Forecasting the grain markets and discussing GMO misconceptions: The Spokesman Speaks Podcast, Episode 6

Narrator: Welcome to The Spokesman Speaks, a podcast from Iowa's leading agricultural news source, brought to you by the Iowa Farm Bureau. Now here's your host, Laurie Johns.

Laurie Johns: Welcome to The Spokesman Speaks podcast. This is our February 11th edition. Thanks for tuning in. Today's episode features a Grain Market Outlook from Dr. Chad Hart, an ag economists at Iowa State University and Dr. Alison Van Eenennaam. She's a professor of animal biotechnology and genomics at UC Davis. We also want to alert your attention to a new series of workshops that Farm Bureau is going to be offering at locations all around the state starting later this month. Late last year, you know, Congress passed a new farm bill and that leaves farmers with some decisions to make regarding the risk management programs that are going to work for them. Iowa Farm Bureau's Decision Farm Bill workshops will help you make those critical decisions. The first workshops are coming up February 26. That's going to be in Manchester and Peosta. And then there's another one March 5th and that's in Redland. With more locations being announced in the coming days and weeks, so be sure to check out your Spokesman for more about that. We're going to bring in Farm Bureau Commodity Services Manager Ed Kordick to talk more about these farm bill workshops in our next podcast episode, but we wanted you to be aware that they're starting soon. So, for more information, check out IowaFarmBureau.com/farmbill. All right, now let's turn to this week's interviews. If you're a corn and soybean farmer, how can you plan now to be sure you're taking advantage of market opportunities in 2019? Spokesman Editor Dirck Steimel caught up with ISU Economists Chad Hart at Iowa Farm Bureau's Young Farmer Conference to discuss that question and more. Let's listen.

Dirck Steimel: 2019 appears to be shaping up as another volatile year in the grain markets. What do you think are the biggest risks and opportunities in the corn and soybean markets right now?

Chad Hart: Well as I'm looking at in both the risk and opportunities are both in trade to me. As you're looking at trade right now, we're definitely seeing the risk involved there. With what's happened in the soybean market, especially over the past seven months, you know, as we got in the tariff dispute with China, we have seen those trade markets sort of dry up there. But that also represents the opportunity as I'm looking as well when I'm looking at the growth we're seeing in other markets. For example here, if I take China out of the mix on the soybean side, actually the bulk of the soybean market is growing right now globally. When I look at the corn market, we're up about, I think 16, 17 percent in terms of our corn exports. We're seeing the same thing on the livestock side. We're seeing growth there. And so I think those opportunities are there when we look at the international marketplace, but we also have the challenge of working within that and especially wrestling with some economies that are almost as big as ours are. And that's our biggest issue here. And when we're looking at that risk is China, the opportunity is almost everywhere else.

Dirck Steimel: What are some steps that Iowa farmers can take to protect themselves from the risk and take advantage of any opportunities?

Dr. Chad Hart: Well, as I'm looking right now, for example, corn, I'm going to argue there are some pricing opportunities now. As I was looking, for example here, I'll pick on Eddyville since they email me their bids every day. I saw basically base, it's been the past month, from June until basically as far out as they go, their cash prices on the board, $3.70 or higher. Those are profitable prices. We have the opportunity even today to at least market in some new crop and lock in some profits as we're going forward this year. So there are definitely opportunities out there. Farmers are going to have to be fairly aggressive in capturing those. I think the other thing that farmers we're seeing do right now is they're on the soybean side, holding onto that crop, letting the market figure out how to work around China in order to gain some market share there. And then I'm also seeing farmers investigate, let's call them different opportunities, within the commodity markets. If there's any way I can specialize, for example, you know, we've seen some go down the non-GMO route. We've seen some go organic. You're even seeing some markets where they're trying to create identity for preservation there. And so we're looking for was a niche market within our bigger market that we can exploit to capture some sort of premium out there as we move through the next year.

