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| I think most of the reasons for the RoundUp price increase have been addressed here. An interesting way to look at the situation is this: what would have happened if Monsanto didn't raise prices?
Imagine a scenario where generic Chinese manufactured glyphosate supply decreased amid rising fuel costs and new pollution controls being implemented due to the upcoming global Olympics and all the attention that will bring. Apparently, glyphosate prices in South America jumped considerably due to the reduced Chinese supply. This made it more lucrative for the Chinese to divert more glyphosate to South America from the US. Now, that in itself reduced US glyphosate supply. The generics raised their prices in the US.
Now, what would it say about Monsanto and RoundUp if Monsanto DIDN'T raise prices! First, there would be a shortage in the US. Second, the most price-sensitive customers (those who previously bought the generics) would now buy RoundUp and Monsanto wouldn't have enough RoundUp to supply it's loyal customers who see the extra value in buying non-generic. Now, not only is there still a glyphosate shortage, but Monsanto has a whole bunch of new customers who are only buying RoundUp because of the price and who aren't loyal customers. Finally, Monsanto would be sending a huge signal that RoundUp is inferior to the generics because it costs less. All those marketing dollars, RoundUp rewards, other loyalty programs would all go out the window because all of a sudden Monsanto's product is cheaper than the generics and that must mean it's worse in some way.
If you saw a box of Kellog's raisin bran sitting beside a box of generic raisin bran and the Kellog's was cheaper, I would think, "What's wrong with this Kellog's raisin bran? Is it old or stale or what?"
I agree that the article may have been spun in a way to sound positive...but it still just comes down to supply and demand. | |
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Roundup Prices - Real reason for price increases
