This is an update of my earlier blog entitled “GMOvs NonGMO: The Cost of Production. Earlier this year when the National Academies
of Science announced their Genetically Engineered Crop Study, and questioned
some of the yield benefits, I tweeted that I would update this blog. Yesterday,
I got a call from Michigan State University asking for the update because they
were reviewing it with a group of foreign agriculturalists who wanted “real
world” data from a real farmer. So that is my impetus for updating this blog.
We are between crops right now so I had the time to push the numbers for 2015.
When asked about “why we chose this…” or “why we
did that…” there are nuances to farming decisions that I don’t think
non-business owners understand because they don’t have experience working for
themselves and trying to make a business sustainable in every sense of the word
– environmentally, socially and economically. You can’t have one without the other
or the word is meaningless. The choice to purchase seed is driven by not only
the traits that the seed has but also the diversification of not putting all
your eggs in one basket so to speak. Choosing different varieties of corn or
soybeans, some with and some without GM traits is one of those means to spread
risk, be a steward of the traited technology, and reduce the risk of
herbicide/insecticide resistance. But the bottom line is we can only grow what
we have a market for. If there is a demand for high oleic soybeans and there is
a grain elevator in our region paying a premium for that trait, we’d be foolish
not to tap into that market. We can’t grow what there isn’t local
infrastructure and market to support. The best example for our farm is growing
canning tomatoes. We only grow canning tomatoes because there is a cannery in
Pennsylvania that provides the harvester and the transportation to get the
tomatoes to the cannery. Growing around 100 acres per year of tomatoes means
that a half million dollar harvester for tomatoes would never cash flow if we had to buy it ourselves, nor would
we ever afford the number of tractor trailer trucks needed to haul the volume
of tomatoes to the cannery. The contract only makes sense because the
infrastructure is provided for us to be able to grow tomatoes successfully.
The remainder of the text below is from my earlier 2014 blog with updated numbers in the charts to reflect our 2015 production and costs figures. Is it a perfect analysis? No. But for us these numbers help us determine year to year what performed well and how to make purchase and growing decisions for the next year based on overall performance. A family farm isn't sustainable if it isn't profitable. As I have said many times, what is the incentive for the next generation to return to the farm if the farm is in debt up to their eyeballs, operating in the red. Living on a farm is a lifestyle but is also has to provide a livable income for children to want to return and take over.
--------------------------------------------------------------------------------------------------------
"Recently I was asked to answer a question on GMO Answers regarding
what the productions costs are comparing GMO and nonGMO crops. For my family
farm, that specifically means corn or soybeans. The hay including alfalfa,
tomatoes, green beans, and grapes have not been genetically engineered, they
are "conventional" or traditional hybrids from other means of plant
breeding.
Answering the question in terms of costs
necessitates the entire picture of yield and price per bushel, otherwise a
farmer would have an incomplete picture by which to make business decisions
that impact the sustainability of the family farm. The other critical piece
that folks don't seem to grasp is the market demand in various regions. Farmers
grow what there is demand for, plain and simple. What markets are available in
our region and the products they want from farmers. Economics 101. We don't
grow what we can't sell. For us, there is greater demand for GMO derived feed
and imgredients than there is for nonGMO feed and ingredients. Strange isn't
it? You haven't heard that before have you? The media would lead you to believe
otherwise, but the media aren't connected to the farm community or its markets.
If you are believing only what you read in the media, then you are not seeing
the entire picture, just a very small slice of their pie, so to speak.
The data below is our data, no one else's data.
We can't make sustainable business decisions based on hypotheticals or someone
else's data. We make decisions for our farm based on our outcomes and
experiences. These figures are not everyone else's figures. These figures do
not extrapolate to our neighbors or farmers in other regions or states. These
figures are what drives our decision making and choices for the coming year. If
the market changes, we change our decision making process. If yield or costs
change, we change our decision making process. In the end, our goal is to have
healthy soils producing healthy foods and have a sustainable family farm to
leave for the next generation.
Will Rogers is credited with the quote:
"The farmer has to be an optimist or he wouldn't still be a
farmer." Optimistically, each winter we review our harvest data
comparing our crop yield by variety to our cost of production for that crop
that season, in consideration of the type of growing season we had, in order to
decide what seeds to purchase for the coming season.
