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According to suppliers of identity preserved (IP) grains, the growing demand for crops to make biofuels, particularly corn to make ethanol, could reduce acreage for IP soybeans in the coming year. “With producers getting premiums to grow crops for biofuels, premiums must even be higher for IP, non-GMO,” says Jennifer Tesch, marketing director, SK Food International.

More corn acreage

More acreage will be planted with corn in 2007, which will reduce acreage for IP soybeans. “There will be upward pressure on premiums due to the switch to corn and increasing production of GM beans,” says Jim Traub, US office manager, Huron Commodities. “There will be a challenge to isolate non-GMO acres for Japanese and other markets.”

“We lose more IP acres when farmers switch from soybeans to corn. It’s going to be harder to procure IP soybean acres,” says Laverne Klecker,
grain manager, SunOpta Grains and Foods Group.

Klecker says the higher commodity prices will discourage farmers from growing IP soybeans. “The higher the commodity prices, they find more reasons to not raise IP.”

Some suppliers wonder if manufacturers will pay the higher premiums. “I don’t know what endusers are willing to pay,” says Chad Stannard,
grain merchandiser for value added grains, Pattison Bros.

“We’ve been thinking about how to overcome that,” says
Tesch.

The higher prices could cause buyers to look for sources of IP, non-GMO soybeans outside the US.

Stannard says some manufacturers may opt not to buy non-GMO soybeans and look at other protein sources.

Strong demand

Despite the challenges, suppliers say demand for IP, non-GMO remains strong. “The demand from manufacturers continues to grow, but we need to find common ground(over the premiums),” says Tesch.

“We won’t have any problems contracting for production,” says Klecker.

“Demand is stable but origination is getting tighter with corn acres going into the ground,” says Christian Dagenais, trading manager, Leblanc & Lafrance/Bunge.

“Food companies still want non-GMO soybeans,” says Steve Ford, president, Stonebridge, Ltd. However, Ford is concerned that the requirement for non-GMO will eventually disappear. “I’m not convinced
that the general public cares about GMOs,” he says.

Japan continues to be the largest market for IP soybeans, but Traub says other Asian markets don’t want to pay premiums. “They say, ‘yes, we want non-GMO, but we can’t afford it.’”

Ford says the Japanese are not that strict with non-GMO requirements. “Buyers will complain about GMO contamination in soybeans used to make tofu and miso, but in the crush market (for meal and oil), there is no mention of GMO contamination,” he says.

Europe is much more strict about non-GMO requirements. Ford says one buyer from Italy required a 0.1% tolerance, which Ford calls unrealistic. Traub also says Europe is a tougher market. “It’s hard
to separate GMOs from politics there,” he says.

Europe has been buying the bulk of its IP, non-GMO soybeans from Brazil. But Dagenais says European buyers are now looking at other sources, such as Canada, to diversify their risk and also because Brazil has been growing more GM soybeans.

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