Not a 'sexy' investment
Its almost-exclusive role as food for humans makes it a less attractive investment.
"Wheat isn't sexy," said Mike Miller, a Washington state wheat farmer and commissioner for the Washington Grain Commission. "Corn is sexy because it has many more values," like feedstock and biofuels.
For decades, wheat was regarded as a weed among the blossoming priorities of private agribusiness, compared to moneymakers like corn and soybeans. About 78 percent of wheat varieties were developed by universities through public grants, said Jorge Dubcovsky, an agronomist at the University of California, Davis. It was simply not lucrative enough for the private sector.
Seed companies make the most money off hybrid varieties, a sort of mule of the plant world. Like the mule, a hardworking donkey-horse combination, a hybrid seed displays the best combination of its parents' genetic qualities. Its drawback is that it is sterile and cannot reproduce.
Unlike corn and soybeans, most wheat varieties are not hybrids. This means that farmers don't need to buy new seed every year, a lost market for seed companies. The drive for wheat research was motivated by food security efforts, said Dubcovsky, not necessarily by higher profit margins.
Last year, the U.S. Department of Agriculture allotted about $60 million to wheat research. "[It] might sound large, but it pales in comparison to what the private industry is putting into corn and soybeans, almost on a daily basis," said Jane DeMarchi, director of government affairs for research and technology at the National Association of Wheat Growers.
The relative lack of interest from private companies left wheat farmers wanting attention. Two and a half years ago, the wheat industry mobilized and began approaching technology providers. "In 2008, growers were very active in soliciting investment from private companies," said DeMarchi. "The dynamics of investment are changing."
Monsanto, the world's biggest seed company, flirted with wheat genetics in the late 1990s, looking to add to its line of Roundup Ready crops. The company abandoned its efforts in 2004, due to a dismal outlook for profits.
A few years later, a turnaround occurred. Wheat markets were on the upswing, and growers began pushing heavily for more private investment in research. In 2009, Monsanto bought WestBred, a small grain biotechnology research firm out of Bozeman, Mont. With the merger, Monsanto acquired WestBred's germplasm -- a collection of genetic resources -- and gave itself five to seven years to develop new varieties of drought-tolerant and high-yielding wheat.
More public-private partnerships
Recently, private companies have carved out a role in the campaign for global sustainability. At the most recent World Economic Forum in Davos, Switzerland, a public-private strategy headed by 17 major corporations was launched to boost crop yields, reduce greenhouse gas emissions and cut poverty by 20 percent each in the next decade (Climatewire, Jan. 31).
Last year saw a growth of partnerships between private companies, federal agencies, land-grant universities and organizations. Swiss agribusiness company Syngenta formed a partnership with wheat research institution CIMMYT, seeking to develop both cutting-edge technology and traditional methods accessible to poor farmers in developing countries.
Monsanto announced plans to collaborate with Kansas State University and Virginia Polytechnic Institute and State University on wheat research. NAWG adopted an official policy to prioritize collaboration between organizations, universities and private companies.
"There's no question that the private sector has an increasingly important role in investing in agriculture, simply because governments and other public institutions can no longer afford to," said Brian Halweil, a senior fellow at the Worldwatch Institute, an organization promoting sustainability in international agriculture. "The big question is whether private entities will have the public interest as part of its mission."
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26 Comments
Add CommentI find it interesting that this has partly been explained as wheat farmers seeking out private money! That sounds like an after-the-fact explanation for what actually occurred in 2008: Goldman Sachs Commodity Index and an end to position limits on commodities speculation for 16 special corporations -- limits in place precisely because commodities are necessary to human survival. 100 million people were forced into hunger by speculator-fueled price increases in 2008. The political turmoil we're seeing now is a direct result.
Reply | Report Abuse | Link to thisThis year may have had droughts and disasters, but 2008 did not. Supply and demand had nothing to do with those price increases.
The regulatory climate as well as the planetary one will be a food disaster -- there is simply no way to hold these companies accountable to any kind of public interest. Monsanto's involvement means the end of saving wheat to plant as seed, as it did for corn, soy, etc. The result will not be an enhancement of wheat genetics but precisely the opposite.
It does seem that focusing on higher yield varieties, to maximize short term profits, is more likely to produce strains that are less productive in conditions of drought.
Reply | Report Abuse | Link to thisOver-reliance on non-replenished fossil-water irrigation for maximum production and petroleum based fertilization are hardly sustainable methods of optimizing long-term production.
Perhaps some humane method of reducing the burgeoning human population must be found before we annihilate ourselves?
The global population has quadrupled since 1900 and will soon have tripled since 1950. Managing Earth's resources to sustain a human population anywhere near this large has never before been attempted. Best wishes for all...
It is interesting how much time we spend modifying other species to continually serve our needs without the slightest consideration that maybe we are the problem. We work to cure hunger and mortality without addressing natality. This system is born to fail, pun intended.