Since 1998, we have been growing both GM and
non-GM corn and soybeans. (We don’t actually use the term “GM” or “GMO” since
all domesticated crops have been genetically modified, but am using the acronym
for the sake of this audience). We run the numbers ever year for every variety
and every crop because that’s the only way to run any successful business. We
collect the data on what worked and what didn’t work and make changes and
improvements or what many businesses call “continuous quality improvement.”
2014 & 2015 Corn Production Non-Irrigated
|
Cost Per Acre
|
2014
NonBt/HT Corn
|
2015 NonBt/HT Corn
|
2014
BT/HT corn
|
2015
Bt/HT corn
|
|
Seed
|
$65
|
$65
|
$114
|
$121
|
|
Fertilizer
|
$123
|
$102
|
$123
|
$102
|
|
Herbicide/Insecticide
|
$40
|
$35.50
|
$21
|
$25
|
|
Crop Insurance
|
$40
|
$26
|
$40
|
$26
|
|
Fertilizer Application
|
$7.50
|
$7.50
|
$7.50
|
$7.5
|
|
Planting
|
$28
|
$20
|
$28
|
$20
|
|
Nitrogen Application
|
$9.50
|
$10
|
$9.50
|
$10
|
|
Pesticide Application
|
$18.00*
|
$18
|
$9.00
|
$9
|
|
Harvest
|
$28.00
|
$28
|
$28.00
|
$28
|
|
Hauling
|
$25.00
|
$25
|
$25.00
|
$25
|
|
Drying
|
$60
|
$59
|
$60
|
$59
|
|
Land Rent
|
$150
|
$150
|
$150
|
$150
|
|
Total Cost of Inputs
|
$594/ac
|
$546
|
$615/ac
|
$582.50
|
|
BPA=bushels per acre
|
186 BPA
|
138 BPA
|
221 BPA
|
164 BPA
|
|
Current cash price/bu
(Salisbury, MD)
|
$4.01
|
$4.04
|
$4.01
|
$4.04
|
|
Gross Income/ac
|
$745.86
|
$557.52
|
$886.21
|
$662.56
|
|
Net Income Difference
|
$151.86
|
$11.52
|
$271
|
$80.06
|
|
|
|
|
|
|
*higher costs due to
additional spraying
2014 & 2015 Soybean Production Full season, Non-Irrigated
|
Cost Per Acre
|
2014
Non-GMO for Food
|
2015
NonGMO for Food
|
2014
GMO High Oleic
|
2015
GMO High Oleic
|
|
Seed
|
$41
|
$38
|
$53
|
$60
|
|
Fertilizer
|
$21
|
$18
|
$21
|
$18
|
|
Herbicide
|
$40
|
$28.50
|
$18
|
$18.50
|
|
Crop Insurance
|
$32
|
$26
|
$32
|
$26
|
|
Fertilizer application
|
$7.50
|
$7.50
|
$7.50
|
$7.50
|
|
Planting
|
$20
|
$20
|
$20
|
$20
|
|
Pesticide application
|
$24
|
$28
|
$18
|
$18
|
|
Harvest
|
$28
|
$28
|
$28
|
$28
|
|
Hauling
|
$18
|
$18
|
$9
|
$9
|
|
Land Rent
|
$150
|
$150
|
$150
|
$150
|
|
Total Cost of Inputs
|
$372.50
|
$362
|
$356.50
|
$355
|
|
Bushels/Ac (BPA)
|
35 BPA
|
34 BPA
|
55 BPA
|
45 BPA
|
|
Price/Bushel
|
$12.25
|
$11.76
|
$11.25
|
$10.26
|
|
Gross Income
|
$472.5
|
$423.36
|
$619
|
$461.70
|
|
Net Income Difference
|
$100
|
$61.36
|
$263
|
$90.70
|
(2015
Update: Different from the 2014 data, I removed “GMO for Feed, & GMO for
Seed” as we grew neither in 2015. Additionally, hauling costs for nonGMO were
increased due to the fact that they are in storage longer and require smaller,
more frequent trips to a seed cleaner, are bagged and sold by the pallet rather
than by the tractor trailer load)
The first year we planted Bt corn was 2000. As
you can see from the chart below, it has out-performed conventional corn every
single year. What is most noteworthy however, is the importance of its
performance in unfavorable growing years. We had drought conditions from
2010-2012. A healthy crop is a more productive crop and in bad years, that can
make the biggest difference to the financial sustainability of the family farm.
