TEST CODE HERE

Growing weed resistance, a need to reduce seed costs, and the increasing demand for non-GMO crops from consumer markets are making non-GMO crops a serious consideration for many farmers. Given that profitability can vary quite significantly between the two types of crops, the decision about what to plant can make the difference between a crop year being profitable or not.

Based on our experience working with farmers, we have found there are five key areas for consideration when making this important planning decision.
1. Higher premiums for non-GMO crops. In 2015 premiums often ranged from $1 – $4/bu for non-GMO soybeans and $0.2 – $0.4/bu for non-GMO corn primarily due to increased demand. This rising demand, however, is being met by an increased supply, so premiums are likely to stabilize or go down.
2. Lower cost of non-GMO seeds. Savings from low germplasm costs can range from $10 – $15/acre for soybeans and $40 – $60/acre for corn.
3. Operational costs. Growing and selling non-GMO crops requires special handling and procedures. Cleaning out planters and harvesters, and keeping grain bins segregated imply higher operational costs, not to mention higher risks of making mistakes can wipe out potential gains. Based on our customers’ experiences, the extra time and costs can often range between $15 – $30/acre.
4. Input costs. Additionally, non-GMO crops typically require more sophisticated pest management programs. These additional expenses will vary by location, but in general non-GMO input costs are often more than $10/acre for soybeans and more than $20/acre for corn.
5. Yield potential. The most debatable aspect behind this decision is the potential yield differences between GMO and non-GMO programs. Yield differences between GMO and non-GMO seed will vary from farm to farm due to local pest pressure, management practices and other environmental factors. Quantifying these differences is difficult. As with most agronomic decisions, it is important to have good data and properly account for confounding effects. It is usually not good enough to just compare the yield differences between all GMO and non-GMO fields across a farm.
Will non-GMO crops be more profitable for everyone? Of course not, especially given the recent downward trend of premiums.  Should growers be considering the profitability of all of their cropping options right now? Absolutely, but doing so correctly takes a systematic, comprehensive approach that relies on effective data collection, management and analysis.
corn     soybeans
Figure 1: Costs and Benefits of non-GMO production compared to GMO production. This model assumes an average yield of 50 bu/acre for soybeans and an GMO price of $9.50/bu. For corn, our model assumes an average yield of 170 bu/acre for corn and an GMO price of $3.50/bu. All other expenses (not shown) are held equal.

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As a Product Manager, I regularly talk with large conventional row crop operations. But recently I had the opportunity to directly address a large group of organic bean growers in Michigan. Many more growers in the process of transitioning into organics were also in the audience – farmers are increasingly considering adopting organic farming practices as a way to protect margins in the face of low commodity crop prices and growing public demand for organics.

There is an obvious divide between organic and conventional farming, but the reality is that both groups face similar challenges in scaling their operations while meeting market and regulatory demands:
Operational complexity as a barrier to growth – Yes, organic farmers are likely to spend more time scouting each of their fields and managing weeds and pests than their conventional counterparts, but both groups need to consider the same operational challenges when considering the possibility of expanding: Should I plant more or fewer crops to be more profitable? Should I buy or lease land? How do I effectively manage a larger teams? Do we need more machinery, or can we do with the equipment we have?
Scaling professionally – Conventional or organic, all farmers face the challenge of having to productively and efficiently manage more acres if they want to grow profitably. Managing increasingly larger operations requires professional tools to remotely monitor field health, to communicate with larger and more distributed team, and to make smarter operational and agronomic decisions for each newly planted field.
Access to real-time information as a competitive advantage – All farmers are facing increasing tracking requirements. Complying with stricter environmental regulations or meeting end-users’ demands to know where their food comes from means farmers need to track and report activities down to the field level – and do so in real-time to avoid long hours of manual data input. Clear and easily shareable records can also have an impact in negotiations with third parties such as landowners, crop insurance agents, and certification agencies (critical for organic farms) that in the longer term will translate into sustainable advantages.
Today we signed our first 100% organic operation. We are excited to work with both organic and conventional growers to help them realize operational efficiencies and to scale their businesses to meet today’s, and tomorrow’s, market demands.

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