Demand for non-GMO and other specialty or value enhanced corns remains steady while demand for organic corn is growing by 20% per year. A survey finds that GMO contamination is the biggest concern of US specialty corn farmers. These were several key findings of a report released by the US Grains Council.
The 2005-2006 Value Enhanced Corn Quality Report examined production and marketing of specialty corns, which include non-GMO, organic, white, waxy, hard endosperm/food grade, high oil, nutritionally enhanced, and high extractable starch. While non-GMO is considered its own category, the other specialty varieties are also non-GMO.
Strong farmer interest
Overall, specialty corn accounts for about 8% of all corn produced in the United States with about 4 million acres grown in 2005. Premium prices paid to farmers producing specialty corns ranged from $.05 for non-GMO corn up to $6.00 per bushel for organic with an average of $.10 to $.30 per bushel.
The report found that non- GMO corn has gained the biggest percentage of growers, while high oil growers have seen the biggest decline.
For 2006, the report projects stable levels of specialty corn production, higher premiums, and a continuation of strong farmer interest in growing specialty corns.
The report also finds that the future outlook for specialty corn, particularly organic, is strong.
A survey of farmers in Midwestern states found that 71% percent of specialty corn producers say they will continue growing specialty corn, and 38% of commodity corn producers say they plan to grow specialty corn in the future.
Farmers surveyed also are confident about the future of specialty corn production with 90% believing specialty corn production will either remain the same or increase.
Strong market for non-GMO in some countries
The report finds that segregated non-GMO corn remains a significant specialty corn, and demand for non-GMO remains steady due to consumer concerns over the safety of GM products.
In 2005, non-GMO corn was grown on 300,000 to 550,000 acres (121,000 to 223,000 hectares) in the US, and sold mostly to export markets.
The report states that there is a strong market for non- GMO corn in Japan and other GMO-sensitive nations.
Premiums paid for non- GMO corn in 2005 ranged from $.05 to $.20 per bushel. The report states that corn buyers are reluctant to pay higher prices, causing many farmers to hesitate growing non-GMO corn.
Other challenges facing non- GMO farmers include yield drag, crop isolation, and identity preservation (IP) requirements.
However, farmers have demonstrated a continued interest in growing non-GMO corn, based on premiums and strong product demand. A key factor making non-GMO corn production attractive to farmers is access to transportation options for shipping to export markets.
Demand for organic growing by 20%
Demand for organic corn parallels the growth of the organic industry as a whole with a 20% growth rate. However, the organic corn supply is increasing by 6-10%, creating a supply shortage.
Demand for both non- GMO and organic corn is driven by consumer concerns over the safety of genetically modified foods.
Organic corn was grown on an estimated 150,000 acres (61,000 hectares) in 2005, producing about 18 million bushels. About 60% of organic corn is grown under contract with 40% sold on the open market.
The main organic corn producing states are Minnesota, Wisconsin, Iowa, Texas, Ohio, and Illinois. Lesser amounts are produced in California, Colorado, Texas, and the northeastern US.
More farmers producing organic corn
The report states that organic corn premiums are "phenomenal" at more than $5.00 per bushel.
But organic production is more labor intensive than conventional production. As a result, many conventional farmers are reluctant to grow organic. Other hurdles mentioned by farmers include the learning curve required to grow organic, the need to find markets, IP challenges, and the perception that "real farmers don't grow organics," says Lynn Clarkson, president, Clarkson Grain.
Despite the hurdles, the report says that the number of farmers producing organic corn is increasing. Larger farms, motivated by organic's economic advantages, are beginning to enter the market.
Demand for organic corn will continue to grow. Organic corn supporters believe that 10% of the US corn crop will be organic by 2010, but the report states that 5% is more likely. Even the latter figure is more than half of current total specialty corn production.
In terms of acreage, organic corn ranks sixth out of the eight specialty corn varieties covered by the report (see Figure 1.). Hard endosperm/food grade corn ranks first with 1.2 to 1.55 million acres, followed by white with 600,000 to 700,000 acres, and waxy with 500,000 to 600,000.
GMO contamination biggest concern
A survey of specialty corn farmers found that their main concern was GMO contamination. These farmers must implement IP measures to ensure the non- GMO integrity of their crops.
There are concerns in some export markets about the US's ability to provide non-GMO corn due to GMO contamination, and some foreign buyers have begun looking for sources of non-GMO corn in other regions.
The report found that lateral flow "strip" tests are the most common method used to detect GMOs in corn samples. These tests are most often used as an initial screen to determine if GMOs are present. Quantifying the amount of GM material requires DNA-based PCR testing.
Some farmers surveyed believe there is greater "technology push" for GM corn varieties by biotechnology companies than there is "market pull" for them. On the other hand, there is significant market pull for organic corn.
Traceability and Identity Preservation
The report states that traceability and identity preservation are growing trends in the agriculture and food industries. Grain buyers, particularly in export markets, increasingly want more information about grain's origin, product content, and production methods. They also want assurance that the grain's unique identity, such as non-GMO status, has been preserved.
As a result, farmers and grain suppliers must implement systems to trace and identity preserve products from the seed through harvest and grain handling. US grain companies are implementing such systems. For example, Consolidated Grain & Barge has several grain elevator facilities that are ISO 9000 certified, and ADM has completed a USDA-Process Verification Program at several of its facilities. Many other US suppliers of specialty grains, large and small, implement IP systems.
Third-party certification programs that provide traceability, such as ISO and USDAProcess Verification, are increasing. Firms such as American Institute of Baking, Cert ID, and GeneScan provide IP and non-GMO certifications.
The report says there is potential for the US government to begin requiring that the grain handling system adopt mandatory traceability systems. It also says the ability to identity preserve products will continue to be important to compete in the global marketplace.
Organic food production is on the leading edge of these trends because traceability and identity preservation are built into the organic system with its USDA required certification.
Demands for Non-GMO Corn Remains Steady, Organic Increasing
By Ken Roseboro, Editor
The Non-GMO Report/ Writing Solutions, Inc., August 2006
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