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."
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Last Updated on 9/9/99
By Karen Lutz