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Challenges for GMO Crops Are Significant but Temporary

We expect the public to gradually accept genetically modified foods despite slowing seed sales and see Monsanto as best positioned.

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Jeffrey Stafford: Sales of genetically modified seeds have slowed in recent years following nearly a decade of very rapid growth. And many are now left wondering: Is the GMO growth story over? More companies are labeling their foods "non-GMO"; many EU countries have banned GMO planting; and amid depressed operating results, which were partially driven by lower crop prices, M&A in the space has picked up.

The challenges for GMOs are significant, but, in our view, temporary. We find that GMOs have marginal yield benefits, but more importantly, they increase farmer incomes--a factor that will be important to adoption in emerging regions with poor farmers.

Jeffrey Stafford does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.