Monsanto (NYSE:MON) Unveils 2012 Pricing Strategy

Monsanto (NYSE:MON) appears poised for a profitable 2011, as a strong planting season is expected, and more pricing power afforded them because of the profits farmers enjoyed in 2010, which will translate into more orders.

Last season Monsanto endured complaints on the price of seed early on, as farmers were strapped for cash in a tight lending environment.

Now they are flush with cash, and more willing to pay Monsanto's asking price for seeds.

As for the 2012 planting season, Monsanto said they're probably going to introduce about 25 percent of their seed portfolio as new higher-yielding hybrids, which they will be able to garner a premium price for.

At the same time they're planning on retiring about 25 percent of their older hybrids to create a more profitable mix. The price differential could be as high as 30 percent between the two seed types.

Farmers also seem to want an option over just the premium-price seeds, as evidenced by DuPont (NYSE:DD) winning market share last year in some seed segments, asking farmers the simple question of whether the higher prices of Monsanto's seeds are worth the extra traits. A number of farmers said no, and gravitated to DuPont.

Monsanto closed Tuesday at $72.18, up $1.06, or 1.49 percent.