Letter from Langdon: Hungry for GMO?

The folks with the biggest appetite for genetically modified wheat aren’t the world’s hungry – they are voracious seed companies, says Richard Oswald. GMO wheat offers few advantages, unless you hold the patent and pocket the fees farmers must pay to grow it.

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I hear this a lot lately: “GMO wheat is the only way we’ll ever cure world hunger.”

Facts suggest otherwise.

We’ve had insect and herbicide resistant genetically modified crops for years now. It hasn’t cured world hunger yet. Maybe that’s because most genetically modified corn and soybeans are grown primarily for livestock feed or biofuel feedstocks. (Genetically modified crops are also labeled as GMO, which is short for genetically modified organism). Food or not, the fact is a lot of potential world-wide customers don’t want genetically modified crops.

But just the same, those crops have replaced wheat on a lot of farms.

Wheat isn’t all the same. Different types of wheat are used for different things. Some varieties are for pasta. Others are grown for bread. And wheat isn’t all food. If the flour is bad, the bread is too.

Some, especially the below-average stuff, is used for animal feed just like corn.

But our hungry world demands more food than ever before, so why would farmers trade food crops for feed crops? Short answer – they do it for money.

In 2013 the average yield of all wheat grown in the U.S. was 47 bushels per acre, and the average price was $7 per bushel. That means that when an average farmer sold his average crop of wheat in 2013 he received $329 per acre.

At about the same time, the average corn farmer in America produced 160 bushels per acre worth $4.50 per bushel. That means an average U.S. corn farmer could sell his average 2013 crop for $720 per acre. That’s more than twice what the wheat farmer got. And feed grain crops don’t have the same delicate quality issues of food grain crops.

GMO wheat won’t fix that. There is no quality gene. There is no yield gene. At least there hasn’t been up to now. Conventional crop breeding is still the way we get improved yield, and improved qualities that make the difference between milling wheat for food and feed wheat.

Comparing wheat to soybeans, yields for the two unrelated crops are about the same even though soybeans have been genetically modified since the mid 90’s. Historic and average yields are almost identical with a 300% improvement in the last 90 years.

USDSA Economic Research Service
Ninety-five percent of the feed grain produced in the U.S. is corn.
Corn is different. Yields today are about six times larger than in the mid-1920’s. But trend-line yields show a steady rise without any real boost from genetic modification. It looks like the big seed companies have confused yield with seed prices. That’s because with patented seeds, those prices are about double what they were 10 years ago.

Basic economics dictate that when production goes up, prices go down. Food is always priced higher than feed. If quality is low, or if people just don’t have the money for food, those crops become surplus feed for farm animals.

Another thing to remember is food need does not equal food demand. People who need food most can’t afford it. Therefore without money, they cannot create economic demand.

It’s simple as that.

Hungry people who are poor are totally irrelevant to price discovery. Even with free wheat, without food aid from wealthier countries like the U.S., costs of transporting it from where it is grown to where it is needed would limit demand. In the past, food aid has helped spread genetically modified crops like corn to impoverished Latin American countries when genetically engineered corn was given to peasants who planted some of the seeds. Plants resulting from that seeding cross pollinate with native corn plants. Free food simply advances the cause of GM seed without actually feeding the poor.

Our statutes say those peasants broke the law by not paying a licensing fee for the seeds they planted. In South America presence of patented Roundup Ready soybean genes resulted in a Monsanto-payable tax on soybean exports.

I hope those weren’t destined for the destitute.

Going back to corn, the 2012 U.S. crop was hurt by heat and dryness. So the average acre of corn produced only about 123 bushels. That’s 37 bushels fewer than 2011.

Because the size of the crop was lower, 2012 corn price surged all the way up to $7.40. As a result, in 2012 the average corn farmer got $910 per acre, almost $200 more than he got from the better 2013 crop.

Backing up 10 more years, average corn yield in hotter drier 2002 was six bushels better than 2012. Older technology in 2002 gave higher yields than 2012. In fact, yield gains attributed to genetically “engineered” corn (engineered sounds better than modified) haven’t really been apparent until 2013, when moderate daytime temperatures coupled with ideally cool, corn-loving nights to push us over the top.

Weather accounts for a lot, but when results are good, big seed companies take the credit.

Farmers make less money growing more corn. Or wheat. Or soybeans. On top of that, in the year 2013, corn farmers paid more for patented seed than in 2012, or twice what seed cost in 2002. The price of GMO seed is a big part of production costs. We don’t know how big because seed companies are not required to divulge their pricing structure. One thing we do know is that they claim research and development of new GMO seeds is very expensive.

How expensive is it?

How much is it worth?

Your guess is as good as mine.

One thing we do know is that patented genetically modified wheat would raise the price of seed without increasing wheat prices or economic demand.

That’s no way to feed the world.

Richard Oswald, a fifth generation farmer, lives in Langdon, Missouri, and is president of the Missouri Farmers Union.

 

Topics: Ag and Trade
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