Non-GM soy -- high yields at low cost
2.Who's Benefiting from the Agriculture Bust?
1.Conventional soybeans offer high yields at lower cost
University of Missouri Delta Research Center, September 8 2008
PORTAGEVILLE, Mo. - Conventional soybean varieties are making a comeback. Lower seed and weed-control costs, price incentives at the grain elevator and yields that rival Roundup Ready beans have renewed interest in conventional varieties, said Grover Shannon, an agronomist at the University of Missouri Delta Research Center in the Missouri Bootheel.
In the 1990s, Monsanto introduced soybeans and other plants genetically modified to tolerate its popular herbicide Roundup (glyphosate). "Now there's a resurgence of interest in conventional soybean varieties. Farmers can grow them cheaper and they will yield just as well," Shannon said.
Shannon discussed his conventional-variety breeding program at the MU Delta Research Center Field Day, Sept. 2, in Portageville.
Overseas demand for non-genetically-modified soybeans and the tripling of costs for glyphosate herbicide have made conventional varieties more appealing to many growers, he said.
"Roundup costs went from about $15 per gallon last year to $40 to $50 per gallon," he said. "That was a pretty good shock to growers. So they got to comparing things, and saw the conventional system was just as cheap."
Many farmers already add a conventional herbicide to glyphosate for weed control due to the spread of glyphosate-tolerant weeds, Shannon said. "The conventional herbicide systems are about as cheap if not cheaper than using just the Roundup system."
Reflecting overseas demand, grain elevators have been offering a premium for conventional soybeans. Last winter, growers could go to some of the local elevators and get a contract for non-genetically-modified soybeans for a dollar or more over the Chicago price, he said.
Another draw is the ability to save seed from conventional varieties, Shannon said. With the proprietary Roundup Ready soybeans, farmers must purchase new seed each year.
"The fact is, if a grower grows conventional beans, he can save seed to plant the next year, and then he's not out the seed costs. That's the way all farmers used to do it," he said. "But with Roundup Ready beans, he's got to pay $40 or more for a bag each year."
The MU Delta Center has continued a conventional-soybean breeding program even as most private companies moved to an exclusive focus on Roundup Ready beans, Shannon said. Two years ago, the center released Jake and Stoddard, two conventional varieties that have attracted interest for their adaptability to many soil types and broad resistance to soybean cyst nematode.
"The cyst nematode situation has gotten worse because most varieties now trace to one genetic source," he said. "The Jake and Stoddard varieties trace to a different source that has more resistance. They also carry some resistance to root knot nematode."
These traits may help farmers expand their acreage and boost yields, Shannon said. "They respond to good management, like anything else. We've got a lot of farmers with soybeans that usually aren't put on the very best ground. But now that soybeans are commanding $15 a bushel, farmers are planting on better soils."
Farmers with a weed-control problem may want to continue with the Roundup system and plant their conventional varieties on cleaner fields, he said.
Shannon encourages growers to book their seed early. "Last year there just wasn't enough seed," he said. "This year there will be more choices. However, demand is still high."
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Story Source: Grover Shannon, 573-379-5431
2.Who's Benefiting from the Agriculture Bust?
Seeking Alpha, October 5 2008 [shortened]
The agriculture sector has come down a long, long way since its recent highs. Leading the way down has been a sharp decline in agriculture commodities. The price of sugar is down 25%, soybeans are down 30%, corn is off 35%, and wheat is leading the way with a 40% decline since euphoria took the agriculture markets to unsustainable highs last winter.
Remember the food riots”¦the rice trading maven, who took a dozen barges, loaded them with rice, and tried to corner the market...expectations that ethanol production would push an already tight corn market into the stratosphere ”¦the world was running out of food!
Or so everyone thought.
It was a great story. And it seemed like everyone got in on the act. Hedge funds were bidding up crop futures contracts. Food producers were hedging their bets to ensure they had raw ingredients. Agriculture reports were closely watched by mainstream media. Even Potash Corp (POT) had an estimated 25,000 unique visitors to its company website according to Quantcast.com (a little anecdotal evidence never hurts).
Like all great stories, it had to come to an end. Now, fertilizer stocks have plummeted more than 60% across the board, the seed companies like Monsanto (MOS) and Syngenta (SYT), and the farm equipment makers are well off their highs. And Potash Corp's web site traffic was cut in half.