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Q:
What is the difference in the cost of production gmo vs. non gmo?
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A:Expert Answer

Will Rogers is credited with the quote: "The farmer has to be an optimist or he wouldn't still be a farmer."  Optimistically, each winter we review our harvest data comparing our crop yield by variety to our cost of production for that crop that season, in consideration of the type of growing season we had, in order to decide what seeds to purchase for the coming season.

 

Since 1998, we have been growing both GM and non-GM corn and soybeans. (We don’t actually use the term “GM” or “GMO” since all domesticated crops have been genetically modified, but am using the acronym for the sake of this audience). We run the numbers ever year for every variety and every crop because that’s the only way to run any successful business. We collect the data on what worked and what didn’t work and make changes and improvements or what many businesses call “continuous quality improvement.”

 

2014 Corn Production Non-Irrigated

 

Cost Per Acre

Non BT Corn

BT Corn

Seed

$65

$114

Fertilizer

$123

$123

Herbicide

$40

$21

Crop Insurance

$40

$40

Fertilizer Application

$7.50

$7.50

Planting

$28

$28

Nitrogen Application

$9.50

$9.50

Pesticide Application

$9.00

$9.00

Harvest

$28.00

$28.00

Hauling

$25.00

$25.00

Drying

$60

$60

Land Rent

$150

$150

Total Cost of Inputs

$585/ac

$615/ac

BPA=bushels per acre

186 BPA

221 BPA

Current cash price/bu

(Salisbury, MD)

$4.01

$4.01

Gross Income/ac

$745.86

$886.21

Net Income Difference

$161

$271

 

 

2014 Soybean Production Non-Irrigated

 

Cost Per Acre

Non-GMO for Food

GMO for Feed

GMO for Seed

GMO High Oleic

Seed

$41

$53

$53

$53

Fertilizer

$21

$21

$21

$21

Herbicide

$40

$18

$18

$18

Crop Insurance

$32

$32

$32

$32

Fertilizer application

$7.50

$7.50

$7.50

$7.50

Planting

$20

$20

$20

$20

Pesticide application

$18

$18

$18

$18

Harvest

$28

$28

$28

$28

Hauling

$9

$9

$9

$9

Land Rent

$150

$150

$150

$150

Total Cost of Inputs

$366.50

$356.50

$356.50

$356.50

Bushels/Ac (BPA)

35 BPA

50 BPA

50 BPA

55 BPA

Price/Bushel

$12.25

$9.60

$11.50

$11.25

Gross Income

$429

$480

$575

$619

Net Income Difference

$62

$124

$219

$263

 

The first year we planted Bt corn was 2000. As you can see from the chart below, it has out-performed conventional corn every single year. What is most noteworthy however, is the importance of its performance in unfavorable growing years.  We had drought conditions from 2010-2012. A healthy crop is a more productive crop and in bad years, that can make the biggest difference to the financial sustainability of the family farm.

 

Corn (Non-Irrigated)

2000

2004

2010
(slight drought)

2011

(drought & hurricane)

2012

(drought)

2013

2014

Biotech  Acres

10

276

573

397

464

290

275

Avg Yield BPA

171

182

110

44

111

214

220

Conventional Acres

647

415

195

213

261

75

200

Avg Yield BPA

165

167

91

18

57

202

186

Biotech/Bt
Yield Advantage

6.4

15

19

26

54

12

34

Price/Bu

$2.35

$2.55

$5.18

$6.47

$7.40

$4.41

$4

Net income difference

Due to yield

$15.04

$38.25

$98.42

$168.22

$399.60

$53

$136

 

Likewise in our soybean production history, we have consistently experienced a better yield in our GM soy over our non-GM soy. We grow four “classes” of soy: soy for food, soy for feed, soy for seed, and a specialty GM bean High Oleic (HO) acid beans. The HO beans go for feed but the oil that is extracted is used in baking and frying which eliminates the trans-fatty acids from using hydrogenated soybean oil as an ingredient. These beans are kept segregated and true to their variety in order to have the highest quality HO oil from the extraction process.

 

Soybeans (dryland)

1998

2000

2005 

2010

(slight drought)

2011

(drought)

2012

(drought)

2013

2014

Biotech Acreage

195

322

416

270

522

527

200

300

Yield bu/a

54.2

50.3

53.5

46

37

43

48

55

Conventional Acreage

156

184

213

306

750

675

175

100

Yield bu/a

48.2

43.2

46.3

36

34

36

25

35

Yield Difference

6 bu

7.1 bu

7.2 bu

10 bu

3 bu

7 bu

23

20

Price/Bushel

$6.90

$6.62

$7.25

$11.30

$12.52

$14.55

$13.55

$11.25

Income Difference/
Acre

$41.40  

 $47.00  

$52.20

$113.00

$37.56

$101.85

$312

$225

 

Even when there is a premium involved with growing a non-GM grain, due to better yields, GM has out-performed non-GM on our farm every year. We have experienced higher yields in all of our GM crops in the nearly 17 years we have been using the seeds. We grow what we have market access to sell in our region. Our choice to buy seed is based on the success of various seeds we have tried and well as University research conducted in our area. We don’t pay attention to data that comes from other growing regions in the US because it generally isn’t relevant to the conditions we experience. We use a “prove it” mentality in that we will give a seed a try on a limited number of acres and do our own compare and contrast to our other fields. Our decision making is balanced by diversity of the markets we can access, the demand within those markets, and the productivity that we have seen for ourselves to justify which type of seeds to plant each and every year.

 

A:Expert Answer

While the cost of food is impacted by various factors (the price of oil affects transportation costs; temperature changes can cause drought; etc.), GMOs play an important role in keeping those prices as low as possible. It’s estimated that corn-based products would be priced 6 percent higher and soybean-based products would be 10 percent higher if GM crops were not grown, according to a 2010 study by Graham Brookes et al.

Graham Brookes, an agricultural economist with PG Economics Ltd., recently answered the question “Are GMOs increasing the price of food?” He highlights several production-oriented advantages of GM crops. Here is an excerpt from his response:

“The main reason why biotech (GM) crops have contributed to reducing the cost of food stems from the nature of the technology adopted. The technology adopted to date has largely been productivity-enhancing and cost-reducing technology. This means additional global production has arisen from use of the technology, equal to an extra 122 million tonnes of soybeans, 237 million tonnes of corn, 18 million tonnes of cotton lint and 6.6 million tonnes of canola in the period 1996–2012. At the same time, the cost of producing these crops using this technology has typically been lower than the cost of producing the same crops using conventional technology, because of savings to the amount spent on inputs such as pesticides and fuel. These savings have usually more than offset the additional cost farmers have incurred for buying GM seeds, so that, when added to the extra income arising from higher yields, the net farm income benefit from using GM technology has been equal to $116.6 billion (1996–2012).

“Assessing the precise impact of these GM agronomic, cost-saving technologies—such as herbicide tolerance and insect resistance—on the prices of soybeans, maize, cotton and canola (and derivatives) is difficult. Current and past prices reflect a multitude of factors, of which the introduction and adoption of new, cost-saving technologies is one. This means that estimating the effect of different variables on prices is far from easy.

“In general terms, it is important to recognize that the real price of food and feed products has fallen consistently during the last 50 years. This has come about not ‘out of the blue’ but from enormous improvements in productivity by producers. These productivity improvements have arisen from the adoption of new technologies and techniques.”

If you have additional questions, please let us know. Also, feel free to contribute to the discussion in the comment section below.

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