" I heard it through the AgLine"

September 26, 2011

 

 

·       Cost limits growth of young farmers

·       Growers hope to raise berry standards

·       More Monsanto GM corn hit by pests

·       The benefits of biotech to agriculture

·       US corn growers blindsided by Bunge

 

 

Cost limits growth of young farmers

 

(NPR) – In farm country, business is still booming. Commodity prices remain high, and investors are funneling millions of dollars into buying farmland, making it quite enticing for the would-be farmer who wants to leave the rat race.

 

But surprisingly, these factors make it that much harder for the next generation of farmers to secure the financing they need to get on the tractor.

 

A High Cost To Start Out

 

Austin Bruns drives with his windows down on a dirt country road in a noisy 18-wheeler. He's towing tons of corn and has a little more than a five o'clock shadow, hinting at long days of an early harvest.

 

"When I graduated from high school, I didn't really have my sights set on anything; I knew I didn't have any [land] that I was going to come home and farm," Bruns explains.

 

So Bruns went to school to become a diesel mechanic and later joined the National Guard. Today, the 25-year-old rents about 150 acres in eastern Nebraska, where he grows soybeans and corn.

 

Bruns also works for area farmers who contract with agriculture giant Monsanto to grow seed corn. In these fields, the entire ear of corn is harvested for a nearby seed facility to use to develop next year's seed.

 

Come harvest time, farmers here band together to share their equipment. Veteran farmer Mark Haser says that just makes sense.

 

"You just can't afford to own everything yourselves anymore," Haser says. "It's your cost per acre. The initial cost is so high that you have to be able to spread this stuff out over more and more acres to make it worthy of being able to have it."

 

No Luck On Loans

 

When established farmers like Haser need a loan, they visit Utica, Neb., banker Larry Rogers. Rogers says that unless young people are left farmland by their family, they're pretty much out of luck.

 

"It has gotten more difficult with prices as they are today — even with the good prices for grain, I think it's more difficult for a young person to get started," Rogers says.

 

There were nearly 180,000 farmers younger than 35 in 1997. A decade later, that number fell by a third, to fewer than 120,000.

 

Ernie Goss, an economist at Omaha's Creighton University, says agriculture's appeal as an investment is one of the reasons for the drop.

 

"[Some people are] sitting in New York [and] saying, 'Well, I don't know, I've never even been to Nebraska, but by golly, I'm going to buy some Nebraska land,' " Goss says. "And you have these groups coming together ... that are buying farmland [and] driving up farmland prices to prices we've not seen before."

 

Goss says even though the Federal Reserve is keeping interest rates low for the next few years, banks simply aren't lending to high-risk first-time farmers.

 

Matt Wildman fits that profile. He's a 22-year-old University of Nebraska student about to graduate with a degree in agriculture economics. He wants to land a job with an agriculture company or start his own fertilizer business.

 

"The biggest challenge, at least in my position coming out of college with no assets to my name, pretty much, no money, and trying to get a loan for $50,000 or $80,000 or more just to start a business — it's not going to happen unless you have a co-signer," Wildman says. "My parents are willing to co-sign on something right now, but it's got to be something that's going to [have] cash flow itself — it's got to be able to work."

 

Veteran farmer Haser says most of his money is tied up in his operation and not accessible, so he has sage advice for any new farmer.

 

"If you want to die rich, then become a farmer, because that's about all you're going to do as far as on the rich factor, is you're going to die that way," he says.

 

But it's only on paper that these established farmers appear rich. With today's high commodity prices they're not in the business of selling acreage, making it more difficult for young would-be farmers to work the land.

 

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Growers hope to raise berry standards

 

(The New York Times) – Organic-produce buyers who think they are striking a blow against a chemical-heavy industrial food system may be surprised when it comes to one of California’s signature fruits: those “organic” strawberries that overflow from baskets at local farmers’ markets are not nearly as organic as they may think.

 

In a letter sent to the United States Department of Agriculture last month, an advocacy group in San Francisco and a triad of local growers demanded an end to what they say are vague federal regulations that allow millions of pounds of toxic chemicals to be used to grow plants that eventually produce strawberries labeled as organic.

 

“Seeds and plant stock widely used in organic agriculture are grown with prohibited materials ... that violate existing regulations and that jeopardize the credibility of the organic label,” the letter reads. Signed by three growers and the Pesticide Action Network, it added that officials with the National Organic Program at the department “must act with some urgency” to support production of a berry that is sustainable from start to finish.

