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Lancaster, OH | You might find that the SmartStax approach is designed to increase the available acres to plant--my speculation. If you look at refuge requirements in cotton, they are less due to two genes, not just one. Two genes in corn might (emphasize MIGHT) lead to the EPA and other governing bodies to lower the required area of refuge. This would open up 20% more acres for sales.
From a manufacturer's point of view, what value is that for a farmer? It would mean less planning, less implementation of alternative treatments, less documentation as well as less inventory management concerns from top to bottom.
I know we're picking on Monsanto here but does anyone remember that the big M lowered price on Roundup from $65 to $39.95 over two years in the early 1990's (I think about 1991) several years before Patent expiration? No question that pricing decisions begin with net income goals. You can charge more and sell less making more on each unit or sell more units making less on each one but the goal is the number at the end. With the Big M, that picture gets cloudy because you are looking at the total cost of the technology in the seed plus the cost of the chemical used. The more generic used, the more the pressure is on the technology for the income stream. The more share held by their brand of glyphosate, the less pressure is on the technology.
It is difficult in this business to discuss pricing as farmers have very little control on that--it's all around costs. With a manufacturer in a branded business, the pricing question is around "what is it worth?". Did it cost more to feed Albert Einstein for his life than to feed a factory worker? Because it cost about the same, did that make Einstein over priced or the worker under priced? Most of the time cost and worth are two very different things. Therefore you have an item like these technologies that you question why they cost so much but you can also look back and ask why a product is not around anymore. The answer is pretty much covered in how much it costs to make against how much is it worth.
Not looking for a fight, just sharing another perspective. | |
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Tech Fees & Competition
