Friday, November 09, 2007

Genetically modified markets...

I just contracted some non-GMO corn for a $0.45 premium for Mar 09 delivery. My thinking is I was going to grow this stuff for refuge anyway, despite my growing conviction that refuges are a temporary farce playing out until in-the-bag refuge is on sale in a couple (?) of years.

Still, right now this means a possible price of $4.70 for a hybrid that did just as well as the triple-stack next to it this fall. For a guy who will deliver some $2.60 corn* next spring it looks like all the money in the world.

Frankly, I was surprised by the premium, but it may not be enough. According to my source, guys are in love with GM numbers and feel the yield increase is to great to give up. Of course, they may also be umm, minimizing their refuge or at least not planting it in blocks to be more easily segregated.

One other factor. Most of us are wondering why we built so many 30' bins just a few years ago. Having a reason to use separate storage facilities at least makes me look a little less foolish.

All this is a market response to the ungrounded fears of GM technology. It points out the market places a very high price on verifiable truth, or at least extracts a huge price to ignore it.

I have read complaints about GM technology adoption here is handing $5 non-GM corn sales to Brazil. This is backwards thinking. The non-GMO premium is a growing indicator of the power of this technology and the rational decision by growers and users alike to utilize it. The thing to watch is how high that premium has to go to originate some corn (or put differently, pry the triple-stack bag out of growers hands) - and whether that number flies with consumers.

GM technology is as safe as other seed technology. The more crops we grow, the more data is accumulated, and the stronger the case for negligible odds of bad consequences. Other science observers are agreeing:
There can be little doubt that GM crops will be accepted worldwide in time, even in Europe. But in delaying cultivation, the anti-GM lobbies have exacted a heavy price. Their opposition has undermined agrobusiness in Europe and has driven abroad much research into plant biotechnology—an area in which Britain formerly excelled. Over-regulation may well cause the costs of the technology to remain higher than they need be. Above all, delay has caused the needless loss of millions of lives in the developing world. These lobbies and their friends in the organic movement have much to answer for. [More of a great article]
I disagree that non-GM opponents have "much to answer for". There is no need for vindictiveness as the market sorts out winners. Taunting concerned consumers doesn't help change minds. The point is science is winning - in its usual non-exciting, blind-testing, peer-reviewed (yawn) way.

The best "revenge" against the anti-GMO forces is simply to move on with our work, maintaining the standards of scrupulous care for our work and world.

*Back in the day, I contracted in the Cargill grain bin program [to which I would gladly link, 'cept it's gated] and locked in at $2.60. It seemed like a good idea at the time. This is the last year of the 3-year agreement.

Thank God.

And I do have a berra, berra nice bin.


Anonymous said...

I agree there is no reason for vindictiveness between the GMO non GMO camps. I find it very strange that " the needless loss of millions of lives" is attributed to GMO foes. Lack of food should be attributed to the rightful source. Warlords, dictators, politics, and self servinging governments. How GMO crops could change these conditions or natural disasters is beyond me. There will always be people afraid of technology, just as there will always be companies rushing new undertested technologies onto the market place. Using starving people is a scare tactic just as is much of the anti GMO jargon. No one wins in this type of exchange. However, if a company offered a technology which would allow production to double with one half the inputs, most of us as farmers would jump on it. But would it help us or hurt us in the long run? Who would stand to benefit the most when the "dust has settled"?

John Phipps said...


I'm not sure where we lost the habit of civil debate, and decided to go for the jugular in every public disagreement. I think it may hearken back to the Willie Horton ad - although admittedly, attack politics were common enough. But sometime the emerging public relations industry fixed on in-your-face confrontation. I think like you, this will backfire on biotech companies like Monsanto, which is already keenly aware of resistance based on a perception of arrogance. I wonder if this is another unfortunate aspect of focusing too tightly on next quarter's results.

Rapid rises in productivity are less troubling to me. Industrial agriculture must consolidate sufficiently to gain leverage in the marketplace, and this trend seems to continue despite technology, policy or culture.

The good news is the emergence of an agrarian sector that places much less value on productivity, and hence offers futures for many more farmers.

Thanks for your thoughtful comments.