Dirck Steimel: We've heard a lot about burdensome stock piles of corn and soybeans that are keeping a lid on prices. What's your view of the world supply demand situation right now?

Dr. Chad Hart: Well as we look at the world supply demand situation we have seen stocks build mainly because we aren't the only ones that have been producing big crops over the past few years. We've seen basically global crops have been very strong in terms of production in the last few years. But at the same time too global demand continues to grow as well and I think that's going to be the challenge here is that okay, we've had a really good run, if you will, for Mother Nature over the past few years. We've seen some small problems, but they haven't been big enough to slow down that production growth. Eventually that's going to balance out and I think when it balances out, it will not take long for these markets to turn around and go higher because demand has continued to grow. As we've talked about here in the export markets are looking actually very strong and that points to that growth in global demand and so yeah, we've got good stock piles right now, but that doesn't necessarily mean they're overly burdensome for the marketplace. As it stands, if we get one short crops somewhere, it will help balance things out very quickly.

Dirck Steimel: Are there any alternative crops or alternative markets that may offer some opportunities?

Dr. Chad Hart: We're always looking for that third crop and I think the challenge right now is it's really hard to make a case for those right now. There are certain niches where if you're in a small local market where you can develop it, you can do that. We have seen, for example, more fruit and vegetable production moved back in here to Iowa as we've seen the farmer's markets grow. But as far as for what's called a broad base for a third crop, we really don't have it yet. I know a lot of folks are excited about the potential for hemp. I think the biggest concern there would be there's just very undeveloped markets there and for the markets that everybody's attracted to, it will just take a very small amount of production to fill them. And I think that's always going to be the challenge as we look here. The reason corn and soybeans dominate the landscape is because they're one, relatively easy to grow. Two, produce themselves in very large quantities. Three, are very flexible crops that can be used in a variety of ways, which meant they were easy to move within a variety of markets. When you're looking at other crops or alternative crops, that's going to be the challenge, can they be as flexible as corn and soybeans because if they're not, they're going to have a hard time competing on the Iowa landscape.

Laurie Johns: Smart Guy, right? We appreciate Dr. Hart looking into his crystal ball for us as well as offering some really unique insights into that much discussed hemp market. Making a lot of headlines. Pretty fascinating stuff. For markets, we turn to another issue that always gets farmers talking, the use of biotechnology. Consumers have a lot of questions about it. Media too often gets it wrong when they do stories about biotech and farming innovation. Dr. Alison Van Eenennaam is a professor at UC Davis and she's a nationally recognized expert on biotechnology. In fact, a couple of years ago, she received a Borlaug Communication Award during the World Food Prize. Clearly media and all of us can learn a thing or two from this amazing and very approachable scientist. Dr. Van Eenennaam was the keynote speaker at this year's Pork Congress and I was fortunate to be able to borrow a few minutes of her time afterwards. The Pork Congress is a pretty hoppin place and you're going to notice that from the audio, but hey, if you missed the Pork Congress, you're gonna feel like you're really right there. And you know me, I never let a little crowd get in the way of a good story. We all need to hear what she says. Check it out. So I'm here with Dr. Van Eenennaam and you just got done with your presentation and it was fascinating stuff. There's so much misinformation out there about science and about livestock farming and is it all driven by fear? You've had so much experience about this. Tell us a little bit about it.

