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DAVID KRUSE

By Staff | Jul 9, 2010

Monsanto has had a history of throwing out claims that its soybean genetics produce higher yields and having difficulty substantiating them. When Monsanto first released RR1 genetics, there was a yield drag and everybody in the industry, including Monsanto agronomists, knew it.

They also knew why. The RR1 yield drag was eventually eliminated by improving the quality of the base varieties that the RR trait was bred into as well as the process used to add the genetics. It also helped that no research or development was put into non-GMO soybean varieties because why invest in something seed companies charge a tech fee for and farmers could save seed from.

I took a snippet of one of Monsanto’s ads with the words “higher yields,” and challenged it on my radio program. It scared the heck out of radio stations for whom Monsanto was their best ad customer; but I was right and they knew it. Frankly, I believe it was my CommStock Report challenging those ad claims that prompted Monsanto to remove them from their advertising. It also prompted a nice visit from Monsanto executives to Royal, Iowa.

I’m pro-GMO, pro-biotechnology and a good Monsanto customer on farms on two continents. That doesn’t mean that I don’t believe that Monsanto has too much market power and have long anticipated the trust investigation now undertaken from DOJ to sort it out.

Monsanto’s patent on RR1 soybeans runs out soon and they have introduced RR2 genetics with an ad campaign designed to convince farmers that RR2 is so superior to the old genetics that they will rush to pay Monsanto a bigger check and forget all about being able to soon access RR1 technology at no cost.

Monsanto is again claiming RR2 produces “higher yields,” specifically, 7 to11 percent higher.

That claim is enough to get farmers to try them, but they have to be right this time about those higher yields or their sales will collapse. Before, farmers didn’t care if RR varieties yielded a couple bushel lag, because they wanted the RR weed control program, so took the loss in yield in stride.

This time, if RR2 doesn’t deliver the higher yield, farmers don’t have to give up the RR program. They can continue to plant RR1 genetics at lower cost.

Monsanto got by the first time with their bogus claims about yield from RR1 soybean genetics. This time the Attorney General of the State of West Virginia says “they are probing whether or not the company engaged in unfair or deceptive practices in marketing its new genetically altered soybean seeds.

West Virginia officials noted that farmers had relied on advertising claims by Monsanto that its Roundup Ready 2 soybean seeds would yield 7 to 11 percent more than Monsanto’s original Roundup Ready soybeans.”

“My office is concerned that West Virginia farmers,” said the AG, “are paying much higher prices for soybeans with the Roundup Ready 2 trait when the yields do not live up to the claims and do not justify the increased prices.”

Others have challenged the higher yield representation, claiming not to have consistently found it last year, including university soybean Extension specialists. Enough field performance data has likely not been collected yet to prove or disapprove the claim.

Monsanto has enough of the seed out now that this year’s yield performance will be critical. We consistently raise 60 bushels-per-acre soybeans. A 7 to 11 percent increase is 64.2 to 66.6 bpa.

I planted a field to RR2 to get a feel for myself of how they perform. I do know that if RR2 does not perform at the 7 to 11 percent increase in yield claimed, that Monsanto will have a whole lot more to worry about than some truth in advertising investigation in West Virginia.

They pegged their soybean seed sales future on RR2 and if they are a dud, it won’t be just a minor repercussion to the company. They got RR1 genetics inserted into good varieties and yields eventually improved significantly so that farmers are now confident in yields. Again, it was the underlying variety and not the trait that made the most difference.

RR2 is, by my understanding, a trait package. It is genes other than RR that boost the yield. Wet conditions this year will be a good test of the defensive package of RR2 soybean genetics disease resistance.

They will let RR1 variety improvement wither on the vine like they did non-GMO varieties; so eventually their comparative yield claim for RR2 may come true. If they only put RR2 in the best new soybeans, and left RR1 to old varieties, they control the eventual yield comparison outcome.

Theoretically, we should see the national trendline yield jump 7 to 11 percent proportionally to the degree of adaptation of RR2 genetics. An immediate shift to RR2 with yield claims coming true would be bearish enough to soybean prices to cost producers money, wouldn’t it?

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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