Some US farmers quit GMO seeds for premium niche
EXCERPT: Signs are emerging that demand for food made with non-GMO ingredients in the U.S. is increasing. In 2018, 35 percent of consumers between 18 to 34 were “aware and concerned” about genetically modified organisms, up from 25 percent in 2013, according to NPD Group, a research company.
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Pricey GMO soy seeds lose luster as farmers hunt for more profit
By Jeremy Hill and Shruti Singh
Bloomberg, 25 January 2019
https://bloom.bg/2TfrzG7
* Some U.S. farmers quit gene-modified seeds for premium niche
* Soybean futures languish amid bumper harvests, trade turmoil
For the first time in 15 years, Illinois farmer Steve Ruh will plant only old-school soybean seeds to boost profit in a premium niche market, abandoning the popular genetically modified varieties.
“Margins are so tight you are looking for anything you can to generate more dollars per acre,” Ruh, 50, said in a telephone interview from Sugar Grove, Illinois. Soybean futures in Chicago have slumped as much as 25 percent from a peak in March as China, embroiled in a trade war with the U.S., opted for Brazilian supplies following bumper crops in the Americas.
Ruh said he decided on the switch in November. He’ll seed his 1,500 acres (607 hectares) in April, joining growers seeking options in a premium market to boost slumping earnings and cut costs from pricier modified seed varieties. In 2018, U.S. farmers likely endured the fourth drop in net income in five years, while costs climbed 4.2%, government data showed.
The median price of a bag of soybean seeds with no genetic modification is $39, compared with the priciest GMO variety at $54, Kevin McNew, the chief economist at Farmers Business Network, said in a telephone interview, citing his firm’s study.
Aron Carlson, who grows corn and soybeans on 3,600 acres in northern Illinois, plans to use more conventional seeds this year while cutting back on the total oilseed acres.
“Tough times makes for survival of the fittest,” Carlson said in a phone interview from Winnebago County, Illinois. “You’ve got to start to look for different things.”
Signs are emerging that demand for food made with non-GMO ingredients in the U.S. is increasing. In 2018, 35 percent of consumers between 18 to 34 were “aware and concerned” about genetically modified organisms, up from 25 percent in 2013, according to NPD Group, a research company.
The domestic appeal of non-GMO products and organic food is attracting farmers, said Greg Lickteig, director of specialty grains at Omaha, Nebraska-based Scoular Co., a grain handler. Previously, demand for those crops was linked to Japan, the European Union and other overseas markets.
“Farmers are taking a renewed interest in non-biotech and non-GMO varieties of soybeans,” Lickteig said in a telephone interview. “It’s not just anecdotal. It’s real.”
Soybean Premiums
Clarkson Grain Co. has offered premiums to farmers as high as $2.50 a bushel over futures for certain non-GMO soybeans in the coming year. The interest from growers is increasing, Ashley Brown, a merchandiser at the Cerro Gordo, Illinois-based company, said in a phone interview.
Monsanto Co., now part of Bayer AG, developed the blockbuster weedkiller Roundup in the 1970s. Since the company started selling seeds to withstand the chemical in 1996, most U.S. corn and soybean farmers have adopted the technology.
Last year, 94 percent of the 89.6 million soybean acres in the U.S. had varieties of herbicide-resistant seeds. government data show. China is the world’s top soybean consumer, and Brazil and the U.S. are the biggest producers and exporters.
Ruh in Sugar Grove has sold about 50 percent of the soybeans from old-school seeds that he expects to harvest later this year with premiums of $1.50 a bushel over November futures. The price difference is enough to make the switch worthwhile, even if yields suffer from pests or weeds.
“We used to raise them all the time,” he said. “I am going back to how my dad raised soybeans.”