Dr. Van Eenennaam: Sure. Yeah. Working in genetics, I've obviously been involved in the GMO discussion. And sitting back, I've been in my job 20 years and watching the misinformation. Where that's coming from is often it's fear driven campaigns, often by competing business interests that want you to buy their better stuff, and you know, don't buy this, it's going to give you cancer, buy my stuff kind of thing that's got no scientific validity to it. But it sounds terrifying to a consumer and in the absence of any other information, they do the sensible thing and avoid a product because someone's cast dispersions about it and it's really very disingenuous. And I think the thing that concerns me the most as a scientist is that there are marketing decisions being made by these people that are actually going counter to what I think are the shared values of most consumers. So most consumers obviously want safe food that's not even a negotiable item, but they would like it to be raised in a sustainable way with the lowest environmental footprint and yet they're being marketed products that are raised in a very inefficient way and being told that's more sustainable and it's like there's a contradiction there. And as a researcher, we're working on different innovations and the fear and misinformation by competing business interests about, for example, genetic technologies is actually blocking access to those technologies. And I actually see them almost working against science and improvements and we adopt so many technologies in every other aspect of our life and yet it seems when we want to introduce useful innovations to agriculture, there's this intense fear mongering around doing that and a suggestion that somehow it's going to be dangerous or unsafe in some way. That's not at all backed by science, but it's actually blocking us from making progress. And that has these huge opportunity costs as it relates to the environmental impact of agriculture. And so you could just take, one innovation is artificial insemination and the dairy cattle industry. If we hadn't enabled the use of that technology because it's artificial, right, it's not natural, you know, we would need something like three times as many dairy cows to produce the amount of milk we produce today and that's not good from an environmental perspective. And so I think that basically consumers are getting tricked into buying against their own best interests as it relates to the environmental footprint of agriculture. And it's just a really, really devious sales job, I think. It's really quite distressing because it actually has these huge world impacts on farmers.

Laurie Johns: It is. When you think of some of these entities out there. Slow growing chicken, what in the world?

Dr. Van Eenennaam: Yeah. Well that was a Whole Foods initiative to introduce slow growing chickens and their statement is that they're more healthy and more flavorful, but they don't have any data to back that up. And so basically these chickens are around about 14 extra days, I think, and they grow less quickly than chickens that are around for 14 less days. Nothing else about the life of the chicken changes. And so to me, I'm like how did that help A. the welfare of the chicken or B. alter the taste of the chicken? And this kind of, all you're doing really is walking backwards from what geneticists have been working to improve for the last 50 years. And so, you know, in one fell swoop you can take the technology or the productivity of a system backwards and it has a negative impact on cost, so it's more expensive. It's basically a more environmentally degrading and it's done nothing for the chicken. So it's like this double lose in sustainability for no benefit. And that's the exact opposite of the way that we needed to take our production systems.

Laurie Johns: Well, except for the company selling it. And the folks that are paid to market it, right?

Dr. Van Eenennaam: Yeah, yeah. Well they get this short term market advantages is kind of how it happens. So this absence labeling and I brought up recombinant bovine somatotropin and so there was, you know, our milk is made without that and there was this short term market advantage until eventually all milk had that label on it. And the technology was basically removed from the market. And so now nobody uses that technology, but the impact is the tradeoff is a seven percent increase in greenhouse gas emissions per glass of milk.

Laurie Johns: How many?

Dr. Van Eenennaam: Seven percent increase in greenhouse gas emissions relative to what it could have been if that technology had been allowed. And so there was nothing about that technology that was dangerous. It was, you know, basically misinformation around it having health impacts on the milk for consumers. Absolute garbage. But it created this fear based value added market of absence labels. But the ultimate end game now is nobody's getting that market advantage because nobody's using it. And the sustainability of our dairy systems just went down because now we're not producing as much milk per cow and so we need more cows to produce the same amount of milk or however you want to do that math. And so that's not the direction that we want to head. And it basically, you know, it also sends a message to technology developers, well, I don't want to develop technology if it's just going to be basically fear mongered out of the market and so you'll get less investment in technology development too which has these long range impacts on the sustainability of agriculture that I think people don't really appreciate.

Laurie Johns: Well you know, when you think of so much potential that it's just a shame that it hasn't come out yet because of this fear. And you talked about Enviropigs. I love that.

