A strong interest by farmers in growing non-GMO soybeans next year may be leading to lower premiums offered by buyers of the product.
Wayne Hoener, vice president of sales for eMerge, a Des Moines-based seed company that sells non-GMO corn and soybean seed to farmers, says there has been strong interest from farmers for non-GMO seed for next spring.
There are several reasons for that interest, he says.
One is the declining commodity prices. A premium of $2 per bushel, for example, marks a higher percentage at $9 beans than at $13 beans.
The same is true of the corn premiums. The premium total may be slipping, but it still figures to a higher percentage of price than a year or two ago.
Another reason is weed pressure. There have long been concerns about the potential for weed resistance to glyphosate. Some farmers may be making the switch as one way of dealing with that weed pressure.
“You have people questioning the value of the Roundup gene,” says Iowa State University weed specialist Bob Hartzler. “How many are doing it (making the switch) because of that concern, I don’t know.”
Even without those concerns, interest in non-GMO crops has been increasing in recent years, Hoener says. One reason for that is companies producing non-GMO seed have done a better job of producing varieties that yield as well as the GMO varieties.
Another is at least some non-GMO seed companies have focused on end-value traits of the crop, at least in part because a higher percentage of non-GMO crops are used in food products.
The interest is also leading to some uncertainty as companies delay listing their premium offerings for 2015.
“A lot of the big companies who buy a lot of non-GMO crops still have not announced their prices for the 2015 crop,” says Mark Albertson, Illinois Soybean Association director of strategic market development. “I’m not sure what that tells us.”
Those premium announcements are coming, but they are coming later than in past years.
Albertson says so far, the premiums for non-GMO soybeans appears to be in the $1.85 range, compared to about $2 per bushel last year.
That figure generally applies to the cash price for delivery at harvest, not the price on the Chicago Board of Trade.
Farmers need to clarify that difference before signing any contract.
One reason for the pricing delay is probably that the prices for commodity-grade corn and soybeans have slipped, and partially as a result of that price dip, more farmers are expressing interest in planting a non-GMO crop, Albertson explains.
This story was originally published on Iowa Farmer Today.