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Published byMerry Lambert Modified over 9 years ago
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GM vs CONVENTIONAL A PRODUCTION ECONOMIC PERSPECTIVE By: Dr. Duane R. Berglund Professor of Agronomy North Dakota State University
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2003 GM Planting Intention
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GM Crops in 2003- % Acres USA Soybeans 81 Corn 40 Canola 72 Cotton 73 North Dakota Soybean s 74 Corn 35* Canola 72 Cotton 0 *Estimate
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GM Production Economics Agronomic costs Segregation expenses Competing Commodities Market impact and risks associated
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Agronomics and $$$ Are Yields Increased? Costs of Input ( Seed and Chemicals) Cost or benefits for GM crop in rotation/crop sequence/field separation Control cost of volunteers Pest Resistance-Weeds or Insects Technology fee No Farmer saved seed allowed
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2002 -Soybean Performance - ND Type North Red River Valley* South Red River Valley** Ave. Bu/A% YieldAve. Bu/A% Yield Conventional 46.6 (27) 91 %45.5 (26) 100 % Roundup-Ready 51.5 (78) 100 %44.1 (80) 97 % * Locations: Arthur, Grandin and Northwood ** Locations: Wyndmere, Mooreton and Great Bend
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2002- Corn Performance North Dakota OakesBarneyFargo TypeBu/A Trial Average 171133146 BT173 (24) 135 (20) 161 (26) RR172 (18)- 151 (24)
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GM Canola vs. Conventional
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Average Canola Yields at Langdon- 2002
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2001 & 2002 Average Canola Yields at Carrington
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Farmer Economic Concerns with the Use of GM Crops Seed costs – Technology fee or not? Chemical cost vs. alternative chemicals Application costs (spraying or tillage) Crop yields equal or not Weeds controlled Market acceptance of GMO’s Bin-Run Seed –not an alternative
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Soybean Technology Fee: 2003 and prior- $8.00 per 50 lbs. (bag) 2004 – Increased fee- $10 per bag. 50 lb bag of soybeans has approximately 150,000 seeds per bag. With germination of 90%, Seeding in narrow rows of 175,000 live seed per acre would require 194,500 seeds, or 64.5 lbs. seed. Tech fee cost per acre then would be: $12.96/A.
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Soybean Economics Public-(Conv.)Private-(Conv.)Roundup Ready $ Seed/A (175,000/A) $10.80$19.44$20.73 Technology Fee--- $12.56 Herb. PPI* Herb. Post** $5.25 $11.50 $5.25 $11.50 ($5.25) $10.00 Roundup Seed + Herb. Totals $27.55$36.19($48.54) $43.29 Seed Cost -Public - $10.00/bu Private - $15.00/50 lb bag R.R. - $16.00/50 lb. Bag Tech. Fee -R. R. Soybeans - $10.00/50 lb. Bag *Trifluralin – PPI Seed Used: 64.8 lbs.(175,000) live seed **Raptor-Post
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Corn Technology Fees RR Corn- $24.00 per bag* Bt. Corn Borer- $18.00 per bag Bt. Corn Rootworm - $18.00 per bag Liberty Link Corn- No Tech fee!! * 80, 000 seeds per bag- Will plant 2.5 to 4 Acres
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Corn Economics ConventionalLiberty LinkRoundup Ready $ Seed/lb$1.10/1000$1.25/1000$1.20/1000 $ Seed/A$29.33$33.32$32.00 $ Insect Control($12.00)$6.00 (BT) Tech. Fee Roundup Ready --- $8.00 Roundup Ready Herb. PPI** Herb. Post*** $10.00 $12.00 $17.00 (Liberty) $10.00 (Roundup) Seed + Chemical($63.33) $51.33 $56.32$56.00 Seed Corn – 80,000 seeds/bag – 3 Acres/bag – (26,600 seeds/A) B.T. Fee - $18/80,000 seed bag - $6.00/A-26,600 plant pop. R.R. Fee - $24/80,000 seed bag - $8.00/A-26,600 plant pop. Or $6.00/A 20,000 plant pop. *PPI Herb – Surpass **Accent + Banvel + Atrazine + MSO
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Canola Technology Fee RR Ready Canola- $15/A planted plus the farmer receives 1 pint/A free of Roundup RT Liberty Canola- No Tech Fee!! Clearfield Canola- Not a GM crop, No Fee!