Van Eenennaam: So yeah, this was a product that was developed by the University of Guelph in Canada and basically it was a genetically engineered or GMO pig that produced a protein in its saliva that more efficiently degrades phytate, which is inorganic or undigestible phosphorous in its feed ration. So normally what happens is the pig eats it, it can't digest it and it goes out the back end. And basically if you produce this enzyme in your saliva, you're able to break down and more efficiently digest that phosphorus and it decreased fecal phosphorous by 75 percent, which is crazy. And obviously the pig got more nutrients out of its food, and so it was kind of a triple win, you know, and so the pig had less phosphorus in it's manure, so that's good for the environment, good for the farmer because the pigs are more able to get to the phosphorus and yet the groups were opposed to it and basically got it shelved and not going to market.

Laurie Johns: And the bacons the same?

Dr. Van Eenennaam: The bacons the same, of course. And so there was, there was no downside, but there was all these upsides and because of the furor over GMOs, it was blocked from coming to market. And so it's just an opportunity cost now that we could have had pigs at reduced 75 percent less phosphorus in the manure, but we don't. And so we didn't solve the problem of, you know, water pollution and phosphorous in pig manure. We just basically said no, you can't use that technology and didn't provide any other solution. And it's like, if you want to block technology, come up with a better idea and that's what will get adopted. So I'm, I guess I'm a scientist so I'm always trying to solve problems and to me to solve a problem isn't just, you can't do that. That didn't solve the problem that just blocked the one solution.

Laurie Johns: And I can't even imagine grocery shopping with you, seeing the labels.

Dr. Van Eenennaam: I don't, I can't even go in the grocery store anymore because the fear based marketing and the misinformation and that stupid non-GMO butterfly on products that had no chance of ever being genetically modified, it's just the biggest consumer hoax there is because you put a label on something that had no chance of being GMO in the first place. I don't know. I can think of many examples, but you know, fruits and vegetables for the most part or beans. And there's that butterfly on there, there was no chance that product could have been genetically modified and yet there'll be a price elevation because it's better for you because it's non-GMO. Well that's garbage to start with. And why is it more expensive? It wasn't there in the first place. So why are you adding that cost on there to consumers?

Laurie Johns: I've seen GMO free labels on a bottle of water.

Dr. Van Eenennaam: Right? Yeah. Well I, yeah, you see it on all sorts of things. But someone, I just did a study, and if you did an annual budget for groceries for a family of four in America and you selected the non-GMO labeled versus just conventional, it's about a $10,000 increase in the cost of your annual grocery budget and that might be fine for people that have disposable income, but that's a huge cost for people that are on the lower end of the income scale. And I think what's happening is these groups are creating fear around things like GMO or you know, minuscule residues of pesticide on foods and people are being driven away from healthy food choices like fruits and vegetables and they're not replacing them, they're just not buying fruits and vegetables because they can't afford the more expensive, you know, non-GMO ones or the organically labeled. And then they're avoiding, oh I heard you know that this is a really bad one, the dirty dozen, you know, I'm not going to buy strawberries. And then it's like, so they don't give their families fruits and vegetables and that's the exact opposite direction that we want the dietary choices to go and that to me is like the most disingenuous way to make a living is to create fear so that you buy my product but in fact the fear is not based in any science or evidence is just me basically saying that my competitor's product will do something bad, you know, give you cancer, whatever, and so you should buy my product. It's actually snake oil sales.

Laurie Johns: It is. When you think of, you know, there are people that like to be afraid. They like roller coasters. They like lizards with six inches. They like that, you know. But for the rest of the, I'd like to think the common sense Iowans out there listening to this podcast Spokesman Speaks, they know that there is a better way. What would be your advice to, let's say farmers out there, folks out there listening. Where can they start? What should they do?

