Corn Commentary

Why not Send the Best to Haiti?

Haiti is the poorest country in the Western Hemisphere and today nearly 2.4 million Haitians still lack adequate access to food five months after the earthquake. The need for food is desperate.

To help, Monsanto is donating $4 million worth of seeds to the country. “The Haitian Ministry of Agriculture approved a donation from U.S.-based Monsanto Company to Haitian farmers of $4 million worth of conventional hybrid corn and vegetable seeds to be made over the next 12 months in support of reconstruction efforts.” Monsanto made the specific point that no GMO seeds would be included in the donation because, according to Business Week, “The announcement raised concerns in Haiti that the donation would include genetically modified seeds, for which the country does not have a regulatory system.”

This announcement came out right after the New York Times ran a nice op-ed on the potential of genetically-modified crops for feeding people in the poorest nations:

Appreciating this potential means recognizing that genetic engineering can be used not just to modify major commodity crops in the West, but also to improve a much wider range of crops that can be grown in difficult conditions throughout the world.

Doing that also requires opponents to realize that by demonizing the technology, they’ve hindered applications of genetic engineering that could save lives and protect the environment.

Scientists at nonprofit institutions have been working for more than two decades to genetically engineer seeds that could benefit farmers struggling with ever-pervasive dry spells and old and novel pests. Drought-tolerant cassava, insect-resistant cowpeas, fungus-resistant bananas, virus-resistant sweet potatoes and high-yielding pearl millet are just a few examples of genetically engineered foods that could improve the lives of the poor around the globe.

It’s wonderful that Monsanto is able to donate seed to people who are in desperate need to help them feed themselves and get their country back to productivity, and it’s great that the hybrids they are donating are high yielding and certainly high quality. But it’s kind of sad that they were not able to donate the very best they could offer in genetically-modified crops that could potentially speed up the recovery process. I find it disturbing that it sounds like they were unable to donate GMO seeds because Haiti has no “regulatory system” for that. To require a regulatory system makes GMO seeds sound like a dangerous substance that needs to be controlled.

Last month’s National Research Council report noted the GMO crops have done no harm to human health and have actually been beneficial for the environment. Yet, as the NYT op-ed points out, opposition to the technology has created an expensive regulatory system that is keeping it out of the hands of the very people who could benefit from it the most - the poorest and most vulnerable. Hopefully, with continued understanding and the growing population, that will change and everyone will have access to the best technology to grow the best food for their needs.

Ethanol Bashing Fest Becoming Transparent to Some

Gluttonous profits: it cost the Saudis a bit less than one dollar to suck a barrel’s worth of oil from the ground. So, at $80 per barrel they make a profit of more than 8,000%.

Marc J. Rauch, Exec. Vice President/Co-Publisher of THE AUTO CHANNEL doesn’t just smell a rat regarding the recent bashing of biofuels like ethanol, but rather felt like he tripped over a big fat alley dweller called big oil.

The headline on his latest column says it all – “Not Satisfied with Gluttonous Profits and Environmental Catastrophe, the Oil Industry Works Overtime to Malign Alternative Fuels.”

Rauch takes a look at just one example of how large petroleum interests are trying to discredit the great advances in supply and efficiency being experienced by U.S. ethanol producers. Their current target is the effort to increase the amount of ethanol being blended in gasoline from 10% to 15% per gallon.

Specifically he takes exception to the information – which looks amazingly like unsubstantiated propaganda – being posted and promoted at

The bogus “news” entity’s latest gambit says the auto industry is urging the EPA to delay allowing E15 without naming a single company or a single individual. Some folks at GM and Ford might be disturbed to hear this revelation given the years and billions of dollars they have spent developing and promoting ethanol use and infrastructure.

“The story also did not say what tests were done, to which vehicles, when, and by whom. Nor did it say what kind of damage was sustained. There was no supportive data or information of any kind. The story was merely one large bogus threat sound bite designed to denigrate a viable alternative fuel versus gasoline’s dominance,” Rauch writes, adding “If oil industry lackeys can convince enough people that there is no viable alternative to gasoline then we are left to believe that catastrophes such as oil spills and oil-induced wars are necessary evils that we just have to accept.”