Reply | Report Abuse | Link to thisPerhaps we should consider the social influences creating these out-of-control populations. For example, religious leaders who refuse to encourage the spread of birth control, the lack of education for populations with dangerous sexual practices, the lack of restraint on the number of children produced per family. People want to respect everyone's personal choices and beliefs, but perhaps we're getting to a point that their freedoms will be impacting the entire species. When and where do we draw the line, before or after world disaster?
Do away with useless subsidies to corn growers for the biofuels industry and level the playing field. Without subsidies, many marginal corn farmers will change to crops which will grow best on their individual farms and bring the best and most stable prices on the commodities markets. Government interference with private industry is what gets us into these fixes in the first place and doing away with that interference is the only permanent way to fix it.
Reply | Report Abuse | Link to thisEasy solution. Trade wheat for oil. When an amount of oil and an amount of wheat that one person uses per day have the same value, the problem is solved. Bread is one of the few staples that I purchase at the supermarket. Most of my other food is either grown or raised. Why is it so moral to bomb someone but so immoral to starve them? As Jtdwyer says above, the huge cities of the world are the problem. The residents don't contribute to the actual sustainment of the population, but they consume mass quantities(SNL pun intended). Rural areas can make it on their own. Cities like Las Vegas shouldn't even exist because there is no water and no food produced. The unlimited growth model for economies and populations can't continue. Blame it on greed.
Reply | Report Abuse | Link to thisYou miss the subtle difference between eliminating people and reducing the number of people yet to be born.
Reply | Report Abuse | Link to thisIn the 16 minutes of relentless sarcasm you spent submitting comments, you failed to make any good points toward a solution. How do you suggest we be able to continually produce enough food for 9 billion people. In a hundred years, what will the food solution be for 12 or 13 billion people? Clearly you are a thinking individual, and I would really like to hear your ideas.
Excellent points.
Reply | Report Abuse | Link to thisFull disclosure, I am the communications director with U.S. Wheat Associates (www.uswheat.org). We respectfully disagree with your point: "This year may have had droughts and disasters, but 2008 did not. Supply and demand had nothing to do with those price increases." In fact, U.S. wheat stocks for 2008 in the U.S. were relatively low because of two dry seasons in a row, and Australia had a major drought that cut its production to less than half its average. More over, the world had produced less wheat than it had consumed for 7 of the 10 years prior to 2008! Supply (especially) and demand had, in fact, almost everything to do with the situation in 2008. Three years of record world production followed, which rebuilt world stocks and pushed down wheat futures prices to pre-2008 levels (and even lower at the farm gate). But the Russian drought and its government's decision to ban wheat exports last August was the market factor that left Egyptian supplies vulnerable (it had been buying wheat mainly from Russia and other Black Sea countries), set off supply fears and attracted increased speculative buying...all of which rapidly pushed world wheat prices higher. Futures speculation is an essential part of helping wheat farmers and buyers manage their price risk. Yes, long positions are unusually influential right now, but if those speculators did not see a long-term supply problem, they would likely not be in the market at the same position or volume. U.S. Wheat Associates updates a world wheat supply and demand report every month using new USDA data (Reports/Supply and Demand).
Reply | Report Abuse | Link to thisThank you. Nobody has ever said that to me before!:)
Reply | Report Abuse | Link to thisPlease see my comments in "Dressing up the meat for Tomorrow" in the blogs.
Cheers.
Unfortunately unless you have a socialist solution to offer on this forum you will be ridiculed by the majority. Facts carry little weight.
Reply | Report Abuse | Link to thisI agree with some of what Postman has to say. It doesn't make much sense to provide subsidies for biofuels when there are people out there who can barely afford to buy enough food for their families.
Reply | Report Abuse | Link to thisUnfortunately you cannot use facts to refute the majority on these blogs who see all corporations and individuals who may profit as evil and as the source of all problems. The do not believe in the power of markets and price signals to bring supply and demand into balance. Shortage and resulting high prices are blamed on speculators, even when things like weather and government intrusion on the market are to blame.
Reply | Report Abuse | Link to thisI should modify that - global warming is another source of blame for just about any problem. Even though cold, heat, droughts and floods have caused food shortages for thousands of years, somehow our current weather issues are all related to global warming.
Reply | Report Abuse | Link to thisWhen the food supply increased and predators were absent, in his Guppie experiments Dr John Endler found they became bigger, matured later, produced less young, less frequently and the offspring were larger. They knew how to control their population.
Reply | Report Abuse | Link to thisThe Homo sapien fills the Petri dish to overflowing, still will not stop. Sadly he destroys the biosphere in the process.
Let us hope the biosphere restores itself and lifeforms that replace the mega species lost to the sixth extinction will be more advanced than we can possibly be.
The lesson the Homo sapien did not learn was: When you develop using science you got to modify your ethics to suite your improved outcomes. The Europeans and a few others did that. You cannot provide the benefits of development to those who want to cling to past lifestyles and ethics. All the charity work - save the babies - cheap medicines for the poor - medicine sans frontiers - and the rest; jointly worked to destroy the biosphere for all.
