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February 21, 2012

70% of Mato Grosso Soybeans are Roundup Ready

Farmers in the state of Mato Grosso planted 70% of their 2011/12 soybean crop to GMO soybean varieties (Roundup Ready), which was an increase of 13% compared to the 2010/11 growing season. According to the Mato Grosso Institute of Agricultural Economics (Imea), the total soybean acreage in the state will be 6.98 million hectares or 8.9% more than in 2010/11 and the total soybean production in the state will be approximately 22 million tons. Imea is estimating that the statewide soybean yield in the state will be 3,174 kg/ha or 46.0 bu/ac.

The reasons for the increased use of GMO soybean varieties is the fact that Roundup Ready soybeans require less overall herbicide applications and the herbicides used are cheaper than those used with conventional soybeans. Using Roundup Ready soybeans also gives the producer more leeway in when the herbicides need to be applied allowing for more flexibility during the planting season. On the other hand, farmers have to pay royalties to Monsanto for the Roundup Ready soybeans and the widespread use of the technology has led to the appearance of weeds species that are now resistant to Roundup herbicide.

The predominance of GMO soybean varieties also depends on where in the state the soybeans are grown. The state is very large and soybeans grown in different regions are exported from different ports in Brazil. Nearly all the soybeans that are exported from central and southern Mato Grosso make their way eventually to China and other Asian destinations. These soybeans are exported via the Port of Santos and the Port of Paranagua in southern Brazil. At both of these ports the GMO soybeans and the conventional soybeans are not kept separate because the end users do not differentiate between the two.

That is not the case for European customers who still want to buy conventional soybeans. In order to accommodate those customers, soybeans grown in the western part of the state are still predominately conventional varieties. These can be kept separate from GMO soybeans because they are shipped out of ports on the Amazon River, which are designated as GMO-free facilities. The European customers also are willing to pay a premium of approximately US$ 0.50 per bushel for the conventional soybeans.

In the case of corn, farmers choose to plant GMO corn hybrids or conventional hybrids based primarily on the cost of the seed and the expected yields. The more advanced corn technology cost more but it pays for itself with higher yields. Nearly all the corn in the state is grown as the safrinha crop which is planted after the soybeans are harvested. The more advanced stacked hybrids cost about 46% more than less advanced hybrids, but they yield 25% more in the end. The most advanced stacked hybrids cost about R$ 328 per hectare and their average yield is approximately 6,000 kg/ha or 92 bu/ac. The lower technology hybrids cost R$ 156 per hectare and their average yield is approximately 4,800 kg/ha or 74 bu/ac. The 1,200 kg/ha advantage more than pays for the additional seed cost.