.

The strangest part of this whole story is how it seems to be evolving completely outside of the mainstream media (only noted by agricultural and stock analysts so far) and outside of the blogosphere.

Connecting the dots outlined above seems to indicate that this is going to be the first major clash between the Obama administration and big agriculture.

As usual, grantcart, your work is sublime, and I'll kick this and rec it, too....

And excellent post by ProSense went hours without a rec.

Must have had several unrecs.

Of course, nobody wants good news on the Public Option.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x8603804

You don't suppose they've genetically modified GOATS, do you? :P

:rofl:

You missed the connection with the CEO of Monsanto . .


go back and find the hidden nugget.

Bada Bing!!! Baybee!!

burning.

must distract think...

ponies (shit, no, ponies have huevos)

rainbows

Hello Kitty

better now

BWAHA AHa HAH H AHAHa Hh aH aH aH aH aHA aH A

:rofl:

:P

:rofl:

Please take a huevo count.

Should be two.

I think.

:rofl:

married so long it doesn't matter anyhow....

:hide:

...they're not really "yours".

:P

sad, really.

At least they have each other!


BWA HAAAAA HA :rofl:

:rofl:

Food and Water being fucked with is serious business.

:kick:

talking about how our food system is leading to obesity and whether cheap food has a cost.

Of course he would not name the villain... meet him... Greed Corporation...

So I am not sure this is going happening completely outside the MSM grasp.

I suspect that story, and a few others on Obesity, are tied to this...

Just an observation.

And yes, we are going to have to solve the crisis, and breaking a few of these monsters will not be a bad idea in the long term.

no longer is it in their best interests to just sit back and let the government do their thinking and managing for them....

It is a slow movement but a movement that I feel is definitely taking shape..

One thing I do hope though is that the citizens of this country never again close their eyes and remain silent while the government that we voted in ensures our needs are met accordingly..

simple truth is greed shall always follow power...too many can and would find themselves feeling the same way these now in control fat cats feel if perchance they themselves lived and breathed in the world of privalage..regardless of what our fore fathers initial plan was of getting away from royalty, we ended up with the very same class wars...


the names have been changed to protect the guilty but they still exist and it's about time we the people pulled them down off those thrones that we the people helped put them on....bought and paid for by the very citizens they look down upon

Very nice analysis. And very nice to hear, also.

I imagine Justice is going through a re-prioritization of its goals after the past eight years. Assuming this, and that realizing that both investigations and lawsuits take a relatively long time (politically-wise)to accomplish, I wouldn't be at all surprised to see a lot of this on the major news stations going into 2011.

and then they get broken up into small pieces. It would be long past due in my opinion.

The problem is that they are projecting huge increases of profits, having achieved a monopoly on seeds they now intend to sharply increase prices.

market, expect all food prices to rise. What would that do to the economy?

It would ruin any real chance at an economic recovery because one company would have us all by the throat.

I did a little research on this.

First, seeding rate: According to several reputable websites, a very heavy seeding rate for corn is 35,000 seeds per acre. There are 3500 seeds per pound, so it takes 10 pounds of seed to plant an acre of corn. They're looking at 200 to 300 bushels of corn per acre, and let's go to the low end--200 bushels per acre.

Let's say that, right now, corn seed is $7 per pound. I found some real ritzy heirloom seed for $3.50 per pound, so obviously Monsanto will want twice that much. IOW, $70 to seed an acre of corn, or 35 cents per bushel. A bushel of corn costs $2.89, and contains 56 pounds of shelled corn. Work out all the numbers, and the seed contributes a little over half a cent to the price of a pound of corn.

Now let's get really stupid and say Monsanto decides to charge $70 per pound of seed. This wouldn't do shit to the farmer, because the farmer has two major alternatives: Pioneer Hi-Bred and Northrup King. It would fuck up Monsanto, because I have little doubt NK and PHB watch Monsanto's pricing like hawks and they would do everything they could to exploit the situation. But you know something strange? I have driven by a LOT of corn crop in the last couple months. Farmers put signs with the names of the seeds used in the fields at the ends of the rows, and I've looked at the signs. PHB has a lot of corn crop in the ground this year. NK has a bunch--probably more than PHB. There are a few others that don't come to mind. Monsanto? I KNOW what a Monsanto logo looks like, and so far I haven't seen one on a field sign. Not one.

The argument here is, if you seed with non-Roundup Ready seed and your neighbor sprays his RR crop with Roundup, the carryover will kill your crop so you better plant RR seed just in case. Couple problems with that theory--there are federal laws governing carryover, and if your neighbor seeds with Pioneer Hi-Bred because he's got a French customer who won't accept Monsanto-seeded corn, you don't have to worry about glyphosate carryover anyway.

But seriously. If Monsanto decided to jack up their prices by an order of magnitude, it would raise the price of corn by a nickel a pound assuming farmers didn't do things like drop their seeding rates or tell Monsanto "there's a Northrup King guy sitting right here. You know I buy 250 tons of corn seed a year. If you don't want me to hand the order for next year's seed allotment to this Northrup King man, right now, you get the price of the seed I buy back down where it used to be. Ain't a damn thing in my licensing agreement says I can't tell you guys to go fuck yourselves." Some guy getting ready to buy half a million pounds of seed (enough to seed 50,000 acres) has pull you and I do NOT have.

:woohoo:

hate monsanto

The CEO of Monsanto is named Hugh Grant????

I wonder how he liked working with Sandra Bullock in that movie.

