The marketability of Roundup Ready wheat is under attack, this time south of the border.
A study by a U.S. economist has concluded that the introduction of genetically modified wheat would result in lost sales and lower prices for U.S. wheat growers.
The study by Robert Wisner, an agricultural economist at Iowa State University, reaches the same conclusion about GM wheat as has the Canadian Wheat Board.
Buyers don’t want it, so there is no reason to grow it.
“The issue is not food safety,” Wisner told reporters during an Oct. 30 teleconference call.
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“The real issue from a marketing standpoint is consumer attitudes and perceptions.”
The study found that consumers overseas have a myriad of concerns about GM wheat, including food safety, environmental impacts, the concentrated private ownership of GM seed patents, inadequate legal controls and the feeling that once GM wheat technology is introduced, there is no going back.
“It is obvious that many foreign consumers see no benefit to themselves from consuming GMO wheat,” said Wisner.
With the growing trend toward GM labelling – now re-quired in 37 countries and expected to reach 50 within a couple of years – those consumers have the ability to choose whether to buy products containing GM wheat. And all the evidence indicates they will choose not to, said Wisner.
The report quotes the CWB’s assertion that more than 80 percent of its customers have said they will refuse to buy GM wheat and refers to similar evidence of consumer resistance from U.S. marketing groups.
For example, a 2002 survey of foreign buyers by U.S. Wheat Associates found that 100 percent of the Chinese, Korean and Japanese buyers contacted said they would refuse to buy GM wheat under any circumstances.
The study examined the impact of GM wheat on sales and prices for U.S. wheat over a period of two to six years, under a variety of scenarios. One of the assumptions is that non-GM wheat will be available from other suppliers, including Canada.
It concluded that U.S. exports of hard red spring wheat would decline by anywhere from 33-52 percent from 2001-02 levels, and farm prices would decline by anywhere from 32-35 percent.
If a Roundup Ready durum wheat were introduced, exports would plummet by anywhere from 71-87 percent and prices dip by 32 percent.
U.S. government support payments would only partially compensate for the drop in wheat prices, and much of the GM wheat rejected by importers would find its way into domestic feed markets, thus depressing prices for feed grains such as corn, sorghum and feed barley.
Helen Waller, a wheat grower from Circle, Montana, told the same teleconference that the study confirms what most farmers already think about GM wheat.
“As farmers we ask ourselves, why would we plant a crop that we can’t sell?” she said.
Farmers are used to dealing with drought, hail grasshoppers and other crises, she said, “but nothing can compare with the disaster we’ll face if the commercial introduction of GM wheat drives our buyers away.”
Supporters of GM wheat argue that the experience with corn and soybeans indicates that the risk of foreign buyer rejection is low.
However, Wisner takes issue with that, saying corn and soybeans have been shut out of some important markets, such as the European Union, and adding there are important differences between those two crops and wheat.
For example, while wheat is a food grain, corn and soybeans are mainly used for feed or highly processed. In addition, the U.S. is less dependent on export markets for corn and soybeans than it is for hard red spring wheat, and there is a growing alternative market for corn in the production of ethanol.
As for the idea of setting up separate handling, transportation and marketing systems for GM and non-GM wheat, Wisner said the economics don’t add up.
A foreign buyer is unlikely to be willing to pay a 70 cents a bushel premium for non-GM wheat from the U.S. when it can buy it from other suppliers for a lower price. Such a premium could also encourage other countries to boost their own non-GM wheat production to meet their domestic needs or move into the export business.
