Heralded as the path to profit and cleaner fields, genetically enhanced seed has swept the market in only three years. But what do farmers really think about the new technology?
Ohio farmer John Ricketts believes that if something works, you'd better be using it. Case in point: genetically altered seed that contains special traits. In the few years since the technology has been introduced, Ricketts has planted corn borer-resistant corn, Liberty Link corn and Roundup Ready soybeans. Not all of them worked on Ricketts' farm. Those that didn't he won't plant again until improvements are made. "I'm not going to spend another $35/acre for seed hoping it really works out," he says. "I'm going to be pretty well convinced that it does work."
Chris Hendricks, Franklin, IN, has much the same attitude toward genetically altered seed. "I'm not afraid of it," says Hendricks, who has been growing high-amylose corn under contract since 1996. "If new technology can make me more money, I'm all for it. I'm reluctant to jump headfirst, 100%, with any new program. But once I know it works, then I'm not afraid to go full speed."These farmers are typical of those we talked with in a recent nonscientific Farm Industry News survey of 60 of our readers. Most of them have already planted trait seed, and those who haven't plan to plant it within the next three years. We asked them their thoughts about the technology - how they shop for it, what they hope to gain and where they see its future.
Factors of selection. In the past, yield was the factor that most influenced a farmer's decision to plant one herbicide over another. Dry down, harvestability and drought tolerance also were important. And these factors are still important, according to our survey. But with the advent of trait seed, other factors are entering into the buying decision.
When growers were asked which factors most influence their decision to select a certain hybrid or variety over another, one farmer from Kansas marked herbicide tolerance as the only factor. A farmer from Illinois marked insect resistance in addition to yield and dry down. An Iowa farmer indicated disease resistance next to yield and dry down.
"Yield is ultimately important, but today you want the right trait for the end user," says Paul Gaffney, Aurora, IA, who plans to plant the majority of his acres to food-grade soybeans and Bt, Liberty Link and waxy corn in 1999. "You also want harvestability and a crop that will stand up in the field. There are a lot of traits that the farmer has to look at."
When looking at specialty crop hybrids, in particular, such as high oil or white corn, the biggest factor dictating their decision to plant is premium paid at the elevator. For many farmers we surveyed, the premium still isn't high enough. "The premium needs to justify the additional risk and handling cost," says Fred Menold, Princeville, IL, who is thinking about planting high-oil corn. The magic number for him before he will plant it is $0.35 to $0.40/bu. above the price of conventional corn.
Ricketts has signed a tentative contract to plant high-oil corn but is waiting for final word on what the premium will be. "If it works out to be something around $45/acre or a little more, we'll have 100 acres," he says. Other factors that determine whether farmers will plant a specialty crop are price of seed, growing conditions, the location of a dry or wet miller and the equipment required.
With the increase in the number of farmers growing crops under contract for a specified end use, we also asked whether they agree or disagree with the statement, "The seed-buying decision will soon be out of farmers' control." Slightly more than half of those surveyed disagreed. "The farmers will always have control of who buys it," says Tom Tesdal from Morris, IL.
Does it pay? Trait seed has the potential to make farmers more money, either through a higher value end product, use of a cheaper or better herbicide or control of a certain pest. But does it, in fact, make more money? To find out, we asked farmers whether they agreed or disagreed with the statement, "The availability of genetically enhanced traits will significantly improve my chances for making a profit."
Results were mixed. Menold says that, for the past 10 years, his area has faced severe corn borer pressure, and the Bt hybrids he has been planting for the past few years have outproduced conventional corn. "Last year's records indicated a yield increase of 12 to 15 bu./acre with the Bt corn," Menold says. "That increase times $1.60/bu. paid this fall doesn't add up to much. But I still feel it's a good investment."
Mickey Bright, another planter of Bt corn, agrees. The Zumbro Falls, MN, farmer ran a bag short of Bt corn in 1997 and had to fill in with conventional corn. The 12 rows of conventional corn yielded only 70 bu./acre compared with 140 bu./acre of the Bt corn, due to high corn borer pressure.
Jerry Hammen, Fonda, IA, neither agrees nor disagrees with the statement. He explains, "Say you're planting high-oil or waxy corn. There are places where you can get a premium but there are other places where it is almost cost prohibitive to plant them because your market isn't there. Then you have to look at Bt hybrids. Say you don't have corn borer infestation and you pay $24 to $30/bag for the technology fee. If you don't have corn borer, you are not financially benefiting from it."
He also has concerns about the profitability of Roundup Ready beans. "I've heard of guys this year that have used Roundup beans that are having a hard time getting Roundup to kill some of the larger weeds, which was something that nobody thought they'd have to reckon with."
