Monsanto shares slipped 6% after the seeds and sprays giant warned that falls of up to 50% in demand for its Roundup herbicide would knock profits and slow growth next year.

The group said that it was revising its Roundup strategy after strong competition from lower-cost alternatives, combined with a slow planting season, left end-May US applications down 50%.

"Generic and other branded competitors continue to aggressively move larger-than-expected volumes of lower-priced material into the marketplace," the group said.

Global supplies of glyphosphate herbicides, of which Roundup is one, now exceeded demand.

'Hitting its peak'

Monsanto cut its estimate for gross profits from Round-up by $400m to $2.0bn for its financial year, which runs to the end of August, as well as its long-term hopes for the brand

"We predicted that Roundup was hitting its peak in terms of gross profit contribution this year, and that forecast has proven to be accurate, albeit at a lower level than we originally forecast," the group said.

Hugh Grant, the Monsanto chairman and chief executive, said the group was now looking at how best to manage Roundup operations "in a way that optimises returns at a lower percentage of overall revenue".

He added: "That process inherently will slow our overall growth in 2010."

Analyst forecasts

Monsanto said that group earnings for the March to April period would come in at $1.15 per share, well below analysts' forecasts of $1.58 a share, according to Reuters data.

However, thanks to stronger earnings from its seeds business, Monsanto's full-year profits would fall within the $4.40-4.50 a share spread the group had previously guided to, if at the bottom of the range.

Analysts had pencilled in a $4.62-a-share figure.

Monsanto shares closed down $5.37, or 6.3%, at $79.88 in New York.

The warning also dragged shares in some rivals lower, with stock in Switzerland's Syngenta ending down 4.4% at SFr258.00.