U.S. grain merchants paying up for non-GMO crops
Wire Service: RTbr (Reuters Business Report)
Date: Tue, Sep 7, 1999
Copyright 1999 Reuters Ltd. All rights reserved.
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By Doris Frankel
CHICAGO (Reuters) - Grain merchants in the U.S. Midwestern Corn
Belt said Tuesday they have started paying a premium for export-bound
soybeans and corn that have not been genetically altered, despite the higher
storage and handling costs involved.
"We are in the process of working on it right now," said one grain
merchandiser in the northern Midwest. "Bids for non-GMO (genetically
modified organism) cash soybeans are generally structured at about a
10-cent premium. It would be new-crop beans," from this year's harvest.
"We are trying to keep up with end-user demands," said the
merchant, who like others declined to be identified.
The value of GMO food crops is a sensitive issue as harvest
approaches in the Midwest. Plantings of the crops have expanded rapidly in the past
three years. About 35 percent of this year's U.S. corn crop and 55
percent of U.S. soybeans are genetically modified, industry sources estimate.
But a rising storm of protests from European consumers about
potential health and environmental effects of GMO foods and crops has prompted
caution by many grain exporters.
Although more than 30 GMO crops have been approved for use in the
United States, the U.S. grain industry was shaken last week when Archer
Daniels Midland Co., a top exporter and processor, formally warned its
grain suppliers to keep GMO crops separate from conventional ones.
"I have heard anywhere from 8 to 15 cents (a bushel) premium on
corn and 20 to 30 cents for non-GMO soybeans," a grain merchandiser in the
western Corn Belt said.
"We are not sure what we are going to pay yet," he said. "We hear
the end-user is paying 12 to 15 cents or more on corn and 30 cents on
soybeans," he said.
The merchandiser noted that foodmakers overseas now appeared to
want to label their finished products as non-GMO.
"Consumers in Europe and in some parts of Asia, particularly Japan,
are willing to pay more for those type of crops," the merchandiser said.
In the eastern Corn Belt, one Indiana merchandiser said he was
posting a 10-cent premium for non-GMO corn and soybeans. "The beans are for
harvest period and the corn is for January through April," the merchandiser
said.
One type of soybeans known as Synchrony Tolerant Soybeans (STS),
produced by DuPont Co., is already earning from 20 to 30 cents per
bushel premium at Consolidated Grain and Barge Co. over the genetically
engineered soybeans such as the "Roundup Ready" variety produced by Monsanto Co.,
said John Haas, a merchandiser at CGB Market Development.
STS soybeans are bred to resist the Synchrony herbicide also
produced by DuPont, while Roundup Ready soybeans were engineered with a gene to
resist Monsanto's popular Roundup herbicide.
Haas said his company has been paying a premium of 20 to 30 cents a
bushel for STS IP (Identity Preserve) soybeans and that last year CGB
paid more than $3 million in farmer premiums for specialty grains.
"We will be paying premiums for various types of non-GMO beans. But
the premiums are determined by the local elevators and in accordance
with regular supply and demand and location. There are a lot of variables,"
Haas said.
With the harvest coming up, the biggest problem many elevators face
now is how to certify soybeans and corn that are not genetically
altered.
"How do you test it?" a merchandiser said. "The machines are not
available yet. You need to test genetic traits on the soybean or corn.
You can't take some guy's word for it."
REUTERS