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Export markets pointin' thumbs down on biotech corn

(February 2, 2001 -- Cropchoice news) -- Recent announcements that two of the top three grocery store chains in the United Kingdom will only sell meat products from livestock fed non-GMO feeds underscores how export markets for U.S. farmers continue to diminish, according to the American Corn Growers Association.

The mad cow scare generated market optimism that the United Kingdom and Europe would buy more livestock and livestock feed from the United States. However, that optimism has dimmed with the challenge of segregating genetically modified corn and soybeans. Export opportunity doors are closing and corn prices are dropping. Last week, the price of corn in South Dakota dropped another 8 cents from the previous week, to a low of $1.50 per bushel. Yet U.S. corn exports are about 12 percent behind a year ago, said Dan McGuire, Program Director of the Association.

Grocery store chains Tesco and Asda announced they would be demanding 100 percent non-biotech fed livestock for all their meat and dairy products. Those two grocers hold 42 percent of the UK grocery market. In addition, most other chains are following suit, including Marks and Spencer and Safeway.

U.S. soybean exports to the E.U. dropped substantially between 1995 and 1999 while E.U. imports of Brazilian soybeans have greatly increased. The American Crop Growers Association is concerned that the E.U. and U.K. decision to feed only non-genetically engineered feeds may also have a negative effect on the U.S. ethanol industry and limit export opportunities for corn gluten, a high protein by-product of ethanol production.

"While U.S. export customers are demanding non-genetically modified commodities, U.S. biotechnology companies are continuing to encourage farmers to plant their genetically modified (GMO) products. That ‘ignore-the-customer’ approach is foolhardy. It’s drying up U.S. export opportunities and throwing away billions of dollars in exports. Of course, farmers, not biotech companies, get the final bill through low corn and soybean prices," McGuire said.

Last Friday’s gulf export bid for No.2 yellow corn was only $2.28/bushel according to the U.S. Department of Agriculture. That’s $.40/bushel below the 1999 average cost of producing a bushel of corn, which was $2.68/bushel, according to USDA’s Economic Research Service. Depending on which part of the country corn for export originates from, that export bid of $2.28/bu. was $.32, $.40, $.47, $.50 or more than $1.00 per bushel below the 1999 cost of production.

"U.S. corn exports are languishing and GMO-related issues are making the situation worse," McGuire said. "American farmers have a choice to make. They can watch export markets dissipate before their eyes or choose to serve their customers."

Source: American Corn Growers Association