Monsanto Revives Wheat-Seed Development, Touts Technology

Monsanto Co. (MON) has revived plans to develop higher-yielding wheat seeds, five years after dropping the crop amid concerns that genetically modified varieties could hit U.S. exports.

The world's largest seed producer by revenue said Tuesday that it had acquired a U.S. wheat-seed developer as part of a long-term program to develop more drought-resistant strains.

The company will not try to develop GM wheat seeds resistant to its Roundup herbicide, a plan it dropped in 2004, though it will "explore herbicide-tolerant and disease-resistant biotech traits."

Hugh Grant, Monsanto's chairman and CEO, has in the past described wheat as "the poor cousin" in terms of research and development.

Investment, which can take $100 million and up to 10 years for a new crop variety, has paled next to the corn, soy, cotton and fresh-produce markets as rising demand from the developing world put pressure on farmers to boost yield.

Wheat consumption is more focused than corn and soy on human rather than animal consumption. Wider resistance to GM crops - notably in Europe - has in the past crimped interest from seed developers and farmers.

"The U.S. wheat industry has come together to call for new technology investment, and we believe we have game-changing technologies - like our drought-tolerance and improved-yield traits - that can meaningfully address major challenges wheat growers face every season," Monsanto executive vice president of global strategy and operations Carl Casale said in a statement.

Monsanto said it paid $45 million for assets of WestBred LLC, which specializes in wheat germplasm, the crop's seed genetic material.

Dow Chemical Co. (DOW) last month expanded its research into wheat seeds and traits for the first time, partnering with a plant-breeding company called World Wide Wheat.

Monsanto shelved efforts for a Roundup Ready wheat variety in 2004, citing a longer-than-expected timeframe to achieving commercial production and declining spring wheat acreage. The company had begun technical development of the variety in 1997.

Monsanto shares recently were up nine cents at $73.64.

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; [e-mail]

(Tom Polansek and Kerry E. Grace contributed to this article)