 

Berries — including blackberries, blueberries, raspberries and strawberries — present a unique challenge to growers of organic crops. They all go through at least one rotation as non-fruiting nursery plants, and during that stage are fumigated with chemicals including methyl bromide, a soil sterilizer and pesticide known to be depleting the ozone layer.

 

The letter singles out strawberries, a particularly pest-prone crop and the jewel of California’s fruit basket. The state pumps out crates of the berries by the millions, shipping them across the country and internationally. It also produces the majority of the world’s strawberry nursery plants.

 

What it lacks is a single organic nursery.

 

In 1984, California produced the nation’s first commercially farmed organic strawberry, sold out of the back of a truck in Santa Cruz. The owner of that truck, Jim Cochran, who now manages a 20-acre organic berry farm, Swanton Berry Farm, in Davenport on the coast north of Santa Cruz, is one of the letter’s signers.

 

National regulations require that organic produce be grown for three years without synthetic pesticides. Strawberries in California are grown over a five-year cycle, often starting as nursery plants in the fields of Southern California before being transplanted to the sandy soils of Northern California.

 

Before they begin bearing fruit, virtually all plants — whether they will go on to produce conventional berries or organic ones — are treated with fumigants and other synthetic pesticides.

 

The National Organic Program is in the process of reviewing its standards for seeds and planting stock. The standards have not been updated since they were created in 2002, and they allow conventional stock to be used wherever organic stock is not “commercially available.”

 

Officials in the program say an updated version of the standards will clarify that using organic planting stock is mandatory. Yet clearer language will not solve the problem, said James Rickert, another farmer who signed the letter, because organic certifiers will be hard-pressed to define “commercially available.”

 

Therefore, the farmers say, most fruit growers will still interpret the rule as an excuse not to seek out organic stock, which they consider to be at higher risk for pests and disease.

 

The loophole has been a personal source of bitterness for Mr. Rickert. From 2005 to 2009, he was the state’s first and only commercial grower of organic nursery plants, before being driven out of the business in 2010 because too few fruit growers were willing to buy from him.

 

Mr. Rickert, 31, said that he was “extremely frustrated” by the experience — and that consumers should be, too.

 

“The reality is that a lot of the organic growers want nothing to do with organic plants” because it scares them, said Mr. Rickert, who has since gone back to herding organically fed cattle at his ranch in Butte Valley.

 

Indeed, for many organic strawberry growers, using organic stock amounts to taking a big financial risk with little chance of reward.

 

“You bring sick plants from the nursery, I mean, you might as well keep your money in the bank,” said Carlos Vasquez, who grows 24 acres of organic strawberries in Monterey for Driscoll Strawberry Associates, the largest berry distributor in the world.

 

Most of Mr. Vasquez’s starter plants, or starts, come from the large, fumigated commercial nurseries adjacent to Mr. Rickert’s ranch.

 

Mr. Rickert and his supporters, Mr. Cochran and Larry Jacobs of Del Cabo Farms, argue in their letter to the Department of Agriculture that the National Organic Program should institute new regulations that offer an incentive for growers like Mr. Vasquez to buy organic stock — or, better yet, create a federal mandate that would require them to do so.

 

“Without clear direction from the N.O.P., small organic growers who choose to source organic strawberry starts grown without fumigants are unfairly punished,” the letter says.

 

Many organic growers say the issue is semantic. Once the plants bear fruit, they are not treated with synthetic chemicals, so the berries themselves can logically be considered pesticide-free.

 

But eco-conscious consumers may be expecting something more.

 

“Consumers are under the impression that workers and communities are being respected in the process of growing organic strawberries,” said Paul Towers, a spokesman for the Pesticide Action Network who initiated the letter.

 

More than a million pounds of methyl bromide was applied to strawberry nursery fields around the world in 2011, according to Environmental Protection Agency reports. Despite a worldwide phase-out, the fumigant continues to be used on crops in the United States including peppers and tomatoes, to prevent a “significant market disruption.” (The Pesticide Action Network is worried that methyl bromide will ultimately be replaced with methyl iodide, which is toxic, too.)

 

Mr. Rickert, who grew up surrounded by sprawling conventional fields, thought there must be a better way to grow strawberries. After graduating from college with a degree in plant science in 2002, he decided to start an organic nursery. “I saw a huge potential industry forming in front of my eyes,” he said.