Dr. Van Eenennaam: Well, I mean, I think if you look at the people that people pay attention to, they tend to be charismatic storytellers. And they get their information across by a story. And people love stories. And so I think that farmers have good stories. Most people have no idea how food's raised and in fact I think that the people that are most effected by blocking innovation in agriculture are farmers. So let's say we go back to the good old days of 1950 and we have to hand weed and we can't use tractors anymore because that's how it should be. Who gets impacted by that? It's the farmers. And so if you say suddenly you can't use, you know, a technology, you're not allowed to have disease-resistant pigs because we don't like gene editing, it's the farmers who then get the poorest pigs that have no genetic alternative in terms of disease resistance. So I think that that story is very compelling and I think what's lacking is the discussion of the trade-offs associated with blocking technology. So, okay, sure you can buy your butterfly label product, but be aware of the fact that that technology has decreased insecticide use on cotton globally by 50 percent. So if that's you share that value, you think that's not a good thing, by your non-GMO product. But if you actually think decreasing insecticide use globally on cotton is a good thing, be very aware that when you make that choice with the butterfly that you're kind of voting against your own interests, or your own stated interests and values.

Laurie Johns: Think it through.

Dr. Van Eenennaam: Think it through. Yeah, don't just go on autopilot at the supermarket because there's a lot of, it really is annoying to go shopping with me and I actually, my husband does the shopping because I, it just, it infuriates me because I spend my whole day doing research and trying to address problems and then I go to the supermarket and there's all this misinformation trying to con you into buying more expensive products based on misinformation. And it's the biggest con job I think that's been played on the American public in terms of what actually does contribute to sustainable food systems and what's got a label on it that says it does, is just, it's a total disconnect between the science and what you see on the supermarket shelves.

Laurie Johns: Well, and I love your story. I loved your information, your presentation, and I also loved your music videos. Now, how many scientists out there actually have music videos? You gotta give them, tell them what the name of it is and where to find it on Youtube.

Dr. Van Eenennaam: So I have, actually, probably the easiest way you can go to my webpage if you just search UC Davis animal biotechnology you'll get to my webpage and I have all my music videos there. But I think the one you were alluding to is one called Were Those the Days My Friend, it's set to an old 50's song and it kind of contrast the good old days production systems with modern production systems and what the trade-offs are or would have been if we hadn't taken up innovation in agriculture and kind of puts it in the perspective of were they really the good old days or is that a romanticized vision of what the fifties were like because it wasn't a great time and food insecurity was real. And I think we've got to a situation where so many people have never experienced food insecurity that they almost take it for granted. I think we see the same thing with vaccination discussions. So people will avoid vaccinations for their kids without really appreciating the dangers associated with these diseases because they've never seen someone with polio. And if you've seen someone with polio, you know, it's like, that changes your mindset forever. And if you've seen hunger, if you've traveled in Africa, for example, and seen hunger, I think it fundamentally changes how you think about things. And I just, I fear that we have forgotten that we're very privileged to have the food choices that we have and that we just ignore it and take for granted that there's always going to be this abundant cornucopia in our supermarkets and we're very, very lucky.

Laurie Johns: Shows why we need to tell our story about what we do, how we farm, how we raise our livestock. It's a very big deal and the Doctor certainly agrees with it. And you can practically feel her passion for this issue. It's easy to see why she is a nationally renowned expert on biotech. And it's good to have her on our side. Well, we've reached the end of this episode of The Spokesman Speaks Podcast. Be sure to join us for our next episode on February 25th when we'll share the details of her upcoming farm bill workshops and more. Remember that if you'd like to learn more about those workshops before that time again, here it is. You ready for the website? IowaFarmBureau.com/farmbill. Until next time, thanks for reading The Spokesman. Thanks for all the great stories and inspiration, and thanks for listening to The Spokesman Speaks.

Narrator: Thank you for listening to The Spokesman Speaks, a podcast by Iowa Farm Bureau. Check out more podcasts and articles from The Spokesman at IowaFarmBureau.com/Spokesman. You can also find and subscribe to The Spokesman Speaks Podcast in the Apple Podcasts app, Google Play, and other popular podcast apps. We appreciate your ratings and reviews and welcome your feedback at podcast@ifbf.org.