The good and bad of technology
While waiting for crops and fields to dry this fall, farmers’ moods have been a bit foul. It has been a long fall already and harvest has hardly started. As one looks over 30 percent corn, white mold-infested soybeans and swampy conditions, the catchy advertising jingles of seed and chemical companies seem a bit offensive! The promises of technology can meet a cruel fate in the world of agriculture when Mother Nature sets the rules. Big “M” (Monsanto) stands out as the model, and sometimes the whipping boy, for advancing (or should I say forcing!) seed technology on farmers. Farmers for years have been at the mercy of agri-business in adopting and paying for new technologies.
Monsanto, no doubt has some of the brightest seed scientists in the world. They have been able to mesh seed genetics with biotechnology better than anyone. By introducing different traits to the plant which kill pests and provide herbicide resistance, they have definitely added value to the seed. The problem is their monopoly on providing value allows Big “M” to determine and set prices as they wish. They have a series of marketing agreements with other seed companies where they sell the technology and in a sense set the industry price.
Their “tech fees” charged to farmers above the cost of the seed are legendary in the industry for igniting the anger of farmers. What is perceived as value to Monsanto is a cost input to farmers. U.S. seed corn costs were $50/acre as recently as 2007 and will near $100/acre in 2010; that is nearly a 100 percent increase in four years! When corn had its run-up to $8/bu in 2007-08, Big “M” marketing decided to cash in on the farmer’s prosperity before he prospered!
It has always been a question in agriculture; what is new technology really worth and who should pay for it? When competition existed in the marketplace, technologies like hybrid seed, nitrogen fertilizers, confinement livestock, herbicides, computer records and no-till practices were affordable and added value above costs to a farmer’s bottom line. Fast forward to traited seed, variable-rate fertilizer, guidance systems, mega-machinery and the bottom line gets a bit fuzzy. Companies like Big “M” start looking out for Big “M” first and farmers second and the result is these astronomical price increases.
An ironic twist on the technology issue has occurred in the pork industry the past couple of years. A technology came along which could provide reduced feed costs to producers but would not be “regulated” by agri-business. DDGS (dried distiller grains with solubles) is the chief by-product of the ethanol industry. It is high in fat, protein and phosphorus and plentiful in supply. It replaces corn, soybean meal, and phosphorus in a swine feed ration very nicely and at a significant savings. Oddly, very few in the “industry” promoted feeding DDGS. Universities have done very little research on feeding different levels of the product. Feed companies, sensing a significant loss in business (as soybean meal and phosphorus are two of their biggest money-makers) pretended it didn’t exist or was not a good product.
Demonstrating “necessity is the mother of invention,” producers in extremely difficult economic times have turned to feeding DDGS to save costs and have found it to be an excellent feed replacement. The world must think so also as demonstrated by hundreds of ocean containers leaving the ethanol plants every day! Thus far the price of DDGS has been reasonable as ethanol plants sell it in a competitive environment for what the market will bear. Producers, themselves, have benefited greatly from being their own “scientists” and developed their own technology.
The world we live in today is a product of a technological whirlwind. Cellular phones, computers, GPS guidance and the Internet were but dreams just a few years ago. Notably, competition dropped the prices of all these products as the technology developed. Their uses expanded and society benefited. Eventually, Big “M” will get some competition and get a little less greedy, or history shows they will price themselves out of business.
Bob Elliott is a Bureau County pork producer.