I previously had included our organic corn data in this chart but have since
removed it. We grew conventional, biotech, and organic corn simultaneously but
stopped our organic production in 2011. It average was below 50 bushels per
acre and makes a very poor comparison. We decertified our organic ground and
for that reason, I no longer include the data.
|
Corn (non-irrigated)
|
2000
|
2004
|
2010
(slight drought)
|
2011
(drought & hurricane)
|
2012
(drought)
|
2013
|
2014
|
2015
|
|
Biotech Acres
|
10
|
276
|
573
|
397
|
464
|
290
|
275
|
450
|
|
Avg Yield BPA
|
171
|
182
|
110
|
44
|
111
|
214
|
220
|
164
|
|
Conventional Acres
|
647
|
415
|
195
|
213
|
261
|
75
|
200
|
150
|
|
Avg Yield BPA
|
165
|
167
|
91
|
18
|
57
|
202
|
186
|
138
|
|
Biotech/Bt
Yield Advantage
|
6.4
|
15
|
19
|
26
|
54
|
12
|
34
|
26
|
|
Price/Bu
|
$2.35
|
$2.55
|
$5.18
|
$6.47
|
$7.40
|
$4.41
|
$4
|
$4.04
|
|
Net income difference
Due to yield
|
$15.04
|
$38.25
|
$98.42
|
$168.22
|
$399.60
|
$53
|
$136
|
$105.04
|
Likewise in our soybean production history, we
have consistently experienced a better yield in our GM soy over our non-GM soy.
We grow four “classes” of soy: soy for food, soy for feed, soy for seed, and a
specialty GM bean High Oleic (HO) acid beans. The HO beans go for feed but the
oil that is extracted is used in baking and frying which eliminates the
trans-fatty acids from using hydrogenated soybean oil as an ingredient. These
beans are kept segregated and true to their variety in order to have the highest
quality HO oil from the extraction process.
|
Soybeans (dryland)
|
1998
|
2000
|
2005
|
2010
(slight drought)
|
2011
(drought
& hurricane)
|
2012
(drought)
|
2013
|
2014
|
2015
|
|
Biotech Acreage
|
195
|
322
|
416
|
270
|
522
|
527
|
200
|
300
|
400
|
|
Yield bu/a
|
54.2
|
50.3
|
53.5
|
46
|
37
|
43
|
48
|
55
|
45
|
|
Conventional Acreage
|
156
|
184
|
213
|
306
|
750
|
675
|
175
|
100
|
200
|
|
Yield bu/a
|
48.2
|
43.2
|
46.3
|
36
|
34
|
36
|
25
|
35
|
34
|
|
Yield Difference
|
6 bu
|
7.1 bu
|
7.2 bu
|
10 bu
|
3 bu
|
7 bu
|
23
|
20
|
11
|
|
Price/Bushel
|
$6.90
|
$6.62
|
$7.25
|
$11.30
|
$12.52
|
$14.55
|
$13.55
|
$11.25
|
$10.26
|
|
Income Difference/
Acre
|
$41.40
|
$47.00
|
$52.20
|
$113.00
|
$37.56
|
$101.85
|
$312
|
$225
|
$113
|
Even when there is a premium involved with
growing a non-GM grain, due to better yields, GM has out-performed non-GM on
our farm every year. We have experienced higher yields in all of our GM crops
in the nearly 17 years we have been using the seeds. We grow what we have
market access to sell in our region. Our choice to buy seed is based on the
success of various seeds we have tried and well as University research
conducted in our area. We don’t pay much attention to data that comes from other
growing regions in the US because it generally isn’t relevant to the conditions
we experience. We use a “prove it” mentality in that we will give a seed a try
on a limited number of acres and do our own compare and contrast to our other
fields. Our decision making is balanced by diversity of the markets we can
access, the demand within those markets, and the productivity that we have seen
for ourselves to justify which type of seeds to plant each and every year.
As I said at the beginning, these are our costs
and our production figures. Don't assume they are the same for all farmers.
They are not.
