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Price drop likely if biotech wheat succeeds
A new report says US wheat prices could drop 40 percent or more if biotech wheat efforts succeed. The Western Organization of Resource Councils says opposition to modified wheat in European and Asian countries indicates buyers in those countries would not buy GM wheat that’s commercialized in the U.S and would turn to GM-free wheat from other countries.
Former research economist Neal Blue with Ohio State University authored the report and calls GM wheat in the U.S. a risky proposition.
U.S. Wheat Associates spokesman Steve Mercer tells www.farmfutures.com that he’s not seen the report, that the industry is working to improve the world’s acceptance of biotech wheat before it’s commercially available and that the market would have to sort it out. Mercer says the market is working hard to meet the demand of what wheat customers want.
If biotech wheats increase production, wheat prices (and total revenue per acre) will drop even without an EU boycott, simply because farm commodities are very “inelastic” in their demand curves, meaning that small increases in supplies translate into large drops in prices. It is about time somebody warned wheat producers about taking th biotech genie out of the bottle.