BASF and Monsanto have announced an expansion of their joint efforts to develop higher-yielding and stress-tolerant crops to include a fifth crop, wheat. In addition, the companies are increasing their investments in the collaboration, reflecting the strong leads and commercial prospects in the collaboration's early work. The collaboration that was established in 2007 includes the following crops: corn, soy, cotton and canola. In the original collaboration, the two companies dedicated a joint budget of potentially $1.5 billion; the new agreement will result in a potential additional investment of more than $1 billion by the companies over the life of the collaboration.

The terms of the original collaboration continue, with each company maintaining independent trait discovery programs, nominating from those programs specific candidate genes to advance for accelerated joint development. Projects will be jointly funded through each phase of development, and products that emerge from the joint development will be commercialized by Monsanto. The profits associated with commercialized products will be shared, with Monsanto receiving 60% of net profits and BASF receiving 40% of net profits.

With regard to the addition of wheat to the collaboration, the partners will initially focus on developing biotech products for the North American and Australian markets. The first enhanced yielding wheat product is expected to reach the market after 2020. This product will be followed by successive generations of higher-yielding wheat varieties.

Wheat is the world's second largest commodity crop after corn and demand is expected to grow as millions of people in developing countries such as China and India become more affluent and increasingly add bread to their traditional rice-based diets.

Around 2012, the companies expect to introduce the world's first genetically modified drought-tolerant corn, pending regulatory approvals. Drought-tolerant corn, the first product emerging from the companies' joint pipeline, is designed to provide farmers yield stability during periods of low rainfall by mitigating the effects of water scarcity on corn plants. Field trials for drought-tolerant corn conducted in the Western Great Plains met or exceeded the target yield enhancement - an increase of roughly 7-10 bushels per acre over the average yield of 70 to 130 bushels per acre in some of the key drought-prone areas in the U.S.