Gaffney says the profitability depends on the trait. "For example, with Roundup Ready soybeans, you pay a big technology fee for seed to get good weed control. But you are not getting a lot of dollars in return." At the same time, he says his 50 acres of food-grade soybeans for export to Japan commanded a premium of $0.80/bu. this year. "The 80-cent premium at 58 bu./acre equals $46/acre more income in my pocket than my Roundup Ready beans that yielded the same," Gaffney states.
Hendricks also agrees that the profit depends on the trait. For example, the high-amylose corn he has been planting under contract since 1996 has earned him a 60% premium per bushel over regular corn, and the contractor pays for his seed. "So I'm taking $25 to $30 in costs right off the top plus a 60% premium on top of it. It pencils out to be a no-brainer." He says high-oil corn is another story. "I've never raised high-oil corn because the premium on the seed about eats up the premium in the end. So it makes it too close to a break-even proposition for me."
We also asked farmers whether they agreed or disagreed with the statement, "Buying genetically enhanced seed is a requirement to stay in business." The majority said no. "I don't believe that that's true," say Ricketts. "I think there will be a lot of guys who stay in business whether they buy it or not, particularly the smaller operator." The reason, he says, is because they will become more efficient and buy only what they need.
"It depends on each individual," agrees Tesdal. "There are some areas where all the enhanced hybrids aren't going to do anybody any good," he says. "For example, north of here we don't have corn borer problems. So there's no reason to be buying Bt corn or going high oil if there's not a market for it."Still need proof. The majority of those surveyed agreed with the statement, "Genetically enhanced hybrids still need to prove themselves before I am willing to plant them on a large percentage of my acres."
"I don't think two years of data are enough," says Burdell Kuhl, Worthington, MN, who is waiting to plant high-oil corn until he is satisfied that it yields comparable to conventional corn. He also is concerned with the performance of the pollinator plants, which impart the high-oil trait. "If you get the wrong weather, pollination can be a problem, too," he says.
He also is holding off on planting Roundup Ready soybeans. Last year he tested three different Roundup Ready varieties from three different companies on a 70-acre field, and all varieties showed a 9-bu./acre yield drag. "I love the Roundup program in soybeans as far as weed control goes, but the yield was really dragging," Kuhl says. He believes the genetics will improve but says it will be a year or two before he tries to plant it again.
Hammen also agrees that the technology needs to prove itself. He says there are markets for both high-oil and waxy corn in his immediate area, but he has decided not to plant the crops himself because of their inconsistency in yield compared with the yield of regular dent corn. "They have to prove themselves for yieldability, and in the past I haven't believed they have had enough premium to warrant the expense of planting."
Since many question whether modified hybrids have better yield, it follows that only a third of those surveyed agreed with the statement, "Planting genetically enhanced hybrids may cost more but the yield potential justifies it." However, hardly anyone agreed with the statement, "Genetically enhanced hybrids will lead to widespread crop devastation." "That's just hype," says Tesdal. "I'm confident with what the seed companies have put out so far."
Kuhl also strongly disagrees with the statement. "I think (the technology) is going to lead to better crops, not worse," he says.
Future of No. 2. About half of the farmers we surveyed agreed with the statement that genetically enhanced crops will ultimately replace conventional hybrids. The reason?
"Just the way things are changing," offers Fred Tiesmeyer from Kingman, KS, who has planted Bt corn and RR soybeans. "Genetically altered hybrids will improve quality. And we're all in a society that wants to improve itself."
He cites Roundup Ready soybeans as an example of how fast genetically altered seed has already caught on. "A large number of acres were planted in just a short amount of time," he says. "So, if the technology will help clean up your fields, make a better quality of crop for food or bring better demand, then I think it will catch on. But it must be economically feasible and prove itself."Tesdal also agrees that genetically altered crops will replace conventional hybrids. How long will that take? "Probably five years or so," he says. "I think with these markets, you're going to have to plant them to get the premiums.""I think in time everything will have something genetically altered into it just because of the choice it will give the farmer," says Hammen. "You have the ability to grow a specialty crop with different forms of herbicide and insecticide control in one product."
Other farmers neither agreed nor disagreed with the statement. "It won't happen overnight because there are still nations that won't accept the product," Menold says. "If the European Union common market refuses to buy product, there won't be 100% replacement of the product. There must be a product that the end user will buy."
Ricketts asks, "When you say 'replace,' do you mean 100% or 50%? There isn't much question that the genetically altered crops that work will replace those that don't. But I don't think that will be something overnight either."
A national look
The USDA Economic Research Service estimates that upwards of 50 million acres were planted to genetically altered crops in the United States in 1998, just three short years since their commercial introduction. The estimate includes corn, soybeans and cotton. Between 1997 and 1998, the number of acres planted to the seed technology more than doubled.
Adoption has been propelled by potential cost savings and reductions in input use, the report states. The second wave of genetic modification will focus on product or "output" traits such as improved nutritional qualities and processing characteristics.