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When does bt corn pay?

It all depends on prices and the unpredictable European corn borer.

Market uncertainty about genetically modified crops, low commodity prices and two years of extremely low European corn borer (ECB) pressure in the Midwest are causing farmers to rethink the $6 to $10/acre extra they pay for ECB-resistant Bt corn hybrids.

Take, for example, Ned Althaus of Bluffton, OH. He plans to cut his Bt corn plantings in half from 40% of his corn acreage in 1999 to less than 20% this spring. "Even though the Bt corn was our best-yielding crop, we're scared about being able to market it," Althaus says.

Last year about one-third of U.S. corn acreage was planted to Bt corn hybrids. Despite grower satisfaction with Bt corn performance, market conditions make it unlikely that the number of Bt acres will grow this year. As of mid-January, seed companies hadn't seen evidence of a big drop in Bt corn sales. Pioneer reports that invoicing of Bt hybrids is slightly below that of last year at this time, but is within 2% of last year's final sales. Novartis Seeds reports that the percentage of Bt corn orders this year is about the same as that of a year ago. However, because no one knows how much Bt corn and conventional corn was double-booked by farmers, the final tally won't be known until the seed is in the ground.

Low ECB levels Another factor cooling interest in Bt corn is two years of low ECB pressure across much of the Corn Belt. "Most producers realize that the densities of European corn borers have been quite low during the past two years, resulting in very little return on their investment in Bt corn," says Kevin Steffey, entomologist with University of Illinois extension. "Because we can't predict corn borer populations in advance, it's a game of odds for each individual grower. In areas where corn borers cause economic damage six or more times in a 10-year period, Bt corn may well pay worthwhile dividends in yield protection. However, in areas where economic infestations are less frequent, a grower would be wiser to scout and treat with an insecticide only when necessary."

ECB populations are next to impossible to predict from one year to the next. A few states report a general pattern of ECB populations building to a peak over several years and then trailing off over another several years before building again.

Figure your break-even return A 1998 Iowa Crop Survey of 800 Iowa farmers showed no economic advantage or disadvantage to planting Bt corn in 1998, a year of historically low ECB infestation in Iowa. Although the average yield for Bt corn was 160.4 bu./acre compared with 147.7 bu./acre for non-Bt corn, higher costs for Bt corn kept its return similar to that for conventional corn, says Mike Duffy, ag economist with the Leopold Center at Iowa State University.

In a six-state survey of farmers growing Bt corn in 1998, 49% said the economic return of Bt corn was better than that of similar non-Bt corn hybrids. Twenty-six percent said returns were similar between Bt and non-Bt hybrids, and 16% said returns were worse with Bt hybrids. The remaining 10% of the farmers surveyed said they did not know how the economic returns compared. Land grant universities conducted the survey in Illinois, Iowa, Minnesota, Nebraska, Kansas and Pennsylvania. Only 7% of the growers in this study said Bt corn yielded less than similar non-Bt hybrids.

Jack Bernens, Novartis Seeds, contends, "Even with the low prices and low corn borer pressure experienced in '98 and '99, the average yield benefit of about 4% for Bt corn indicates farmers are still breaking even with this technology. When European corn borer populations cycle up again like they did in '96 and '97, farmers will reap significant returns." He notes that Novartis's Bt hybrids have yielded on average 8.1 bu./acre more than non-Bt isoline hybrids across all infestation levels in 6,133 trials conducted over the last five years.

In the last three years, Pioneer has seen an 8.7% yield advantage for YieldGard Bt hybrids compared with genetic isolines with pressure of 1 ECB cavity/plant. In 47,964 on-farm side-by-side comparisons in 1999, Pioneer YieldGard Bt hybrids yielded on average 7.5 bu./acre more than competitor non-Bt hybrids, the company reports.

Those advantages are less in low ECB infestation years and greater in high ECB infestation years. The Pioneer research trials show a 4-bu./acre yield advantage under low ECB infestation levels, a 13-bu./acre yield advantage under medium infestation levels and a 29-bu./acre yield advantage under high infestation levels. Similarly, five years of Novartis trials show a 5.2-bu./acre yield advantage for Bt corn under low infestation levels, an 8.8-bu./acre yield advantage under medium infestation and a 13.2-bu./acre yield advantage under high ECB infestation.

With a 4-bu./acre yield advantage and a $1.80/bu. corn price, growers could pay up to $7.20/acre extra for Bt seed and still break even. Bernens estimates that, after discounts, most growers will pay about $6/acre more for Bt seed than conventional seed this year.

Some growers won't pay anything extra. A few seed companies will waive or rebate the technology fee for Bt corn if orders were placed by a certain date or if a certain herbicide was used. "Our tech fee is $24/unit, but we have a marketing program in place that fully refunds the technology fee if the farmer treats StarLink hybrids with Liberty herbicide," says Keith Newhouse, market manager of biotechnology for Aventis Crop Science. To qualify, growers must purchase at least 30 units and apply 24 oz./acre of Liberty. Aventis has licensed its StarLink Bt event to a number of seed companies including Garst, Croplan and Curry. Growers need to be aware that the StarLink Bt event is not approved in Europe and is only approved in the U.S. for feed and non-food industrial purposes.

Indirect benefits of Bt In addition to controlling ECB and southwestern corn borer, many of the Bt events offer suppression of secondary pests. According to Pioneer, hybrids with the YieldGard gene also offer high resistance to southern cornstalk borer, resistance to common stalk borer, intermediate resistance to corn earworm and strong resistance to fall armyworm. Aventis's StarLink event is the only Bt event to claim black cutworm suppression.

Bt corn also is helping farmers reduce their insecticide use. According to the annual six-state farm survey mentioned earlier, 26% of those farmers planting Bt corn had reduced their insecticide use in 1998. This was up from 13% in 1996. These numbers are significant because the majority of farmers don't treat ECB with insecticides.

Other studies show that Bt corn has the distinct health benefit of discouraging the buildup of mycotoxins - the potentially dangerous human and animal toxins produced by fungi that cause plant disease.

"How do we put a value on the environmental impact of Bt?" asks John Foster, professor of entomology with the University of Nebraska-Lincoln. "How do we put a dollar value on no worker exposure to pesticides, no pesticide training meetings, no groundwater contamination, less pesticides applied, no killing of beneficial insects? It may not be measured in the grain bin, but, in my opinion, it's real important to society."

Biotech 101 Consumer groups and environmentalists abroad have surprised the companies involved with developing Bt seed products with their strong opposition to genetically modified crops. "We expected environmental groups would embrace Bt technologies because they reduce the use of pesticides in crops and provide better environmental solutions," says Bernens. "In fact, they didn't embrace them and now we have to defend this technology to consumers. We want consumers to know the benefits that biotechnology brings to them and the environment."

To kick off January as National Biotechnology Month, Novartis developed a CD-ROM presentation, called A Short Course on Biotechnology, that dealers, farmers and other agriculturists can present to local civic groups. The presentation describes biotechnology and the regulatory process in easy-to-understand terms and then goes on to communicate "why biotech products are safe, why they're better, and why they offer so much promise for our future."

If you'd like a copy of the CD and promotional kit, call the National Biotechnology Month Service Center toll free at 888/989-4246. The presentation does not include any company name or reference and can be used by anyone in the ag industry.

Understanding the need to provide meaningful and relevant information to the public, the major seed companies are working together to develop a biotechnology education program for consumers.

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