Big opportunities in agriculture, GM crops

North Dakota State University agricultural economist Bill Wilson sees big opportunities for agriculture and seed developers. Wilson, the Fifth Annual Daryl F. Kraft Lecturer, spoke at the University of Manitoba last week. He received his PhD there in 1980.  
photo: allan dawson

Feeding an exploding population is a problem that’s attracting investment and 
revenue to the sector, says the Fifth Annual Daryl F. Kraft Lecture series speaker

The “nine billion people problem” is a big opportunity for agriculture, especially developers of genetically modified crops, including wheat, North Dakota agricultural economist Bill Wilson says.

Crop consumption is growing at a faster rate than yield increases and agricultural research is earning a 25 per cent return on investment.

“That’s why agriculture is booming today,” the North Dakota State University agricultural economist and this year’s Daryl F. Kraft Lecture series speaker, said Oct. 30 at the University of Manitoba. “That’s why everybody is investing billions of dollars into agriculture. And that’s why it’s such a great opportunity for all you young people who are entering agriculture today.

“It’s a pretty positive story.”

The United Nations’ Food and Agricultural Organization (FAO) estimates food and feed production will have to increase 70 per cent to feed a population of nine billion people by 2050.

Crop yield increases now average just 1.5 per cent a year versus 3.5 per cent in the 1960s, despite farmers applying five times as much fertilizer, said Wilson, who spends much of his time consulting for companies around the globe.

While crop yields continue to increase in North America they have stagnated in Europe and are falling in Australia, he said.

Biotechnology, which Wilson described as a “game changer,” will play a big part in reversing that trend. That’s why all the major seed companies are investing billions of dollars into genetically modified (GM) crops with traits such as drought tolerance, increased nitrogen efficiency and higher yields.

Most of their investments are in the United States because of strong laws protecting intellectual property, Wilson said. However, AgriBio, an Australian public-private venture, is four or five years ahead in developing drought-tolerant GM wheat. It yields 20 per cent better than conventional wheat under dry growing conditions. AgriBio wants a 25 per cent yield advantage before commercializing it.

Resistance to GM wheat started softening after the doubling and tripling of spring milling and durum wheat prices in 2008, Wilson said.

“At that time the bakers in America and bakers in other parts of the world said, ‘we’ve got to do something about this technology because what currently exists is not serving us very well,’” he said. “So they held hands, arm in arm and worked with the other entities and embraced the development of new technologies in wheat.”

Wilson told reporters opposition to GM wheat still exists “but it’s not insurmountable.”

GM technology is changing the geography of crop production, Wilson said — an observation not lost on Manitoba farmers who are steadily increasing their corn and soybean acres.

Corn and soybean production is steadily moving north and west. Cass County North Dakota has the most soybean production in the U.S., Wilson said. The state, once famous for its spring milling and durum wheat has seen acres of those crops fall 40 and 20 per cent, respectively.

It’s no surprise given last year’s estimated returns for corn was $175 an acre and soybeans $100 per acre compared to $50 an acre for wheat.

Private seed companies are now turning their attention to wheat, he said. In the U.S. universities have done most of the wheat variety development until now. In Canada it has been the federal government through Agriculture and Agri-Food Canada.

“It seems as though we’re having a lot of momentum towards privatization of breeding around the world,” Wilson said. “This occurred in Australia five or six years ago.

“There seems to be pressure in this country (Canada) to do something… and my guess would be towards further privatization in one way or another.”

In the U.S. joint public-private partnerships make sense, Wilson said, because the universities have the germplasm and the companies have the technology, “they have money and they have the motivation… and at the end of the day we’re (universities) very poor marketers of these types of technologies.”

With great opportunity comes increased risk. Grain markets are now much more volatile than they used to be, Wilson said.

“That means you can’t be winging it by the seat of your pants in farm management,” he said.

“Don’t get me wrong,” he told reporters. “There’s no fat hog there. For people who are smart, for people who are smart investors, smart farmers, smart in technology, it’s a good business. I don’t want to be a raging bull because people lose money doing that.”

But he said there’s a reason why U.S. financial guru Jim Rogers says instead of getting MBAs, young people should get agriculture degrees.

About the author

Reporter

Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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