Reap What You Sow

My warning was an understatement, to put it mildly. Monsanto, branded as the purveyor of "Frankenfoods," found itself at the center of a global backlash that reached its apogee in Seattle in late 1999. Robert B. Shapiro, then Monsanto's chief executive, was widely reviled, and Monsanto was driven into a 2000 merger with Pharmacia, which spun off Monsanto’s agricultural operations two years later. Pfizer (PFE) bought Pharmacia in 2003 largely to gain control of the now-tarnished blockbuster drug Celebrex that Pharmacia inherited from Monsanto.

Did all that happen in just six years? Monsanto is again a stand-alone bioagricultural concern, headquartered as it was before in St. Louis. Many of the antibioactivists have either retreated or jumped to newer, more fashionable causes, and mention of Monsanto is no longer the conversation-stopper it once was. Slowly but surely bioengineered seeds have gained acceptance around the globe (though not by the fiercely protectionist European Union) without any proven adverse effects on human beings. Meanwhile, genetically fortified crops, such as vitamin-enhanced "golden rice," have improved nutrition in some of the poorest parts of the world.

True, Monsanto still has its detractors, and I'll no doubt hear from many of them as I do every time I say something nice about either Monsanto or genetically modified seed. But this is an investment column, and the bottom line is that Monsanto is finally recording some terrific financial results. Just this week, the company increased its first-quarter earnings guidance and said its full-year 2006 earnings would be near the upper end of its earlier guidelines. As recently as March 2003, Monsanto was trading near $14 a share. This week it was nearing $80.

The agricultural sector is often ignored or dismissed by analysts clustered on the two coasts, but agriculture remains this country's biggest export. Monsanto is also a high-tech concern, making excellent use of its formidable intellectual capital by plowing 10% of its revenues into research and development. While pharmaceutical companies have been struggling to find new blockbuster drugs, Monsanto has a string of exciting new products either in the pipeline or already on the market.

Monsanto has been relatively quiet about some of these, no doubt chastened after its earlier ambitions were greeted with global protests. But how can anyone seriously argue with better nutrition, healthier lives, greater longevity and better productivity, especially in the many countries where people risk starvation? Among the most promising products in the Monsanto pipeline are cold- and drought-tolerant corn, soybeans and cotton, which have the potential to greatly expand the growing regions of the world in addition to boosting productivity in the U.S., and modified soybeans containing dramatically higher concentrations of beneficial omega-3 oil.

Yes, these are all bioengineered crops, which means I'm going to get plenty of hysterical arguments about why they pose a threat to the planet. I don't pretend to be a biology expert, but if they satisfy regulatory agencies and yield the health and productivity benefits they promise, then they're going to be very profitable for Monsanto, and deservedly so.

I can see why so many readers brought these to my attention. In my view, I bonds offer an attractive alternative to five-year or longer maturity CDs and Treasury notes, largely because of their flexible redemption feature. Their current yield is substantially higher than five-year CDs, and owners have the option of holding them for as long as 30 years. And should interest rates really shoot up, they can be redeemed even earlier as long as holders pay the penalty, which is three months' worth of interest. Should inflation rise, so will I bonds' interest rates.

All in all, the government is offering us an unusually attractive package, one I plan to take advantage of. So thanks to all of you who wrote with this suggestion. More information about the bonds, including how to buy and redeem them, is available on the Bureau of the Public Debt web site.