Going Non-GE

MCLEAN, Ill. (DTN) -- As Matt Hughes pulled large, well-formed ears from his cornfield near McLean, Ill., he conceded that his Bt hybrids performed well this year. Nearly every kernel was free from insect damage and yields could set some farm records.

So why is this central Illinois farmer considering abandoning corn containing traits in favor of conventional, non-genetically engineered (GE) hybrids next year?

"The problem is we've seen a 50% decline in our commodity prices recently," Hughes explained to DTN. "Last year, our margins suffered dramatically, and we're below cost of production today even with increased yields."

With cash prices for corn and soybeans hovering around $3 and $9 respectively, stubbornly high seed prices have become a burden for many Midwestern producers. In this market, biotech seed could be a low-hanging fruit when it comes to cutting input costs for 2015, farmers and experts told DTN.

STICKY SEED PRICES

"Seed companies are accustomed to selling into a high-profit environment," explained Robert Hill, an economist and owner of the market research and consulting company Caledonia Solutions. "Now the economic picture has changed dramatically for the major Midwest crops, and there is good reason to question seed pricing strategies," he told DTN in an email.

In Illinois, Hughes said he has seen other agricultural inputs like fertilizer begin to adjust to the lower commodity prices. But high-tech seed, which often represents an enormous investment for agricultural companies, tends to be "sticky downward," Hill noted.

Recently, even land rents, another historically slow-to-react input, have shown signs of easing. "Rents are coming down. Will seed prices follow?" Hill wondered.

DOING WITHOUT

Insect and weed developments have changed the value of some biotech seed traits, both farmers and experts noted.

"Because of herbicide resistance and rootworm resistance, we're getting back to the crop management tactics that we used to use in the mid-'80s -- pre-emergence herbicides, scouting, and targeted soil insecticides," University of Minnesota IPM specialist Bruce Potter pointed out.

Bt-corn hybrids and soybeans with biotech traits like Roundup Ready "have a lot of convenience priced into them," Hughes said. "I'm not going to operate at a loss just for convenience."

INSECT ISSUES

Ditching Bt-traits will mean Hughes has to return to a full rate of planting-time soil insecticides, which are readily available and cheaper. "The cost of seed has outpaced the cost of insecticides," he pointed out.

Moreover, Hughes' planting equipment is already outfitted to apply the insecticides when needed. He has used soil insecticide in addition to traits for years to control secondary pests like white grubs and wireworms.

Over in northwestern Missouri, Bob Birdsell has been growing all non-GE corn and soybeans for six years on his corn, soybean, wheat, and cow-calf operation.

The Stanberry, Mo., farmer estimates that using non-Bt corn hybrids saves him 50% or more on seed costs. His treated, non-GE corn seed ranges from $158 per bag to $175 per bag. Along with a $12-per-acre soil insecticide application, crop rotation, and diligent scouting, his insect problems are under control, he added.

In some fields where growers have seen failure of some Bt-traits, high rootworm populations could overwhelm a soil insecticide and still cause lodging and yield loss, Potter cautioned. Treating adult rootworm beetles with insecticide is also a difficult proposition, because beetles emerge over a long period of time.

Planting non-GE corn seed will work only if growers are well educated on their rootworm populations, Potter explained. "Scouting will be more important for the people that do this," he told DTN. "The risk will vary by geography." European corn borer is a pest that will also need monitoring -- Bt traits have practically eliminated it as a threat.

WEED CONTROL

Thanks to glyphosate-resistant waterhemp populations, switching to soybeans and corn with no biotech traits like Roundup Ready won't require much of an adjustment on his operation, Hughes pointed out.

"We're already almost back to our old conventional herbicide program here," he said of his aggressive use of pre-emergence and residual herbicides.

In Missouri, Birdsell estimates that his $25 bags of untreated, non-traited soybean seed cost less than half of a standard-traited bag of seed. He uses pre-emergence herbicide products with multiple modes of action to keep local populations of glyphosate-resistant giant ragweed and waterhemp at bay, he added.

For farmers who are considering generic seed, many weed control options do exist, but they won't necessarily be cheap, University of Missouri weed scientist Kevin Bradley noted.

"Certainly a weed control program can be implemented in corn or soybeans without the use of glyphosate and the RR technology," he told DTN in an email. "However, in conventional soybeans, the postemergence options are fewer and not anywhere as close to as flexible and "easy" as Roundup. We should also remember that the price of Roundup itself (not the trait but just what you get in the jug) is very, very low."

QUALITY AND END-USE QUESTIONS

Hughes pointed to an increasing number of non-GE varieties available from seed companies as evidence of a shift in priorities.

"It's driven by consumer demand," Hughes said. "If consumers want non-GMO and are willing to pay for it, we have to react to that."

Both he and Birdsell said they believe the quality of the germplasm in non-GE seed is catching up to biotech seed. Birdsell even plants side-by-side test plots to ensure he isn't "leaving money on the table."

"In our area, in a corn and bean rotation, I think there's only ever been about one year in 10 that it has paid to use stacked hybrids," he said.

For now, Birdsell sends his non-GE corn into the commercial stream. He sells his soybeans to a small company that offers premiums that range from $0.60 to $2 per bushel, and he is always on the lookout for a similar non-GE corn markets.

Hughes already grows some non-GE soybeans for seed companies and said he will explore end-use options for more non-GE corn and soybean seed this fall. In the past, he has taken advantage of high-value varieties such as white corn, and his operation is equipped to handle the segregation and stewardship that comes with specialty crops, he added.

"One of the first things we'll look at going back to is extra value markets," he said. "There are a few options to play with there and non-GMO is the fastest-growing market out there."

Emily Unglesbee can be reached at emily.unglesbee@dtn.com

Follow Emily Unglesbee on Twitter @Emily_Unglesbee

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