Non-GMO and Organic Market Update for September 7, 2016

Non-GMO and Organic Market Update for September 7, 2016

Around the Markets

Organic corn trading is steady, picking up slightly ahead of new crop. Midwest organic corn prices are seen near $7.75 per bushel off the farm, and $8.75 delivered at elevators. While demand remains robust for both feed and food, imports from Eastern Europe continue to make up for the shortfall in supply. Mounting pressure from CBOT board prices should weigh on organic prices, as robust yields and a strong carryover are likely to keep prices capped near $8. Volume has picked up, according to the Commitment of Trader’s report released for the date ending August 30th—hedge fund traders continue to line up on the short side of conventional corn. Short futures and options positions now double that of long futures and options positions.

Midwest organic soybean prices remain steady, and continue to consolidate near in the $17.75-18.50 per bushel range. Robust consumption of organic chicken, milk, and eggs, is driving the demand for organic feed soybeans. Similar to corn, imports are offsetting the dearth of U.S. supply, relative to demand. Volume has been light, according to the COT.

In the News

Gatorade Goes Organic

PepsiCo announced that it would soon release an organic variety of Gatorade—“G-Organic”—consisting of only seven ingredients, including organic cane sugar. The drink will retail at 42% more than its traditional counterpart. (Business Insider).

Comprehensive Study into Non-GMO Environmental Impact

A team of researchers, at Midwest academic institutions, has published the results of a new analysis, comparing herbicide and pesticide usage in GE versus non-GE crops. The paper boasts a more robust method and dataset, versus much of the existing work. It is also set apart by the large temporal span of the surveys it analyzed—ranging from 1998-2011—versus prior research, which generally considers only a few years of data. Published in the journal Sciences Advances last month, the results found that GE, glyphosate-tolerant (GT) soybeans led to a raw increase of 28% in herbicide usage, over the timeframe examined, relative to non-GE varieties. GT maize herbicide raw usage decrease by 1.2% on the other hand, and insecticide-tolerant (IT) maize saw insecticide applications fall 10.4%.

Two other important factors were considered in the paper. First, the authors analyzed the Environmental Impact Quotient (EIQ), which weights combinations of different herb- and pesticides by degree of environmental impact. An effectively 0% difference was observed in EIQ-adjusted herbicides between GT and non-GT soybean adopters. GT corn saw an EIQ-adjusted decline of 9.8% herbicide usage, while IT corn saw EIQ-adjusted pesticides fall the same 10.4%. The paper also noted that, since the inception of GE crops, herbicide usage has been creeping persistently upwards in both corn and soybeans, while pesticides, conversely, have been steadily falling.

The latest results from Sciences Advances suggests that the environmental impact of GT and IT products has been net-neutral (soybeans) to net-positive (corn). Critics point out, however, that EIQ measures are often an inaccurate and cumbersome metric, and that pending issues, such as increasing weed and pest-resistance, are unquantifiable, and loom on the horizon. (NPR; Science Advances).

Campbell’s Fresh “Execution”

It was a tougher week for some organic corporates, beginning with Campbell’s quarterly earnings announcement. According the company’s CEO, Denise Morrison, the figures were “disappointing”. Morrison partially blamed poor performance in the Campbell Fresh division, which serves fresh and organic products, as the driver of the results—largely due to “execution issues”. The company conceived of Campbell Fresh as it observed consumer demand shifting away from some of its traditional, processed products. (Fortune).

Nature Valley Targeted by Consumer Groups

General Mills’ Nature Valley brand was the subject of a new lawsuit this week, filed by Beyond Pesticides, Moms Across America, and Organic Consumers Association. The agglomeration of interest groups claims that Nature Valley’s “all natural” branding of its products is deceptive, after trace amounts of glyphosate (0.45 ppm) were discovered in some of the label’s granola bars. (FoodBusinessNews).

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