I got caught up in a cyclone of travel, meetings, and speechifying the last two weeks, so I’m a bit behind on the latest news in the food world. But I did take note of Andrew Pollack’s Oct. 4 New York Times story on the recent plight of genetically modified (GM) seed giant Monsanto, long-time Wall Street darling and bête noire of the sustainable food movement.

Pollack summed up Monsanto’s woes like this:

As recently as late December, Monsanto was named “company of the year” by Forbes magazine. Last week, the company earned a different accolade from Jim Cramer, the television stock market commentator. “This may be the worst stock of 2010,” he proclaimed.

On Tuesday, Forbes publicly lamented its decision to deem Monsanto “company of the year.” The headline was cutting: “Forbes was wrong about Monsanto. Really wrong.” How did Monsanto go from Wall Street hero to Wall Street doormat?

According to The Times’ Pollack, Monsanto’s troubles are two-fold: 1) the patent on Roundup, Monsanto’s market-dominating herbicide, has run out, exposing the company to competition from cheap Chinese imports; and 2) its target audience — large-scale commodity farmers in the south and Midwest — are turning against its core offerings in genetically modified corn, soy, and cotton seed traits.

I agree with Pollack’s diagnosis, but I want to add a third and even more fundamental problem to the mix: Monsanto’s once-celebrated product pipeline is looking empty. As I’ll show below, its current whiz-bang seeds offer just tarted-up versions of the same old traits it has been peddling for more than a decade: herbicide tolerance and pest resistance. Meanwhile, judging from the company’s recent report on its latest quarterly earnings, the “blockbuster” traits it has been promising for years — drought resistance and nitrogen-use efficiency — don’t seem to be coming along very well.

Why do I say that? In my days as a reporter covering the stock market, I read a lot of company financial reports. When a high-tech company like Monsanto disappointed Wall Street analysts with its financial performance, it would strain to draw attention to “next-generation” products that promised huge future returns to investors. But in its report on its disappointing quarter last week, Monsanto did no such thing. It gave zero details about next-generation seeds, and instead focused on its “revamped pricing approach.” Translated, that means that after years of constantly jacking up prices, the company is being forced to slash them to keep farmers interested. The loss of pricing clout is devastating for a high-tech company like Monsanto.

What gives? Why is the company that once ruled the Big Ag universe like Darth Vader now whimpering like a mouse?

Stuck in the mud

As Pollack delicately puts it, Monsanto “has been buffeted by setbacks this year.” The most famous one is the rise of Roundup-resistant “superweeds,” first in the south and then in the Corn Belt, that has forced thousands of farmers to reconsider the merits of Monsanto’s flagship Roundup Ready crop varieties.

Monsanto’s response has been to roll out its much-ballyhooed SmartStax corn seed, “stacked” with a mind-boggling eight foreign genes. Colluding with its arch-rival Dow AgroSciences — whatever happened to antitrust, again? — Monsanto loaded the new wonder-seed with multiple varieties of the toxic gene from Bt, a naturally occurring bacteria that had been used as a pesticide for years before Monsanto came along. Each of the Bt varieties in SmartStax targets a specific insect. To address the problem of Roundup-resistant “superweeds,” the SmartStax seed combines Monsanto’s Roundup Ready trait with Dow’s trait for resistance to its own proprietary herbicide, Liberty. Now corn farmers can douse their fields freely with not one but two broad-spectrum herbicides!

In a press release heralding the advent of SmartStax when it was still in development back in 2007, a Monsanto exec expressed the company’s hopes and dreams for the new product:

“By bringing together the two companies that have developed and commercialized the trait technologies widely used in agriculture today, we can provide farmers an ‘all-in-one’ answer to demands for comprehensive yield protection from weed and insect threats,” said Carl Casale, executive vice president of strategy and operations for Monsanto. “Farmers will have more product choices to optimize performance and protection, and that translates into a higher-yielding opportunity and a new growth proposition for their businesses and ours.”

But as I say above, SmartStax is just a mashup of various forms of the only two traits Monsanto has ever brought to market: herbicide tolerance and Bt toxicity.

And unfortunately for Monsanto and its once fat-and-happy shareholders, SmartStax corn is starting to look, well, not so smart. According to The Times’ Pollack, early data from this year’s corn harvest suggest that SmartStax is “providing yields no higher than the company’s less expensive corn, which contains only three foreign genes.” As a result, the company is having to slash prices on both SmartStax and its new soybean seed, cleverly called Roundup Ready 2 Yield. Oops.

The evident failure of SmartStax to deliver yield gains may be the straw that crushes Monsanto’s long-time claim that its products offer farmers dramatically higher yields than do conventional seeds. In a 2009 paper called “Failure to Yield,” Doug Gurian-Sherman, a senior scientist at the Union of Concerned Scientists, showed that since their public debut in 1996, GM traits have actually provided, at best, marginal yield gains — and in fact in some cases have caused yields to decrease.

So why is Monsanto merely rearranging and stacking up last year’s traits, and not rolling out new ones?

Tough row to hoe

Here’s what I think, from years of listening to industry critics like Gurian-Sherman and the Center for Food Safety’s Andrew Kimbrell: It is one thing to splice a particular trait like herbicide or pesticide resistance into the corn genome. You isolate the gene in an organism like Bt that kills insects, splice it into the corn genome, and watch it express itself.

But transforming a crop’s way of taking up water and fertilizer — the goal of engineering crops that can withstand drought and use nitrogen more efficiently — is infinitely more complex. These intricate processes developed through millions of years of evolution. They don’t involve a single gene, but rather groups of genes interacting in ways that are little understood. And as the Union of Concerned Scientists’ Gurian-Sherman told me in an interview, in the process of achieving a complex trait l

ike drought resistance, breeders often generate unintended traits, such as susceptibility to disease. These are known as “pleiotropic effects” — simply the idea that changing one aspect of a thing can create multiple, unpredictable effects. Pleiotropy is the scourge of GMO breeders looking to create the next generation of miracle transgenic seeds.

In his 2009 paper No Sure Fix [PDF], Gurian-Sherman shows that attempts to create nitrogen-efficient GM seeds that actually work well in the field have so far failed — and that conventional breeders have actually managed to generate significant gains in nitrogen-use efficiency in the field without resorting to transgenic methods.

In his Times piece, Andrew Pollack reports that Monsanto “hopes” to introduce another complex trait, drought-tolerance in corn, sometime in 2012. My experience as a business reporter tells me that if Monsanto execs were confident in their ability to do so, they would have trumpeted it in their dismal recent quarterly report.

From my perspective, what we’re seeing is signs that GMO technology is much cruder and less effective than its champions have let on. After decades of hype and billions of dollars worth of research, much of it publicly funded, the industry has managed to market exactly two traits. More devastating still, it has failed on its own terms: it has not delivered the promised dazzling yield gains.

As Monsanto execs scramble to win back their mojo with Wall Street investors — the lot that brought us the dot-com and housing busts in the past decade alone — the rest of us would do well to remember that the surest path to a bountiful future lies in supporting biodiversity, not in narrowing it away by handing the globe’s seed heritage to a few bumbling companies.