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Most of us have been following developments in biotechnology approval for many years. The most recent issue is the non-approval of certain corn events by China. Viptera (MIR162) corn has not been approved there since its introduction in 2010; Duracade, new this year, is in the same situation. The greatest impact of the Chinese situation is on distillers grains from ethanol production. China is a major importer of dried distillers grains with solubles (DDGS); much less so for whole corn.
Harvest is a key time for grains that carry stewardship requirements. Stewardship in biotechnology means directing the grain with the specific event toward uses that have full approval with no restrictions, even if there may be no economic premium for doing so. In the current cases, stewardship means domestic feed use or domestic processing use as long as none of the process products enter export channels that could take them to restricted buyers. Restricted biotech events are very difficult to manage in open export markets. Once in general trade, agronomic biotech events cannot be identified or segregated quickly and inexpensively.
The most important step in a stewardship chain is the initial delivery from the farm to the first point of sale. If the chain is not started at that point, it almost never can be recaptured because of the commingling that happens in bulk commodity handling. If grain covered by a stewardship requirement is mixed in on farm storage, then the entire bin would be considered covered by the stewardship requirement. This demonstrates the need for planning before planting season to make the requirements as easy to meet as possible. Stewardship planning will be discussed in future articles.
Every bushel of stewardship grain that is accounted for in correct uses is one less bushel that could cause a problem in the marketing chain. There is a Stewardship Agreement behind every bag of covered seed. Understand where this grain should and should not go, and follow thru with what is required. If the covered grain is not identified at the first point of sale, the next handler cannot always do what is correct to maintain the chain of identity.
According to the National Grain and Feed Association, the trade disruptions, market value losses, and shipment redirections caused by the Chinese rejections have cost the grain market about $3 billion. This cost filters back through the system, eventually in part to the point of market price at the farm level. There are several lawsuits pending among producers, grain handlers and biotech providers. All parties have arguments to make. Perhaps the legal actions will clarify the responsibilities for biotech stewardship chains, likely at a significant cost.
However, at harvest, the more stewardship grain that is delivered and identified according to the agreement, the less likely further problems become. The economic benefits of doing the correct thing are diffused across the grain market. The largest benefit at the producer level may be continued availability of constantly upgraded traits at a pace faster than the entire world market might allow.
Source: Iowa State University
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