In Iraq ther Bushista helped them destroy the millenium old seeds of Iraqi farmers. I hate them almost as much as Bushista.

:thumbsup:

Tearing down this company would bring me great satisfaction.

I mean FOR grantcart

for green offshoot companies to sprout their tendrils... :-)

I had an "aha!" moment watching it. And I've been aware of the big agra threat for decades. I've eaten organic for decades too, though now I have many doubts about it's purity and safety.

I recall John Ashcroft after leaving government saying that he was surprised there was not a terrorist hit on our food. So, do I put on my tinfoil hat now, or wait?

He is setting himself up against one large corporate interest after another. It has to be done but I fear for him.

What that company has done to the food supply and to nature is beyond reprehensible. They are tampering with the building blocks of life itself for greedy profit, the future of humanity be damned. :mad:

You excellent compendia of interrelated stories are much appreciated.

:woohoo:

Are you either for GMO or against GMO?

What is your stand on the recent appointment of Michael Taylor to the USDA? What about Vilsack, the Stealth Secretary of Agriculture?

We all know that Monsanto is up to something big in it's inexorable destruction of Heirloom seed varieties by any means it has at it's well funded disposal.

http://www.countrysidemag.com/issues/90/90-2/Jerri_Cook.html

The biggest and most flagrant issue is the complete blackout on the desire by Americans to have GMO Food ingredients labeled. The Bioptech indistry knows that they will be shunned if this occurs, and a by product of the labeling law would reveal the dirty little secrets of centralized food production in this country. We no longer have facilities which are not utterly contaminated with GMO seeds and byproducts. Many silos would take Millions and Millions of dollars just to clean out any trace of GMO material, and you can take that to the bank.

Seed cleaning operations, once a mainstay of American agriculture, have been bought out and shuttered by Monsanto, or they have been harassed because their existance "May Entice Farmers to Violate Monsanto Patents". What the fuck kind of Corporate Loving Law is this?

Don't get me wrong, but Clinton was involved with the same shitty deals as Bush Senior, Dubya, and now Obama.

Workshops... right.

I'll wait to see real change before I start cheerleading this DLC Reunion. Just like I wait to see how much more they can screw Universal Health Care out of existence.

Thanks for the post with all the links though. But as far as media coverage of this, not a chance. Monsanto owns the media, just like they own the Government. Cramer is mistaken when he says they are immune. They are not immune if people stop buying Big Ag's food until it is properly labeled for GMO content. Either way, they are screwed. Right now, the American people are screwed. Unwitting Guine Pigs for GMO tinkering.

Monsanto's monopoly had reached the extent it has. The first and most important step is to end what is an obvious monopoly. I will be following the workshops next year with much more interest than before.

It sounds like you should find a workshop in your area that you can give input.

Thanks for your comments.

The recent appointment of Michael Taylor to the USDA does not bode well for the concerned masses of people to get anything other than obfuscation, lack of consensus, or another 5 years of foot dragging for the benefit of the industries involved in big agriculture.

The people are not being served, and Obama' has lost a great many supporters with his continuation of DLC Corporate friendly status quo.

I know that myself, as well as hundreds of my fellow contacts will never vote for Obama again. Statistically, this is a huge number that I think Obama believes Corporate sponsorship will reduce in significance, but the reality of the situation is that people are getting sick from these Frankenfoods, unimaginably cruel management practices, and the destruction of the family farm, and the transformation of agricultural land into a toxic hazard zone.

I'll be voting for Kucinich if he runs. The DLC can go prostitute themselves with the Military Industrial complex all it wants, but they are not getting anything else from me.

This is where I stand, and you can tell that I don't dance around political correctness like so many others here do. We cannot afford any more wasted effort to restablish "The Good Old Days" of NAFTA, Globalization efforts, and reduced accountability.

http://www.dailyyonder.com/obama-putting-anti-back-antitrust/2009/08/11/2280

Is Obama Putting the 'Anti' Back Into Antitrust?

ST. LOUIS — The room was filled. There were Nebraska hog raisers, corn farmers from Missouri, Colorado feed lot owners and ranchers from Wyoming. They were Republicans and Democrats, pro-life and pro-choice, church-goers and agnostics. The one thing they had in common is a belief that the markets for food and agriculture are dominated by a few big companies and, as a result, the prices paid to farmers and charged to consumers aren’t fair.

The members of the Organization for Competitive Markets have been denouncing big business for years. OCM has issued press releases and joined lawsuits. Their annual meetings have been small, however, and the organization’s influence has been weak. OCM has had few successes convincing a largely uninterested federal government aggressively to enforce antitrust laws and the rules governing market concentration in the livestock business.

Those times may be changing. “This is a narrow moment in history when a difference can be made,” Omaha, Nebraska, attorney David Domina said near the end of OCM’s annual meeting, held this year in St. Louis.

This moment arrived with last November’s election. The Department of Justice under President George Bush was slow to prosecute under long-standing antitrust laws. The Obama Administration, however, has promised stricter interpretation of those statutes. And the Democrats have shown a particular interest in competition (or the lack of it) in agriculture markets.

The Department of Justice and the Department of Agriculture announced last week that they will hold “workshops” to “openly discuss legal and economic issues associated with competition in the agriculture industry,” said Christine Varney, the Assistant Attorney General in charge of antitrust issues at Justice. And two top Obama Administration officials charged with enforcing antitrust and competition laws in the agriculture and livestock sectors came to speak to the farmers and ranchers at the OCM annual meeting.

...more...

thanks!

Oh that Obama... he's just like all the other centrist corporatists...
:sarcasm: