Wednesday, August 19, 2009

I've heard of 'em now...

In an oblique reference in the WSJ (sorry - gated) a small "farmer" organization I had never heard of was featured as a cats-paw for feuding seed giants: The Organization for Competitive Markets (OCM)  Reading the leadership list, I did know a few of the principals. 

Anyhoo, it would seem that the brawl developing between Monsanto and DuPont is being played on multiple levels, including member organizations. 

OCM, a nonprofit based in Lincoln, Neb., has forged a reputation over the last decade for taking on big agriculture on behalf of small farmers and consumers. It filed congressional testimony and went to court to fight meat company JBS Swift's purchase of National Beef and Smithfield Beef in 2008. It opposed Whole Foods Inc.'s purchase of Wild Oats two years ago.

More recently, the company has started the "Seed Concentration Project" to put heat on Creve Coeur-based Monsanto, claiming the company controls 90 percent of the market for genetically modified seed.

OCM's stance on Monsanto isn't news to the farmers, academics and government officials expected to attend or speak at today's conference on competition in agriculture — a list that includes senior representatives from the Federal Trade Commission, Department of Justice and Commodity Futures Trading Commission.

But what many of them probably don't know is that the group is backed by Monsanto's archrival, DuPont, a corporate Goliath in both agriculture and chemicals.

"We've supported OCM for a number of years as we have dozens of organizations that are aligned with our belief around what's in the best interest of our farmer customers," said DuPont spokesman Dan Turner. "However, we don't disclose the amount that we give to OCM or any other organization." [More]
I don't have any real problems with this (and this is hardly the first example), but it should be an important indicator to producers how much weight farmer-endorsement appears to carry in public relations.

Farmers are generally well regarded and trusted (or at least, have been) and my concern is not to sell this credibility cheaply or shortsightedly.

But I gotta believe - especially after listening to the Cargill market experts several times this week - that the upcoming income/cost crunch for grain farmers is going to play havoc with margin expectations in the seed industry.  $300+ corn is going to be tougher to sell with corn below $3.  Soybeans may be the target this year, however.
“Farmers are our friends” was the response from Monsanto spokesman Lee Quarles following last week’s meeting held by Organization for Competitive Markets in St Louis, where the issue of agricultural market concentration drew the attention of farmers and government regulators. 
Since then, Monsanto announced that seed prices are going up again, based on demand. Of course, anytime someone controls most of a market, demand is always good for them. 
Monsanto said that seed prices are headed to about $74 for an acre of Roundup Ready 2 soybeans, a price hike of as much as 42 percent. (Monsanto explains it’s really not that much.) [More]
The troops on the front lines of the battle for seed market share could take pretty heavy fire.  I think I'll keep an eye on OCM and check their casualty list.


Anonymous said...

Did you notice that one of the aims of the Organization for Competitive Markets is to "avoid capitalism"? That's what they say on their home page at

I'd think it would be hard to represent farmers and be against capitalism at the same time.

John Phipps said...


I did notice that phrase, although it struck me as either an error or non-sequitor in the full context:

"OCM is a membership-based research and advocacy organization. We are the only national think tank focusing strictly on antitrust and trade policy in agriculture. We are "pro-business" because we believe in free markets and the law of supply and demand to allocate resources properly. We are "conservative" because we believe American values such as honesty and morality should be demanded of our businesses and politicians. We are "liberal" because we believe government has a regulatory role to create and enforce the rules of doing business, thereby avoiding capitalism. We are "populist" because we have determined our nation is made economically and culturally wealthy by preserving the ability of independent families to produce our food without fear of the economically dominant firms in agribusiness."

If you are free trade and free market, how can you support government action to "avoid capitalism"? Either they are using a very narrow, pejorative definition of capitalism that doesn't ring a bell with me, or the sentence makes little sense.

Maybe it has to do with rewards accruing mostly to capital vs. labor?

Ya got me.

Anonymous said...

Anyone that promotes free market competition should applaud OCM. They have worked in obscurity for a long time while many agribusinesses has violated all rules of competition and free market capitalism with no threat from government enforcement. The seed industry needs to be restructured to counter what we face now in terms of seed prices. Seed companies have use politics, propaganda, government cronyism and academic intimidation to corner the market. I will never understand farmers who speak for business practices that restrict agribusiness competition and raise their OWN input prices or lower their selling price. Our fathers of the WWII/stockyards generation wouldn't understand either. Doesn't today's generation understand, are they just stupid or are they just rigid ideologues who can't adjust their narrow thinking and understand what the last generation easily understood? Competition in agribusiness is good! The more the better. I hope OCM and Dupont have success in their efforts. After the seed industry, OCM can work on the processors of ag commodities. Sorry John but that includes Cargill.