 

Mr. Rickert lost his first crop to the soil fungus verticillium. But he soon developed a working system, rotating two million plants on eight acres grazed by organically-raised cattle. He thought he could easily sell the plants for $100 per thousand, or $8 more than the price of conventional plants.

 

But the market never materialized. Some of the growers he approached took his plants on a trial basis; some said no thanks. Almost no one ultimately made a purchase. Mr. Cochran was an exception, buying almost all his nursery crop from Mr. Rickert in 2009. The plants “were always excellent quality,” he said.

 

Two million plants is a lot of plants, however, and Mr. Cochran’s purchase had barely made a dent. Mr. Rickert complained about the situation to the California Certified Organic Farmers, the state’s largest organic certifying group, whose president had hailed his venture as “the start of a new era for organic strawberries” in 2005. Yet due to the looseness of the organic standards, they had no way to force growers to buy organic.

 

In 2009, desperate, Mr. Rickert slashed his prices. Still no takers. Finally, in February 2010, he stopped taking growers’ requests.

 

“It was a tough decision,” he said, leaning against a cattle pen. “But I felt I was not being supported by my fellow organic farmers.”

 

In fact, the only support Mr. Rickert got came after he had closed. In March 2010, the California Department of Pesticide Regulation chose to honor him for the organic methods he had applied to his nursery.

 

It was too late. For the next few months, he watched hundreds of thousands of his plants — and along with them, his hopes of becoming the state’s first large-scale organic nursery grower — waste away in the cooler.

 

Now, with the National Organic Program re-evaluating its standards, both farmers see an opportunity.

 

“I want them to know that I existed,” Mr. Rickert said. “That an organic strawberry is possible.”

 

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More Monsanto GM corn hit by pests

 

(stltoday.com) – A University of Illinois plant researcher says he has discovered more evidence that a genetically engineered corn is suffering damage from a pest it is designed to repel.

 

The discovery could mean bad news for Creve Couer-based Monsanto, which produces the product and has learned recently of growing evidence that 'superbugs" are becoming resistant to its corn.

 

"We need to take this seriously," said Mike Gray, an entomologist with the university who was asked by farmers to survey fields where corn plants were suffering from 'severe corn rootworm injury."

 

Last month, researchers from Iowa State University published a study showing that the western corn rootworm — a major crop pest and yield reducer — is surviving after ingesting an insecticidal toxin the corn plants are engineered to produce.

 

The corn, launched in 2003, is engineered to produce a protein known as the Cry3Bb1, derived from a bacterium known as Bacillus thuringiensis, or Bt. The rootworms ingest the roots of this Bt corn, and the protein is fatal.

 

The Iowa State researchers took rootworm found in Bt corn fields and bred them in a laboratory setting. The resulting rootworm survived after ingesting the protein.

 

The Iowa State findings were the first to show evidence of resistance, the researchers said.

 

Gray, however, is quick to point out that the rootworms found in the damaged Illinois fields have not yet been reproduced in the lab, so he cannot conclude that they have become resistant to the protein.

 

"It's important to not jump to the conclusion that they're resistant," he said. "This isn't the first time we've seen problems with Bt corn, and it could be other things."

 

Monsanto, in recent interviews, has said that the company is taking the problem seriously but said that the Iowa State study did not conclusively prove growing resistance.

 

Since its launch in 2003, Bt corn has been widely adopted by American farmers, who have embraced the product because it requires less pesticide applications and less crop rotation.

 

Critics have said government regulators should require farmers to grow more non-genetically engineered corn next to the Bt corn to prevent resistance from developing.

 

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The benefits of biotech to agriculture

 

(EurekaAlert.org) – The biotech industry boosted farming across the globe to the tune of almost $65 billion during the period 1996 to 2009, according to the latest analysis published in the International Journal of Biotechnology.

 

$65 billion is the increase in net farm income, the farm level benefit after paying for the seed and its biotech traits. The study's authors estimate that almost half of that was derived by farmers in the developing world.

 

Graham Brookes and Peter Barfoot of PG Economics Ltd., in Dorchester, UK, have investigated the economic impact at the farm level of agricultural biotechnology, looking at yields, key costs of production, direct farm income, indirect (non-pecuniary) farm level income effects and impacts on the production base of the four main crops of soybeans, corn, cotton and canola. Biotech has added 83 million and 130 million tonnes, respectively, to global production of soybeans and corn, they estimate. Net farm level economic benefits amounted to almost $11 billion in 2009 alone.

