June 15, 2012

Conventional Soybeans Fill Niche in Mato Grosso

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

While nearly all the soybeans planted in the United States and Argentina are GMO varieties, there remains a segment of soybean producers in Brazil that still plant conventional soybeans (non-GMO). Most of the conventional soybean production in Brazil is in the western regions of the state of Mato Grosso, which it Brazil's largest soybean producing state.

According to the Brazilian Association of Non-GMO Grain Producers (Abrange), approximately 35% of the soybean produced in the state during the 2011/12 growing season was conventional soybeans and the organization expects it to total 30% in the 2012/13 growing season.

Of the three main soybean exporting nations in the world (United States, Brazil, Argentina), Mato Grosso is the primary growing region for conventional soybean production. A push to preserve an area for conventional soybean production began several years ago with the creation of the Soybean Free Program. Conventional soybean producers in Brazil were convinced that there would continue to be a niche market for non-GMO soybeans and that end users were willing to pay a premium for the product. For the last several years, there has been a premium for non-GMO soybeans produced in Brazil in the range of US$ 0.45 to US$ 0.70 per bushel.

The biggest challenge for conventional soybean production is how to keep the identity preserved all the way to the end consumer. Farmers in Mato Grosso are able to do that by growing the soybeans only in a limited area and then exporting them out of one or two Brazilian ports. Fifty percent of the conventional soybeans are grown in the western part of the state in the municipalities of Campo Novo dos Parecis and Diamantino.

Most of these conventional soybeans are then trucked to a barging operation on the Madeira River and then exported out of Brazil via ports on the Amazon River. The biggest consumers of conventional soybeans are the European Union and Japan.

Promoters of conventional soybean production argue that producers can actually make more money by growing high yielding conventional varieties as compared to GMO varieties by not having to pay a royalty for the GMO technology and by receiving a premium for their product. They feel that the conventional varieties can generate R$ 200 per hectare more than GMO varieties. They also point out that by growing conventional soybeans they can largely avoid the problem of developing herbicide resistant weeds.

The Brazilian agricultural research agency, Embrapa, has established a research program dedicated to conventional soybean development. The program includes the development of new high yielding conventional varieties as well as cultural practiced geared to conventional soybean production.