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Corn+Soybean Digest

Non-GMO Soybean Premiums Don't Cover Segregation Cost

So far, premiums paid for non-GMO soybeans don't pay the cost of segregating them.

That's a conclusion by Joe Parcell, a University of Missouri-Columbia extension economist.

Parcell has been charting the premiums paid for non-GMO soybeans on the Tokyo Grain Exchange, the only market where futures contracts for non-GMO crops are publicly traded. Trading began May 15. The premium, compared with conventional soybeans, so far has averaged between 35› and 40›/bu, with a high of 61› in early August.

The premium should cover the cost of segregating and preserving the soybeans at all levels from the U.S. farm to the Japanese buyer, says Parcell. But he doesn't see that happening.

Earlier this year, USDA estimated that it costs 54›/bu at the farm level to segregate identity-preserved soybeans. Other economists have estimated that it costs another $1 for the local elevator to maintain segregation, plus exporters and shippers need to charge more.

"I've heard producers say they were offered a 20› premium per bushel," says Parcell. "That won't begin to cover the cost."

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