According to a story in today's New York Times, American sugar beet growers have committed to planting a genetically modified strain that will allow them to control weeds via use of Scott Miracle-Gro's (NYSE:SMG) Round-up product. The farmers expect that the Monsanto-developed beet will lower their production costs by eliminating hand-weeding and increasing yield.
Expect this to trigger another round of public controversy about genetically modified crops, held in great suspicion by world markets. Although the product was approved by the U.S. government in 2005, reluctance among manufacturers to contend with public distrust of modified foods led growers to hold back on adoption.
Look for this issue to raise other sugar-related discussions, including U.S. and E.U. price supports and the lack of free access to these markets by third world sugar suppliers, and the environmental cost of cane sugar growing practices. If Monsanto (NYSE:MON) can overcome these objections, it will represent another major step in cultivating acceptance for other genetically modified crops, which would bode well for the company's future.
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