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One of the arguments in favor of genetically modified seed is that it will increase yields. The world is filled with hungry people, the argument goes, and the way to feeding them is increasing yields. The evidence that new GMO seeds actually increase per acre yields is mixed. This week, Monsanto announced that its new Roundup Ready 2 Yield soybeans, planted on 1.5 million acres this year, boost yields 7.3 percent, on the low end of the company’s forecast.

The lagging yields is not helping Monsanto’s stock price. The company had been hoping that its new seed would add $1 billion in profit by 2012. Bloomberg reported, “Some investors are losing confidence in Monsanto after growers and seed distributors told OTR Global, a Purchase, New York-based research firm, that the new soybeans aren’t meeting yield expectations.”

“The shares will likely remain range-bound until the company addresses outstanding questions on Roundup Ready 2 Yield performance in 2009-2010 and pricing in both corn and soy,” Laurence Alexander, a New York-based analyst at Jefferies & Co., wrote in a report.

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