Monsanto said it was on track for 20% growth in annual earnings despite a $200m fall in sales of crop sprays hurting second quarter profits.

The group, the world's biggest seeds company, said that earnings fell 3.3% to $1.09bn in the December-to-February quarter, helped lower by surging research and development costs and a 21.0% slump in herbicide revenues.

However, Monsanto said that the fall-off in herbicide revenues reflected in the main a return to the historical sales patterns, after US farmers last winter stockpiled sprays in the run-up to price increases.

"US orders have returned to previous selling patterns, with sales shifting back to third and fourth quarters," Monsanto said, adding that drought in South America had also hurt takings.

Year-on-year comparisons were also affected by a one-off $200m gain in 2008 from the settlement of a claim associated with Solutia, a chemicals firm spun off 12 years ago.

Monsanto said it remained on track to lift underlying earnings per share for the year to the end of August to between $4.40 and $4.50 from $3.64 a year before.

Its shares stood $1.27 higher at $83.01 in lunchtime trade in New York.

Record revenues

Overall revenues rose 8.3% to a record $4.04bn in the quarter, led by rises of 18.9% in sales of corn seed – Monsanto's biggest revenue earner -  and 35% in takings from soybean seed.

A strong gain in US seed sales was "somewhat offset by fewer planted acres for corn in Brazil because of drought conditions", the company said.