"Die Woche [the newspaper interviewer]: What are the concrete benefits of
Frawley: For example, our biotech soybeans are resistant to roundup
herbicides. It has lowered the production cost of soybeans by 20%.
The farmers can now change their farming practices; they no longer
have to plough the soil, which reduces erosion. For the consumer, the
new product has helped to control the cost of a basic food commodity."
Having just completed and released a report on Roundup Ready soybean yield
drag (see Ag Biotech InfoNet at
<http://www.biotech-info.net/herbicide-tolerance.html#soy>, click on item
number 1; it is a PDF file), the above claim that RR soybeans have reduced
farmer's "production costs 20 percent" caught my eye. I have never heard
such a claim nor seen any research or analysis that even comes close to
supporting such a remarkable finding. If this were true, RR soybeans would
be among the most dramatic advances in agricultural profitability ever.
Based on my analysis, the RR soybean system technology fee, coupled with
the yield drag, result in increased costs between $20.00 and $35.00 per
acre on average across all farms adopting the technology.
To place Frawley's claim in perspective, I turned to official USDA soybean
cost of production data. All the data below are from the USDA website,
accessible at <http://www.econ.ag.gov/briefing/fbe/car/data/table7.wk1>.
This table presents historic soybean cost of production data for the North
Central U.S., the region where most U.S. soybeans are grown. Other tables
accessible through the ERS "Briefing Room" present data on other regions.
* 1997 full cost of production, what the ERS calls "total economic costs"
-- $249.58 per acre, or $5.45 per bushel based on the average yield that
year of 45.75 bushels. This was the highest average yield ever recorded,
so it somewhat understates costs per bushel over the last say five years.
* 20 percent of $249.58 costs per acre is $49.92; so RR soybeans reduce
costs by $49.92 according to Dr. Frawley.
* 1997 average seed plus chemicals cash expenses were $48.45 per acre. So
even if Monsanto gave away the seed and chemicals it still would not reduce
costs 20 percent, given the average 6 percent yield drag.
* Roundup Ready seed plus the technology fee definitely costs more than
otherwise genetically similar conventional varieties (and of course about 4
times more than on farms where growers replant seed from the prior crop
year). The best estimate is that the RR soybean seed plus technology fee
raises costs at least $8.00 per acre compared to otherwise similar seed.
So to compensate for an $8.00 premium, other costs would have to fall by
$57.92 -- or 73.4% of total variable cash expenses (total in 1997 was
$78.86, and covers seed, fertilizer, pesticides, custom operations, fuel,
electricity, repairs, hired labor).
* The only way RR soybeans could lower "costs of production [presumably per
bushel] 20 percent" would be by achieving a roughly 25% increase in yields.
That is obviously not happening, and not even Monsanto would make such a
While a few farmers experiencing problems with their weed management
systems achieve higher yields when they plant RR soybeans, the majority of
soybean growers in the U.S. aggressively and successfully manage weeds. On
average across all soybean producers and in the aggregate, the RR soybean
yield drag depresses yields far more than yields are increased on the farms
that benefiting from higher yields. The major advantage to most farmers
adopting the technology is increased flexibility and simplicity in weed
management -- clearly, these are major advantages for those growers that
are not interested in adopting Integrated Weed Management systems. One
wonders why Monsanto feels it has to go beyond these proven advantages in
its public statements.
The 20 percent reduction in costs claim is even more ludicrous relative to
the thousands of farmers saving their own soybean seed and using
sustainable agricultural systems. On these farms, growers consistently
harvest comparable or higher yields at costs equal to or lower than
conventional growers. Indeed, skilled growers using sustainable
agricultural methods often produce soybeans at costs per bushel well below
They are able to do so because there are a wide range of proven,
effective non-chemical or reduced-chemical weed management systems. Most
entail two to three passes with a rotary hoe and cultivator, at a cost of
$12.00 to $18.00 per acre -- less than many other farmers spend on herbicides.
Biotech promoters wonder why people are slow to believe in the health,
environmental risk, grower benefits and "feed the world" claims made by Dr.
Frawley, Monsanto, and others in the biotech industry. One reason is the
gap between facts and claims such as RR soybeans reduce production costs 20
For more details, see Ag BioTech InfoNet, <http://www.biotech-info.net>
Charles Benbrook 208-263-5236 (voice)
Benbrook Consulting Services 208-263-7342 (fax)
5085 Upper Pack River Road firstname.lastname@example.org [e-mail]
Sandpoint, Idaho 83864 http://www.pmac.net
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