Since November, China has rejected more than a million metric tons of U.S. corn, citing the use of a certain trait of a genetically-modified corn seed the country has not approved for import. The National Grain and Feed Association says the rejected corn is costing almost $3 billion in economic losses for the U.S. agricultural industry. But as Despite the controversy over so-called GMO corn, it is not hurting current demand, or price.
Farmer Wendell Shauman knows that most of what he is starting to plant this year will eventually travel far from his cornfields in Illinois.
“We’re the largest corn producer in the world. We’re the best supply. We have the best infrastructure to deliver that," said Shauman.
Shauman says demand for U.S. corn used to feed livestock is up worldwide, except in the third largest market for it - China.
“We went from just minimal sales over there to rather significant ones over two or three years, and, now, just this year, it's dropped back to almost nothing," he said.
That drop is because China is rejecting shipments that include seed company Syngenta's Agrisure Viptera, a genetically modified trait that Shauman says, like other GMO seeds, gives farmers many advantages.
“They’re effective. They help us produce a better quality crop. Some of it increases yields. Some of it lowers costs. Some of it increases qualities. Some of it helps improve the environment because it limits the kinds of pesticides we use," said Shauman.
Though Shauman does not use the specific Syngenta seed, he knows a thing or two about GMO corn. He has a PhD in plant breeding and has served as past Chairman of the U.S. Grains Council. He’s traveled to China several times to represent U.S. farmers and believes the difficulty in getting China to accept this trait of GMO corn has more to do with Chinese bureaucracy than the product itself.
“They haven’t approved it, so they won’t accept it. Basically, they know there’s nothing wrong with it," he said.
“In the past, if China really needed the corn, they kind of looked the other way and would take any kind of corn," said Craig Turner.
GrainAnalyst Contributing Editor Craig Turner says corn prices initially dropped once news of the Chinese rejection spread.
"At the time, corn was trading at $4.20, $4.30 [a bushel], and after China basically said we’re not going to take this corn, there was real concern we were going to go below 4 dollars," he said.
The price has since rebounded despite continued restrictions in China. But farmer Wendell Shauman says, even though the situation has not negatively affected prices, it has cast a shadow over farmers who use the trait, and grain companies that accept it.
“You almost have to be foolish to be a grain company now that wants to send corn to China, because there’s only about two percent of the total market that’s planted in this trait. But it's planted all over the country. It's just dispersed randomly, so it’s very hard to source corn that you can be sure doesn’t have some of this in there," said Shauman.
Shauman says, to provide stability, he would like to see an international standard on accepting GMO corn which could end the uncertainty farmers face in the marketplace so they can focus more on that other great uncertainty… the weather.