Will Identity Preserved crops pay in 2016?

The non-GMO soybean premium has taken another dip this winter.

Our initial crop plans in December included many Identity Preserved (IP) acres. However, we are re-evaluating that situation.

First and foremost, we have been having trouble with one of the processors we had considered shipping non-GMO corn to. They are only accepting deliveries on Saturdays. Second, the promised ‘competitive’ basis levels have not materialized. We are prepared for this to be a knock-down drag out.

There are other vendors out there who are much more reasonable, so we will look in their direction for stored 2015 as well as 2016 crops. For cost saving reasons, we will continue to grow non-GMO and hard endo corn. We see no revenue increase from the traited products.

Premium dip

The non-GMO soybean premium has taken another dip this winter. I’m told this is due to the downturn in the Chinese economy, the strong dollar, and the exchange rate. We are approaching the price level where we will likely turn down contracts. I have in fact declined some already. Herbicide expense, freight, segregation, and down time for clean out have surpassed the offered bonus.

Though we are committed to growing what the end user desires, we are not going to do it at a loss. There is certainly a ‘cost’ to the increased crop management required with IP.

We may switch out acres to corn, or take a look at Liberty beans just because of the simplicity in crop herbicide applications. Surprisingly, there isn’t a lot of seed cost savings with non-GMO soybeans.

We do plan to continue to produce seed soybeans. Next week shipping will commence for much of 2015 seed crop. Grades will in essence tell us how good of a job we did setting the combine. The week after, we begin shipping the clear hilum soybeans for export.

2016 has left us looking for alternatives. Nothing has jumped out yet, so we are open to suggestions. Decisions will have to be made shortly. I know guys want to get seed into our shed. However, should a last minute opportunity pop up, we will likely make the move.

The opinions of Kyle Stackhouse are not necessarily those of Farm Futures or Penton Agriculture.

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