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Canola Economics ConventionalLiberty LinkRoundup Ready $ Seed/bag (50 lbs) $105.00$130.00 $ Seed/A (5 lbs)$10.50$13.00 Helix Xtra$8.00 Tech. Fee/A*--- $15.00 (Includes-1 pt. Round-Up) Herb. PPI** Herb. Post*** $6.00 $8.00 $17.00 (Liberty) Round-up $5.00 Totals- Chemical/Seed $31.30$38.00$41.00 *Roundup Tech. Fee - $15.00/A – Includes 1 pint Roundup Ultra RT **Trifluralin PPI ***Assure II – post applied, or 1 pint additional Glyphosate
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Segregation/Testing in Practice Malting Barley- 100% of malting barley is segregated and marketed by variety Dry Edible Beans by Class/Var.
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Examples of Identity Preserved Grains Soybeans High oleic High sucrose High protein White wheat Malting barley NON-GM0 Soybean, canola and corn. Corn High oil White High amylose Waxy Organic crops
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Segregation and Identity Preserved Crops have what in Common?? Increased Costs-$$
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Increased costs? Farm: Cleaning planters, combines and other equipment Field locations/induce or prevent cross-pollination Additional bin storage/cleaning/opportunity costs The Information Trail
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Increased costs? Elevator: Separate bins/opportunity costs Dumping in correct pit = added risk of cross contamination Cleaning pits, conveyors and loading equipment, trucks, and rail. Terminal elevators- Storage separation, barge loading and separated transport. Totes are not feasible for high volume commodities
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- Strip tests (protein): – $7.50/test –Time: <1 Hour –Accuracy: 95% PCR (DNA) --preferred in international contracts (currently used in RRW corn) –1-2 days –Tolerance/Confidence/cost (Sept 2001) 1% tol. @ 99% conf. @ $120/test .1% tol. @ 95% conf. @ $300/test .1% tol. @ 99% conf. @ $400/test Testing: Technology- Testing: Technology-
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“Field of Dreams”Philosophy of Farmers and Others Build it and they will come Produce it and they must buy?? Mill, press and process it and they will eat it! We are the primary source of product! Consumers have little choice!
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Loss of Markets by GM Crops Risk to add surplus commodity at reduced prices (Examples) Corn in Europe and Asia Canola to Europe Soybeans to Europe and parts of Asia
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Canola Sales in Millions Dollars by Canada
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US Corn Sales to European Union ( Tons Sold)
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US Soybean Sales to European Union (Million Tons Sold)
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GM Wheat- Production Economics Increased Yields Better Crop safety Reduced Dockage Less Herbicide cost Control Volunteers Seed Cost- Higher as no-saved seed Technology User Fee Market and Prices
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Wheat Production Comparison (Estimates) Per Acre Input costs- Conventional Wheat Roundup Ready Wheat Seed Cost/A (1.5 bu.) $12.38 Herbicide Cost Per Acre $14.50 $4.50 Tech. User Fee None $12.00 System Cost $ per Acre $26.88 $28.88
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Other Cost considerations Conventional Wheat Saved Seed Purchase of RR Wheat Seed plus TUA fee each year!! Control of Volunteers in other Crops Yield advantage? 3 bu/A Sask. Data. Reduced control costs of weeds in sequential crops Segregation costs
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Roundup Ready Wheat and the Markets International Buyers are saying “no” to Gm Wheat!! Millers and bakers in USA are negative. Market prices may drop significantly! How much?? Fast food industry may become involved
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U.S. HRS Exports and GM Aversion- 2001 survey U.S. HRS Exports and GM Aversion- 2001 survey
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GM Wheat: If and When Released Genetically Modified (GM) wheat such as Roundup Ready wheat is an example of “irreversible technology. It will cause environmental, production and market externalities. Without the ability to segregate GM and non- GM wheat in the market channels, the market is vulnerable to downward price trends.
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Any Questions??
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