Monsanto: The Behemoth That Controls 90 Percent of Soybean ProductionMark Patterson in Marketplace, May 13, 2013
Chances are, there's soybean in your diet. You eat it directly, down soy milk with your coffee, or more likely eat meat that fed on crushed pieces of soy.
By far the dominant maker of soybean seeds is Monsanto. This morning the company won a unanimous case before the Supreme Court that threatened to undercut its market share. In other words, Goliath beat David.
Like Intel's dominance in the chip market, almost every soybean in America has Monsanto inside. Monsanto makes some 90 percent of soybean seeds sold. And the product patent means farmers have to buy them every year.
Today's case threatened to undo that. But antitrust scholar Mark Patterson of Fordham Law School says the ruling means the company keeps its market position.
"It gives it the freedom to continue to control year by year the sales of its products to farmers," Patterson says.
Once a chemical maker, Monsanto came to dominate the seed business over the past two decades.
Agricultural economist Neil Harl at Iowa State says, first, the company patented its Roundup herbicide and Roundup-ready seeds. Then, it acquired other seed producers. And as Harl sees it, Monsanto now impedes competition.
"Beating in the heart of every good capitalist is the heart of a monopolist," Harl says. "So we have to have rules, we have to have the economic police on the beat. Or we end up with concentration and that means higher prices."
By one estimate, farmers pay double for the Monsanto product, though some say it pays for itself in higher yields.
Now, patent protections do expire after 20 years, and Monsanto's Roundup Ready product effectively goes generic in 2014.
Still, that's the original, arguably obsolete version of the product.
"You're not going to buy a Commodore 64 in today's computer market," says Indiana soy farmer Ron Moore. "They just aren't going to make it because no one will buy it. That's what's going to happen to the varieties with the Roundup 1 herbicide tolerant traits in them."
Now, Roundup Ready 2.0 seeds are on the market.