In the category of strange but true, on the same day another news article says the Arab world need $144 billion to invest in meeting future food needs. In a Bloomberg/BusinessWeek article Tareq al- Zadjali, director general of the Arab Organization for Agriculture Development, is quoted as saying, “Arab countries need to invest $144 billion in agriculture between now and 2030 to meet the demand for food for their growing populations.”

So, if we need oil and they need food can good old fashioned bartering be far behind? Maybe farmers should hold out for 8,000 percent return on their investment?

A Future Look at International Trade

The U.S. Grains Council just held it’s International Marketing Conference and the keynote speaker was the Hon. Carole L. Brookins, Managing Director of Public Capital Advisors, LLC.

Her topic was “Growing Grain Markets in a (Sustainable) Brave New World.”

“We are moving into a new era of focus on global public goods, including money, trade, climate and environment. With that come global threats: cyber terrorism, fragmented political and economic power, radical groups seeking to control weapons of mass destruction and piracy on the high seas,” she said.

Brookins identified four trends shaping our world today. First – a re-balancing of global wealth and power. “There are shifts in global economic leadership, which creates a wider competition to maintain and grow market share,” said Brookins. Second – a revolution in energy supply and markets. According to Brookins, this is fueled by climate change, resource depletion, energy security and technological innovation. Third – a rebellion against the modern food system. “Activist groups attack the safety and value of the modern food production system,” she said. Fourth – a resurgence of investment in commodities and agriculture. According to Brookins, this will be stimulated through investments, control of the supply chain and economic power.

“Experience shows that sustainable global food security will depend on intensive, large scale agriculture and expanding global trade,” Brookins said. “Both your risks and reward will be multiplied. Your complexity of choices and competition will be magnified. The brand of the Council is highly respected around the world. Renew your mission in 2010 and lead out in a growing, dynamic world of 9 billion lives over the next 50 years. I look forward to watching.”

You can listen to Carole’s remarks here:

Working On International Trade

The U.S. Grains Council is holding its 7th Annual International Marketing Conference and 50th Annual Membership Meeting in Mexico. One of the main purposes of this meeting is for the organization to create a new working plan for the development of U.S. grain exports.

Participating in the conference is NCGA CEO, Rick Tolman, seen here addressing one of the meetings. NCGA is one of the founding members of the U.S. Grains Council.

Rick, who worked for USGC for many years, says that NCGA considers the Grains Council their international trade partner. The two organizations have a very strong working relationship. He says one of the things he’s really happy to hear discussed here at this meeting is how well exports of DDGS have been due to the efforts of the Grains Council. That’s good news for corn growers for whom the production of ethanol is so important right now. He says that the Grains Council is looking at other value added products they can promote for export too.

I spoke with Rick in between meetings and you can listen to the interview here:

Corn Mission Accomplished

The U.S. Grains Council Corn Mission team to Morocco, Egypt and Jordan has concluded and the group is back safe and sound on American soil.

Chuck Zimmerman reports on some final thoughts from the mission:

A consistent theme was the growth potential in these markets. That’s why the USGC has people on the ground working to develop new business opportunities for American farmers. After our team’s final dinner I spoke with them as a group to get their final thoughts on what they’d like farmers back home to know about their experience. We just went around the table starting with the corn grower members. Here are some of their final thoughts:

  • The main thing is the relationship the USGC staff has with people in all these countries. They appreciate what the USGC does.
  • I got to see what the USGC does on a personal level. These ddgs programs are working well. I hope they’ll buy more.
  • I sure learned a lot about the legwork that goes on on the ground here for these guys. There’s still some work to be done.
  • We spent our time well and did something that will benefit everyone back home. The USGC work has been an important part of keeping our exports going.
  • I think the potential for increased sales is there. The network is in place and working well.
  • Demand looks strong and will continue for a long time to come.

Shannon Schaffer, the USGC staff representative on our trip added these thoughts:

  • These guys worked really hard on this trip. Lots of time spent on the road and with the customers we service. They served as ambassadors for the USGC and corn growers specifically.

