The USDA's approval last month for Monsanto to sell a genetically engineered variety of drought-resistant corn in the U.S. is raising hopes for increased production of the grain, but there are some skeptics of the product's potential benefits.

The USDA approved the variety last month after reviewing environmental and risk assessments, public comments and research data from the seed giant. The company has been developing the product for years in collaboration with German chemical firm BASF.

"Our drought system is designed to help farmers mitigate the risk of yield loss when experiencing drought stress, primarily in areas of annual drought stress," said Hobart Beeghly, U.S. product management leader for Monsanto.

In a statement, the company said it planned farm trials in the western U.S. Plains in 2012 to demonstrate the variety for growers and to generate data that will help guide Monsanto's commercial decisions.

Corn is the most widely grown U.S. crop and farmers grew 91.9 million acres of the feed grain this year, the second-largest area since World War Two.

In its 2009 petition for approval of its GM variety, Monsanto said 40% of crop losses in North America were due to sub-optimal moisture.

The major U.S. area for adoption of drought-tolerant corn would be the Plains, which produce one-quarter of the U.S. crop, Monsanto estimated, as well as similar dryland regions of Africa, Europe and Latin America.

The approval was expected and fills a market need in the dry western states, said Mark Gulley, chemical analyst for Ticonderoga Securities. The variety will likely be tougher to market in central Midwest states such as Iowa, the top corn producer, because they do not have repeated drought conditions, he said.

"It's a great niche product," he said.

Bob Nielsen, agronomist at Purdue University, said he will have a "healthy skepticism" about how much the product will help farmers until he sees the results of the upcoming trials.

Drought resistance may not have improved corn production significantly last summer because the crop came under stress from extreme heat, as well as dryness, he said.

"The impact of it will depend on exactly how tolerant it is," he said of the variety.

The Union of Concerned Scientists, a group wary of biotechnology, predicted the product would have little impact on output.

It will work best in areas of moderate drought and not be much use in severe drought, said Doug Gurian-Sherman, a senior scientist for the group. About 15% of U.S corn is grown in areas where moderate drought is a problem, he said.

"It's really a baby step, not a giant step forward," he said in describing Monsanto's drought corn.

Pending regulatory approvals, Monsanto anticipates launching the product as early as 2013-2014. The company said approvals for imports into "key corn import markets with functioning regulatory systems" were in progress.