* Burndown with Prowl, 2,4-D and Roundup Ultra, $19.40 per acre
* June spray, 2 pints/acre Roundup Ultra, $15.31
* July re-spray 1 pint, $9.06
* Various adjuvants in the above prices
* Seed with $5.00 tech fee, $25.00.
Total cost per acre, $68.77 -- about 3-time the average cost of
soybean weed management less than a decade ago. Tables in my Illinois
speech show how soybean weed plus seed costs have taken off since 1996
(available in PDF format at www.pmac.net/IWFS.pdf). In preparing for my
Illinois speech, I looked at most mid-western land grant websites to find
current information on the economics of weed management and found very
little. I wonder why, given the price-squeeze facing most growers today.
Two farmers on a reactor panel accused me of making the numbers up
and/or working as an agent for American Cyanamid. I didn't, I'm not. The
numbers came from the Adair County (Iowa) Soybean Association, were done by
the association's staff and were handed out at a recent field day. They
were passed on to me by an Iowa State scientist in attendance.
After being strongly criticized, I got one of the growers to promise
to share the costs of his RR soybean program, which he swears by, despite
the yield drag (which he acknowledges). To make a long story short, the
only major differences in costs were they do not include the Prowl in the
burndown in eastern Illinois, and Monsanto provides the July re-spray free.
Plus, if his field fails for any reason, Monsanto provides the seed for the
replanting. The grower said the program is a great deal, in effect
guaranteeing weed control and offering quasi-crop insurance.
Friends and colleagues --I am very interested in hearing about the
various deals, incentives, guarantees being offered in association with
herbicide tolerant and Bt-transgenic plant varieties and associated
marketing programs, some of which are getting pretty elaborate. I am
wondering whether farmers in the eastern corn belt are basically getting a
better deal than farmers in Iowa, and I also wonder how many fields are
going to be sprayed three or more times this next season with Roundup and
how many of these are going to be in effect "free."
A request over the next couple of months --
* Please e-mail to me directly, or post to Sanet if you like, information
and details on the local programs being offered growers in your area,
pounds/rates applied, and costs.
If I am able to access information across states of these programs,
and local variations, I will compile and summarize all such programs by
state and place the results on one of our webpages. I am not sure what we
will learn, but I am already curious.
Last, on the Monsanto front, I was told recently by an authoritative
source within the seed-pesticide industry that Monsanto must commit at least
$700 million from its annual operating profits to cover costs associated
with recent merger activity ($7 billion plus spent on seed/biotech assets).
These costs include interest on debt and money for dividends; if the company
fails to provide an acceptable rate of return, its debt rating will fall and
its cost of capital will rise.
Monsanto spends $300 million plus a year on ag research. Its gross
U.S. pesticide sales in 1998 were under $1.4 billion. How is the company
going to cover $1 billion in ag-related debt service/capital costs plus
research from a revenue base of $1.4 billion? Foreign sales will help, of
course, but the numbers still don't add up, which explains, I suspect why
Monsanto is selling off assets and laying off 1,700 people.
cmb
Charles Benbrook 208-263-5236 (voice)
Benbrook Consulting Services 208-263-7342 (fax)
5085 Upper Pack River Road benbrook@hillnet.com [e-mail]
Sandpoint, Idaho 83864 http://www.pmac.net
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