Monsanto itself was a little vague on the issue, telling Wall Street before the harvest troubles began to expect 15 million acres -- which included not only SmartStax but several much-less-important products. In the wake of the burgeoning yield problems with the upgraded corn seed, Isaac cut his estimate to 10 million acres of SmartStax from 12 million. In the event, analysts and other observers expect Monsanto to offer clearer guidance on 2011 earnings during its Wednesday conference call. The company had been calling for EPS growth in the mid-teens for next year. The consensus estimate among analysts covering Monsanto is a profit of $2.84 a share for 2011. Investors have grown ever more frustrated with Monsanto's topside management after what has become one of the agricultural giant's most challenging years in recent memory: A federal antitrust investigation. The rise of Chinese generic competitors that have nearly ruined Monsanto's herbicide business -- marketed under the brand name Roundup -- which the company profited massively from for decades. (The origin of its genetically modified seeds, after all, was to devise a way to create a plant that wouldn't itself die from the herbicide.) The rise of superweeds resistance to Roundup. At Monsanto's annual analyst and investor confab in early August, during which the company brings heavy hitters on a tour of some spot in the U.S. bread basket -- this year it was Nebraska, last year it was Iowa -- many attendees felt that the company had put the worst behind them. Sentiment grew positive. A press release describing the event said, "Monsanto Company executives will highlight promising early indicators for its Genuity SmartStax corn and Genuity Roundup Ready 2 Yield soybeans." The stock rallied a bit, along with agricultural names in general. But then the SmartStax yield results began emerging, and that bullish sentiment evaporated. Some investors have even started grumbling, sotto voce, about maybe the need for some kind of management shake-up; others have capitulated and removed themselves from the stock completely. Up until 2010, the company's problems had been mostly political, environmental, and philosophical -- not financial. Much of the controversy and criticism surrounding the company, in fact, had to do with its cash-cow nature: a profit machine in the business of building a monopoly in sci-fi food. But that changed this spring when growing numbers of farmers, frustrated by the company's strong-arm sales tactics and stiff premiums for its seeds, revolted. Monsanto was in the process of releasing its most important new product in years: a genetically modified corn seed branded as SmartStax. According to some farmers, the company didn't provide much in the way of data to support the yield claims it was making for SmartStax. When planters blanched at the high cost of the seeds, Monsanto relented, cutting prices in an effort to get more of its seeds in the ground. In so doing, management was forced to reel in the ambitious profit targets it had set for as far out as 2012.
Now, as the harvest rolls through the corn belt, the early yield results appear to have sparked something close to panic among Monsanto investors. With a fraction of the harvest in, SmartStax has underperformed both its predecessor Monsanto corn-seed product as well as that of the company's fiercest competitor in the seed field: Du Pont's ( DD) Pioneer. Stock analysts and other cooler heads have tried to bring some perspective to the conversation. "There's been some hysteria around the early results, but it's still too early to draw broad conclusions," Colin Isaac, of Atlantic Securities, has. Charles Rentschler, who was one of the first to sound the alarms about SmartStax this season, has noted that the purpose of the modified genes in the corn aren't to produce higher yields, per se, but to protect the plants against pests and dry conditions. Monsanto, in other words, has its defenders -- and its believers. Because sentiment on the company has swung so far to the negative side, some players could be looking for anything at all from the company to give the shares a bounce. "The bad news on this issue is arguably in the price now," Isaac said. -- Written by Scott Eden in New York >To contact the writer of this article, click here: Scott Eden. >To follow the writer on Twitter, go to http://twitter.com/ScottEden. >To submit a news tip, send an email to: firstname.lastname@example.org.