Melvin Brees
Farm Management Specialist
University of Missouri Extension




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October 15, 1999

You’ve Separated Non-GMO—What’s Next?

Few elevators have separated GMO (genetically modified organism) grains from non-GMO grain. However, many of the elevators and grain processors have encouraged farmers to segregate non-GMO grain. This suggests that non-GMO grain needed to go into on-farm bins to capture any premiums that might be offered. If you had the bins to do this and have separated your non-GMO grain, what do you do next?

A lot has been said about consumers wanting non-GMO products, with very little indication of what they are willing to pay to get them. According to market theory, consumer desires are communicated to producers through market demand expressed by price. Some consumers have cited safety concerns about GMO products and the desire for non-GMO products. But, with no known GMO safety hazards, how strong is the demand for non-GMO products—especially if they cost more? This may limit premiums.

In addition to demand, price premiums will depend on the supply of non-GMO grain. It has been estimated that 35% of the 1999 corn crop and 55% of the soybean crop was planted with GMO seed. Additionally, cross-pollination and mixing of GMO and non-GMO has occurred. While it might appear that plenty of non-GMO grain is available, the supply really depends upon how many have kept it separate.

Price premiums should cover the cost of keeping the grain separate. If you’ve stored non-GMO separately, you should expect something for your effort. There will be additional costs to keep it separate until it reaches the consumer.

Since few elevators have segregated grain, in order for you to market it, they will have to "gear up" to segregate non-GMO or you will have to truck it (likely by semi) to someone who can. The grain will have to be kept separate in trucks, trains and barges. Exported grain will also have to be shipped separately. This all costs extra and there are always risks of contamination at some point in the process. Ultimately, the premiums will have to cover these additional costs and risks.

The question of risk is another factor that you need to be aware of if you’ve segregated non-GMO grain. Standards are essentially non-existent and testing will be limited, so processors and handlers will rely heavily on certification. Be careful about what you certify, the documents you sign or any oral commitments that you make. Other liabilities exist in the form of implied warranties. Implied warranties state that goods sold are fit for the use the buyer intends and this might apply to farmers as sellers.

You’ve separated and stored non-GMO grain, but you aren’t finished yet. You still have to market it! Non-GMO grain marketing and handling is similar to any other specialty or identity preserved product. Premiums are uncertain and likely to be variable and spotty unless you have a specific contract. You may have to move quickly to capture any premium. You also need to be aware of your liability as to whether you can actually certify and deliver what is expected.

-- Melvin

University of Missouri ExtensionDecisive Marketing - October 15, 1999 -- Revised: April 20, 2004