Philip Shaw » Blog Archive » Soybeans From The Past: Non-GMO Canadian Soybeans Live Another Day

Soybeans From The Past: Non-GMO Canadian Soybeans Live Another Day

On a hot summer’s day, I never sit down for a whole glass of GMO cool-aid. Oh, yes, I’ve got some of that genetically modified super corn in my fields, but not my soybeans. The soybeans I grow are just like beans I grew 30 years ago. However, now that some big corporations have totally changed the global soybean market, those old beans are suddenly non-GMO food grade. As Granny told Jed, hey, there is value on those beans!

I find this whole non-GMO soybean phenomenon weird. Weird is a word I don’t get to use in the world of economics. However, when it comes to non-GMO soybeans in Ontario, Quebec, Manitoba and now the US, there is only one phrase to coin, “weird economics”.

Simply put growing non-GMO soybeans have the most profit potential in 2009 than almost any other row crop. Yes, you might get super duper yields with corn and still win that game, but growing non-gmo soybeans is the clear profit winner in 2009. The weird part is that really hasn’t changed, it has been true for years.

It’s weird because “glyphosate” changed everything. Glyphosate in the form of Roundup, Touchdown or whatever brand name you gave it changed the way many of us farm. At first, glyphosate killed quackgrass and it was very expensive. However, through the years the cost has moved down and with the introduction of “glyphosate tolerant” crops, it seemed the streets would be paved with GMO gold.

It didn’t quite turn out that way. Consumers didn’t want GMO but they wanted cheap food and for the most part they weren’t given a choice anyway. Farmers enjoyed GMO, but there were different legal environments in different countries, which effectively skewed farmer opportunities. At the end of the day, GMO’s were seemingly everywhere, locked down in many cases in the developed world by iron tight legal implications through technology agreements.

At the same time the GMO hype machinery was in overdrive. Simply put almost anything you listened to or read talked about new GMO technology and how that was going to change the world. Also too, as every agricultural economist knows, new technology is “always good.” That is a paradigm never argued about among economists. Shifting that supply or demand curve instead of moving along it, at times sends economists a twitter.

I must admit I’m one of them. The difference this time was the technology wasn’t for everybody. Also too, those shifting demand and supply curves didn’t act like they always do. However, at the end of the day it was the consumer who kicked up a fuss. Not every soybean consumer bought into the GMO dream.

In other words the introduction of GMO into the global soybean market segmented it into bigger and bigger pieces. Some of those pieces had big enough demand for Canadian farmers to remain relevant in. As time moved on those segments became increasingly relevant and non-GMO premiums increased to such an extent that in 2009 a real buzz has been created. For instance when you have non-gmo premiums, which are a third of your price, at the end of the day………we’re talking real money.

It’s weird because it was all caused by an “artificial” entry into the market. You could argue a soybean is a soybean, is a soybean. They all look like soybeans to me. However, and this is a pretty big however, the global consumer market is saying that’s not true. It might be a “pig in a Polk”, but for whatever reason in the consumer’s black box, a soybean is not a soybean is not a soybean. Yes, Jed, those old beans do have value, had we better move to Beverly?

Of course there is much more to this and soybeans continue to amaze. Soybean protein is preferred whether you are a chicken or a human. Soybean oil still has resonance regardless of all its competition from sunflower seeds and palm oil. Also too, there is research moving ahead to change the taste and consistency of certain soybeans so they are smooth and tasty. Both GMO and non-GMO have their place here.

The “hey Jed” analogy is only just that, because we all know the challenges of growing soybeans regardless of premiums. Also too, our American friends are getting back in the non-GMO game. You can see that by clicking (after you have thoroughly gone through this site) on www.soybeanpremiums.org. So what may seem mildly like gold today might turn into lead tomorrow. Market economics always win at the end of the day.

Looking ahead into my soybean crystal ball, I can see more and more segmentation. In Ontario, Quebec and Manitoba, it might be all about non-GMO now. However, there are multiple soybean platforms planned for the future. Despite current market non-GMO anomalies, there will be much more in the future. Soybeans as a food source have almost limitless possibilities. Finding your market niche within this puzzle will surely be the challenge.

This entry was posted on Friday, January 23rd, 2009 at 3:02 am and is filed under Under the Agridome. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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