You can listen to Chuck’s final interview with the Corn Mission Team below:

Read all about the trip and see all the photos on Agwired and/or USGC’s The Grain Board.

Ethanol Supporters Should Be Outraged Over IEA Sleight Of Hand

big oil, business week coverApparently, last week’s International Energy Agency (IEA) numbers regarding future oil supplies were fudged to protect the innocent or at least our frail economic recovery. According to a whistleblower who whispered in the ear of The Guardian, the world is much closer to running out of oil that we think.

 So, what is to be gained or lost by such skullduggery? Stockbrokers, bankers and oil investors jumping out of windows…sure, but what is the downside? (Insert sarcasm here).

 The comments in the UK’s respected Guardian stated that the IEA has inflated its 2009 report of oil reserves for fear that the truth would shock world markets into a reactionary panic. IEA is alleged to have put its role as an industry watchdog in the kennel for the time being to fend off a potential buying panic…even at the risk of being exposed for overplaying supplies and chances for finding increased reserves.

  On face value this might seem to be based on at least a modicum of twisted logic, but what are the ramifications for world governments who govern, plan and even invest based on IEA’s data? Consider that they also develop their own energy policies based on such essential information.

According to the Guardian’s high-level IEA source, estimates of global oil production growing from its current level of 83 million barrels per day to 105 million barrels per day are as bogus as the Tooth Fairy. The source said many IEA officials believe even 90 million barrels per day is unreachable, but the agency will not lower its forecast because it fears panic could spread through financial markets.

If we have indeed entered the “Peak Oil Zone” (that strange and unfamiliar place where we actually feel the pressure to get real about “energy policy” not oil policy) then it is time to fess up like an alcoholic at an AA meeting. “Hi my name is Joe Consumer and I have a petroleum problem.” (more…)

Turkey Lays an Egg

Just in time for Thanksgiving, the country of Turkey dropped a big, fat egg on grain imports.

The U.S. Grains Council reports that last week, Turkey placed an unexpected ban on imports of biotech crops.

Turkey, the 27th largest export market for all U.S. goods, issued a new regulation on Oct. 26, 2009, placing additional requirements on all food and feed products containing genetically enhanced components. This new regulation essentially came without warning, according to U.S. Grains Council Regional Director in the Middle East and Subcontinent Joe O’Brien. “This ban came at us pretty much out of the blue,” he said. “This regulation impacts everything from a bag of potato chips to grains and co-products.”

The Office of the United States Trade Representative (USTR) reported on its Web site that this signifies approval of the fourth draft of a National Biosafety Law and is similar in nature to the draft reviewed last year. O’Brien said the potential impact is substantial to U.S. coarse grains and producers. For example, Turkey is the largest buyer of U.S. corn gluten feed (GCF) and the third-largest buyer of U.S. distiller’s dried grains with solubles (DDGS). Turkey imported 435,378 metric tons of CGF in 2008 and 202,422 tons in the first six months of 2009. Turkey imported 465,212 tons of U.S. DDGS in 2008 and 199,173 tons from January through August of this year. USTR reports the U.S. goods trade surplus with Turkey was $5.8 billion in 2008, an increase of $3.8 billion from 2007. USTR also notes the total value of U.S. “transgenic” crop exports to Turkey exceeded $1 billion in 2007, which are endangered depending on how this new regulation is implemented. O’Brien said one issue currently “up in the air” is the fate of the vessels currently on the water loaded with U.S. goods.

There is a good chance the regulation will be reviewed and possible reversed, but immediately after it was issued last week there was a big holiday in the country, which effectively shut down all government operations (it was Turkey Independence Day). USGC is working with USTR to get the decision changed.

Improved Corn Varieties Reduce Poverty in Africa

As the battle for biotech crops continues in many countries, including Africa, a recent study finds that improved corn varieties have made a significant impact on reducing poverty.

According to an article published in Agricultural Economics, a multi-country study documents the significant role international maize research plays in reducing poverty. It finds that since the mid-1990s, more than one million people per year have escaped poverty through the adoption of new maize varieties.

Key economic benefits from maize research are primarily the result of the productivity gains farmers experience after adopting modern varieties. While notably scant prior to the 1980s, the percentage of MVs found in a maize area grew from 5 % in the 1970s to 60% in 2005. The study results suggest that without research to maintain or increase maize yields, poverty in the region would be substantially worse.

