Piper Jaffray Comments On Monsanto Ahead Of USDA Beet Ruling

Following the deregulation of roundup ready alfalfa last week, Piper Jaffray believes that the USDA will grant provisional permits to allow the planting of genetically modified sugar beets in 2011. This would be a positive for Monsanto MON. Though it is difficult to determine how many beet acres the provisional permits will cover for the upcoming growing season, Piper Jaffray sees a potential for $0.01 - $0.02 of upside to its FY11 numbers from biotech beet and alfalfa. The impact is much more significant in FY12 and beyond, however, and it believes beets represent a $200 million revenue opportunity. The impact of the decisions on beets by the USDA will be more fully expressed in FY12 earnings. The final draft of the sugar beet Environmental Impact Statement & public comments are due May 2012, which will enable growers to plant biotech seeds in the 2012 planting season. It expects nearly full penetration in the first season of availability based on conversations with beet growers in the upper Midwest and their favorable view of the impact of roundup use on their beet yields. Piper Jaffray Maintains an Overweight rating and $95 PT on MON MON closed Friday at $71.54