5 Reasons Monsanto Is Crashing And Burning
Powerful Monsanto is ruined. This news surrounded the globe this morning when it dirty jobs and plots came to light for the public.
Its shares dropped for 27% and the experts say that Monsanto has lost great amounts of money and has lost some markets.
The CEO of Monsanto said that they are quitting the sugar business and putting new saving measures to compensate for the lost. This will also lead to cutting jobs, decreasing the paychecks and cutting bonuses for their employees.
As Bloomberg reports this downfall is a result of the decline in world commodities prices and now Monsanto has to join hundreds others companies that are struggling to meat ends. This cost saving plan threatens to close around 2600 jobs and put in danger customers.
This agricultural giant which was leading monopoly on the market for years now will cut 12% of its working place and has a loss of 19 cents per share daily. This loss will continue even during 2016 and they don’t know even if they are going to make it through up to 2017.
Monsanto is leading business that owns the fields of corn and soybean in North America. During the years it has established a well trained monopoly where they owned everything from the farmers to the media and politicians.
The plan is made and the first steps are taken. All we can do now is sit and wait for news. Bloomberg reports that Monsanto is doing everything possible to combat the effects of the commodity price crash.
However, here are 5 real reasons Monsanto is tanking:
1. Consumer activism: The market doesn’t want herbicide-soaked genetically modified food anymore. As people are becoming more health conscious, they prefer to eat organic food. It’s really that simple.
2. Lawsuits with farmers: Monsanto spends untold resources suing family farms for copyright infringement. Farmers are forbidden from saving patented seeds year to year. Additionally when Monsanto’s GMO crops pollute neighboring farms, Monsanto sues those farms too. Not a great business model when your primary customers are farmers. An organic farmer in Australia is hoping to reverse this revolting practice.
3. Funding anti-labeling campaigns in multiple states is draining Monsanto of millions of dollars. This seems to be the majority of their “marketing” budget. They spent at least $8M in 2012, over $9M in 2013 in Washington State alone, and combined for $8M to defeat just a county initiative in Maui County Hawaii this past year.
4. Flagship product causes cancer: A recent World Health Organization report concluded that the active chemical used in Monsanto’s flagship product “Glyphosate is probably carcinogenic to humans.” This unsettling realization hasn’t even begun to sink in yet. Although some cancer-stricken farm workers are suing the big “M” over their illness with many more likely to do the same.
5. National bans: An increasing number of countries are banning either GMOs or certain pesticides, or both. At least 15 European Union members move to ban GMO crops. Meanwhile some small nations like Bermuda and Colombia have banned glyphosate.
To summarize, when people no longer want a product, market share and regulatory control mean nothing. This a long-term problem for Monsanto that can’t be fixed with cost-savings measures. That is why they’re doomed.