Monsanto Looks to Sell Dairy Hormone Business
By ANDREW MARTIN and ANDREW POLLACK
Published: August 6, 2008 -
After struggling to gain consumer acceptance, Monsanto on Wednesday
announced that it would try to sell its business of producing an
artificial growth hormone for dairy cows. The company will focus
instead on its thriving business of selling seeds and developing ways
to improve crops.
The decision comes as more retailers, saying they are responding to
consumer demand, are selling dairy products from cows not treated with
the artificial hormone.
Wal-Mart, Kroger and Publix are among the retailers that now sell
house-brand milk from untreated cows. Almost all of the fresh milk
sold by Dean Foods, the nation’s largest milk bottler, also comes from
cows that were not treated with the artificial hormone, a spokeswoman
Monsanto officials said the decision was not related to the retail
trend and that business for the artificial hormone, sold under the
brand name Posilac, remained brisk. Monsanto, which is based in St.
Louis and is the only commercial manufacturer of the hormone, declined
to provide sales numbers.
Selling Posilac “will allow Monsanto to focus on the growth of its
core seeds and traits business while ensuring that loyal dairy farmers
continue to receive the value of Posilac in their operations,” Carl
Casale, Monsanto’s executive vice president for strategy and
operations, said in a statement.
The growth hormone, approved by the Food and Drug Administration in
1993, was one of the first applications of genetic engineering used in
food production. When the artificial hormone, which is made in
genetically modified bacteria, is injected into cows, it increases
milk production by about a gallon a day. A 2007 survey by the
Department of Agriculture said 17 percent of the nation’s dairy cows
were receiving it.
Despite the government’s approval, many advocacy groups have long
maintained that Posilac is bad for the health of cows. Some even claim
it could pose a cancer risk in people, though little scientific
evidence has emerged to support that view. Their concerns have been
fueled by the refusal of many countries, including Canada and members
of the European Union, to permit the use of the hormone.
“I think they saw the handwriting on the wall and gave up,” said
Andrew Kimbrell, executive director of the Center for Food Safety, a
consumer advocacy group based in Washington. “It’s a major victory for
Mr. Kimbrell said the original idea of marketing a growth hormone for
milk production was flawed because milk is so emblematic of childhood.
Fear of the effects of the artificial hormone was one of the primary
drivers behind the growth of the organic dairy industry, he said.
But Elena Gonser, a dairy farmer in Everson, Wash., contended that
consumers had been misled by misinformation. She added that Posilac,
which is also known as bovine somatotropin or BST, was safe and
“I believe it’s just catering to ignorance to tell people it’s BST-
free, and it’s better for you,” said Ms. Gonser, who along with her
husband runs a farm that has 70 cows.
But she added: “I’m not surprised to find they want to step back from
it. It’s gotten a bad rap for so long.”
Monsanto’s announcement comes after a year of pitched battles over
labeling on dairy packages. A year ago, Monsanto tried unsuccessfully
to persuade federal officials to crack down on labels that say the
milk has been produced without the hormone, arguing that milk from
treated cows was the same as that from untreated cows.
In the months since, a Monsanto-backed advocacy group and a handful of
dairy organizations have struggled to have similar laws or regulations
passed at the state level. In Pennsylvania, for instance, the
secretary of agriculture banned the labels, only to have his order
overturned by the governor amid a consumer uproar.
Monsanto will continue to sell and market the product until a buyer is
found, said Christie Chavis, who leads commercial development and
strategy for the company’s animal agriculture business unit. Posilac
is sold in 20 countries.
Ms. Chavis said that the artificial hormone was safe and also good for
the environment, saying that it takes fewer cows and less resources to
produce the same volume of milk.
Jim Werkhoven, a dairy farmer in Monroe, Wash., said he was
disappointed when he learned of the move on Wednesday from a Monsanto
industrial relations executive.
“I certainly understand from a business perspective why they may be
doing this,” he said. “At the end of the day, the customer is going to
be the one that sets the rules, and at the end of the day, it’s going
to be the customer that pays the price.”