 

"Biotech, and specifically genetically modified (GM) crops has had a significant positive impact on farm income derived from a combination of enhanced productivity and efficiency gains," the team estimated. It has added 5.8% to the value of global production for the four main crops investigated, with cost savings being greatest for soy. In terms of the division between different parts of the world, the team reports that in 2009, 53.1% of the farm income benefits went to developing country farmers and the vast majority of those income gains were from GM insect-resistant cotton and GM herbicide-tolerant soybeans.

 

The team concedes that their estimate of benefits amounting to $65 billion is based on the assumption of average levels of weed and pest pressure. If the assumptions are varied to assume extremes of low weed and pest pressure in all years and high weed and pest pressure in all years, then then the farm level benefits from using biotech in agriculture during the period studied would fall within a range of about $58 billion to $73 billion.

 

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US corn growers blindsided by Bunge

 

(High Plains Journal) – Farmers across the Midwest were hit with an unwelcome surprise in recent weeks as they prepared to deliver their corn harvest to their local grain elevators. Some big grain companies--primarily Bunge--posted signs saying that the new corn variety, Agrisure Viptera, would not be accepted at their facilities. As a result, farmers who planted the popular insect-resistant corn have had to scramble to find alternatives.

 

Many farmers feel that Bunge has changed the rules in the middle of the game. Syngenta, the innovator of Viptera, is backing up the farmers who planted Syngenta seed in good faith with a lawsuit.

 

It's just the latest example of how tangled our international regulatory and trade system for biotech has become, the dangerous disincentives it is creating to the innovation and adoption of new plant technologies, and how farmers are now caught in the middle. Unless we get this straightened out, not only farmers, but the entire agricultural industry--one "bright spot" in a lagging U.S. economy, according to the Fed--will suffer.

 

The immediate problem originated this summer, when China suddenly entered the corn market with several purchases. Bunge is afraid that if the new trait ends up in shipments to China, that country either won't accept the grain, or more likely, will demand a lower price. Although China is still a minor part of the U.S. corn market, the unexpected imports have thrown a wrench in the works. This is because China, whose regulatory system generally lags behind the rest of the world, is not expected to approve the Viptera trait until spring next year.

 

Because foreign approvals are such a critical issue, in 2007, the Biotechnology Industry Organization, BIO, brokered an industry-wide agreement--which included the grain companies--specifying that biotech companies would not commercialize new traits until they achieved regulatory approval in major export destinations. China is not considered a major destination. Syngenta complied with the agreement, following both BIO and National Corn Growers Association, NCGA, guidelines, and secured approvals in Canada, Argentina, Brazil, Australia, Japan, Mexico, New Zealand, the Philippines, Korea and Taiwan.

 

In all my years as a farmer, I have never seen a major company take an action like Bunge's, and I fear it sets a very dangerous precedent. Corn is a commodity crop. As a farmer, you buy seed based on the traits you need for top production on your farm--insect resistance, herbicide tolerance, drought tolerance, etc.--and expect to be able to deliver your harvest to the grain elevator simply as "yellow #2 corn."

 

Suddenly, the rules have changed in the middle of the growing season just weeks ahead of harvest. I understand Bunge's desire to protect its profit margin, but there is a larger issue at stake. Bunge's action creates a huge disincentive for farmers to adopt new technologies. If I think a sudden shift in politics here, or in a buyer country, may tangle up the regulatory system and effectively "outlaw" my crop, I am not going to plant it. If farmers like me won't plant it, why should biotech companies invest $100 million dollars or more to innovate and develop new varieties?

 

U.S. agriculture leads the world precisely because we have adopted new varieties, developed by both biotechnology and other high technology breeding methods, and other farming technologies more readily than other nations. In the short term, U.S. grain companies need to manage grain so they do not damage incentives for farmers to adopt new varieties and biotech companies to innovate and develop them. Long term, nations that want to import U.S. grains to feed their growing populations need to embrace biotech as the safe technology it is. They also need to synchronize their regulatory process with the rest of the world. They may choose not to accept a new variety and pay a premium for non-biotech varieties as a "specialty" crop. Either way, the rules should be set before planting season.

 

What happened this year to Syngenta's corn could have happened last year to other new varieties introduced without Chinese approval and it can happen next year to anyone. We simply cannot continue to leave U.S. agriculture at the mercy of this tangled world of regulatory systems. We all need to work together to fix this problem quickly. Otherwise, the consequences for farmers, agriculture, and U.S. competitiveness are just too severe.

 

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