Googling around for more information on African maize production, I found this story on the Alliance for a Green Revolution in African (AGRA) website that tells the story of Able Traore, a West African farmer who started using modern seed varieties on his small farm two years ago that have increased his yields by 50 percent. “If I had known what I know now, I would not have left the country for any other place. I wish that all my kids become farmers. Farming is the most pleasant job you can do in Mali,” Traore says. How true is that?

Of course, it’s not just better, higher yielding varieties that will continue to help Africans feed themselves. It is also access to more modern farming methods, fertilizer and inputs. As the AGRA website states: “We know that through dramatic improvements to agriculture, prosperity can replace poverty. In most modern economies, no lasting success has been achieved without first building a strong agricultural foundation.” True again.

No doubt that much of the credit for the improvement over the past 30 years in Africa must be given to the late Dr. Norman Borlaug. In 1986, Borlaug began working with the Sasakawa Africa Association, which aims to defeat malnutrition and poverty in Africa. At a memorial for Borlaug earlier this month, Yohei Sasakawa promised to carry on Borlaug’s dream that African children would someday not have to go to bed hungry. “You cultivated a dream that would empower the farmers, you planted the seeds of hope, you watered them with enthusiasm, you gave them sunshine, you inspired with your passion, you harvested confidence in the hearts of African farmers,” he said. Amen.

Bill Gates Calls for Biotech Crops to Feed Poor

At the World Food Prize Forum in Des Moines on Thursday, Microsoft founder and philanthropist Bill Gates praised the work of Norman Borlaug and called for a new “Green Revolution” to help feed the poorest of the world’s poor. Gates also announced grants totaling about $120 million to help small farmers in developing countries such as Africa.

“In the middle of the 20th century, experts predicted famine and starvation, but they turned out to be wrong – because they did not predict Norman Borlaug. He not only showed humanity how to get more food from the earth – he proved that farming has the power to lift up the lives of the poor,” Gates said.

The billionaire noted that Borlaug’s Green Revolution “helped avert famine, save hundreds of millions of lives, and lift whole countries out of poverty” but “it didn’t go far enough. It didn’t go to Africa.”

He blames that on ideological differences between technology and environmentalism that forces a “false choice” between productivity and sustainability. “It blocks important advances. It breeds hostility among people who need to work together. And it makes it hard to launch a comprehensive program to help poor farmers. The fact is, we need both productivity and sustainability – and there is no reason we can’t have both.”

“We have to develop crops, including new inputs to go with them that can grow in a drought,” Gates said. “We have to have crops that can survive a flood, that can resist pests and new diseases. We need higher yields on the same land, despite more difficult weather. And we will never get there without a continuous and urgent, science-based search to increase productivity, especially focused on the needs of small farms in the developing world.”

I’m no big fan of Bill Gates, but I was very pleased to hear him standing up to radical environmentalists who want us to move backward instead of forward and supporting the use of biotech crops to help the poor in developing countries grow enough food to feed themselves.

You can watch Gates’ address on YouTube in three different segments (due to the 10 minute limit on videos for YouTube). Here is the first installment.

Taiwan Goodwill Mission Visit Midwest

Taiwan is expected to purchase $3.5 billion in soybeans, corn and wheat from the United States over the next two years and last week Taiwanese delegations traveled around the Midwest to see their future purchases in progress and formalize agreements on the state levels. The groups visited a number of states, including Indiana, Illinois, Iowa, and Missouri and met with corn and soybean grower organizations and state officials.

In Missouri, they met with Governor Jay Nixon and representatives of the agricultural industry and signed a Letter of Intent to purchase between 303 and 413 million bushels of American corn and up to 750,000 metric tons of distillers dried grains, with a total estimated value of up to $2.37 billion.

Iowa Corn Growers Association president Don Elsbernd met with the Taiwan delegation in his state and signed the agreement with them. “As our 4th largest customer, we see this agreement as critical to our corn industry in Iowa and we think it shows their satisfaction with the product we are providing,” he said.

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