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Non-GMO premiums on the rise this year
(Tuesday, June 10, 2003 -- CropChoice news) -- Peter Golbitz, Soyatech: Since the introduction of genetically modified soybeans in 1996, acceptance
of these seeds by U.S. farmers has been rapid, with some growing
implications in the marketplace now emerging.
According to the March, 2003 Prospective Planting report issued by USDA,
80% of U.S. produced soybeans will be genetically modified (GMO) varieties
this year, up from 75% in 2002, 68% in 2001 and just 17% in 1997. A net
result of this increased planting has been a sharply reduced supply of
non-GMO soybeans and a subsequent increase in premiums paid to farmers who
are willing to grow and segregate non-GMO varieties.
Although farmers appear to prefer growing genetically modified varieties,
soyfood and soy protein processors, both in the U.S. and elsewhere, who use
soybeans as a primary ingredient prefer to use non-GMO varieties to avoid
negative reactions from consumers.
A recent article published in the Japanese "Toyo Shinpo News" reported that
the premium being paid for non-GMO soybeans in Japan is now two to three
times higher than a year ago, or about $1.00 to $1.50 per bushel.
But, according to Jeff Pricco, Import/Export Manager at Knight Seed in
Burnsville, Minnesota, it has not been the demand for non-GMO from food
processors that has caused the price spike and short supply.
"Due to the recent run-up in price on the CBOT and firm basis levels," he
says, "many farmers, seeing a lack of non-GMO buying in the food markets,
have taken their beans to the elevator or crush markets."
Chip Daniels, President of Access Marketing in Eden Prairie, Minnesota,
sees a slightly different reason for the current short supply.
"Last year, much of the demand for non-GMO surfaced after harvest and many
of the non-GMO soybeans were co-mingled on farms or in elevators as there
was no incentive to segregate. This led to the shortage."
Now the incentive is there. Premiums being paid to U.S. farmers this year
for non-GMO varieties may be heading up by an additional $0.15 to $0.25 per
bushel, according to some estimates. Currently, the premiums being paid
range from $0.20 to $0.50 per bushel for conventional varieties, with
higher premiums for white-hilum varieties.
What does this mean for the long-term prospects for supply and prices for
non-GMO soybeans in the U.S.?
"As far as grower premiums go," says Dennis Strayer, General Manager of
Strayer & Associates in Hudson, Iowa, "they are just reaching levels that
will attract more growers. Premiums prior to this year have been marginal
as far as paying a grower enough to cover his extra costs of identity
preservation." | |