The reports of our demise are greatly exaggerated. Yet, you sound as if you are writing our obituary. Honestly, it sounds from here as if you might want to talk to your doctor about your feelings. Just a suggestion.
Reply | Report Abuse | Link to thisWe're going to be dealing with serious drought conditions again in the future which means food prices will continue to rise dramatically unless some action is taken. Because so much of the world's population spends a significant portion of the family budget on food, large price rises will result in even more political unrest. In order to prevent more instability in the developing world, we need to come up with a way to increase food production. Either we come up with a dramatic increase in crop yields, or we reduce acreage for biofuels and use the land for food crops.
Reply | Report Abuse | Link to thisrecrem56,
Reply | Report Abuse | Link to thisClever, your last name backwards plus your birth year. How do you like VA? Better than KS, MN, or IL?
Thanks for your full disclosure. For my full disclosure, I have over a decade of experience in trading energy derivatives and market risk management. All of this has been in New York and London employed by the largest banks in the world.
First, Steve, why bother to even comment? The USW attempting to defend the price of wheat is like BP trying to defend the price that crude hit in 2008. Of course, you want the price to be high. Why kill the golden goose? Wall Street, that is.
Wall Street does not let any type of "crisis" go to waste. Yes, supply may have decreased in 2008, but not enough to more than double wheat prices. Droughts in 1996 did not produce such a spike. It was also worse than the spike in the early 1970s. Just like the CA electricity markets in 2001. No, that wasn't Enron (being sarcastic). Electricity demand was high and supply was low (being sarcastic).
What tells the story is the commodity price collapse in the fall of 2008. This was liquidity driven. If more of the market was hedge related, the price would not have collapsed. Wall Street needed capital for funding during the financial crisis. Period. The mini bubble mostly created by Goldman would have been much greater if Wall St was not in trouble in 2008.
You haven't seen nothing yet. 2008 prices will soon seem like a joke compared to what is coming. I've been on Wall St for all of it. First, the dot-com bubble, then the housing bubble, next the commodity bubble. The commodity bubble will make the housing bubble look like a pimple (comparing its devastation on the world).
And just think, you part of what is enabling that to happen. Just turn your head the other way. Nothing to see here, folks. As millions die around the globe.
scientific earthling said, "The Europeans and a few others did that. You cannot provide the benefits of development to those who want to cling to past lifestyles and ethics. All the charity work..."
Reply | Report Abuse | Link to this??? The Europeans have adapted??? Then you go on to blame the destruction of the biosphere on welfare??? First, Europeans do not have welfare??? I guess your talking about overpopulation and not use of limited resources. Evidence shows that the poor have more children. So I guess in trying to eliminate poverty, you would rather kill the poor rather than help the poor???
Soccerdad--
Reply | Report Abuse | Link to thisYou say, "Unfortunately you cannot use facts to refute the majority on these blogs who see all corporations and individuals who may profit as evil and as the source of all problems."
All? So you overgeneralize and conflate corporations with self-interested individuals? Why? Adam Smith certainly did not.
I assume that you, like any erudite free marketeer, have a well-annotated copy of his _Wealth of Nations_ at hand. Reread Adam Smith's view of Joint Stock Companies, what we now call corporations, as stated in Book V, Chapter 1, Part 3. It's on page 800 of my Modern Library edition.
Smith makes it quite clear that corporations lead to management looking out for management and perhaps the stockholder, but certainly not the customer. He noted that corporations are a danger to free trade, not a hallmark of it.
According to Smith and others, there's quite a difference between a free market that allows a fair profit and what's going on in American business today, isn't there? For example, have you read John Bogle's _The Battle for the Soul of Capitalism_? Bogle, a self-described life long Republican, quotes Smith's warnings about corporations in detailing the derailing of America by greed and financial shenanigans.
Oh, yes. Your comment that "somehow our current weather issues are all related to global warming" shows that you know as much about basic science as you do the fundamentals of a free market. Weather and climate are different concepts, one short term the other long term.
So, Soccerdad, since these responses are supposedly about wheat, not capitalism or climate change, what's your take on UG99? Should we worry?
Houyhnhnm
My doctor is only a medical technician. I do find some medical practices wanting - its all to do with the way they are taught. Our bodies are complex chemical factories to understand them you need a sound knowledge of chemistry, they don't think so. Most doctors don't understand glucose metabolism.
Reply | Report Abuse | Link to thisIf you are as old as I am, and have spent your whole life doing chemistry, eventually you get to a point where you try to understand how the biosystem works, you realise one thing: We need the biosphere to survive, not just bees, flies, trees, grasses and worms but every living organism, the sum total of their interactions balance and keeps our biosphere stable.
We have over the past few hundred years invaded ever nook and cranny of this planet and dislodged all other species from these areas. Further we developed science & technology, but you don't have to understand it to use it. The biosphere tried hard to cope, but the last 50 years have brought it to its knees. The sixth extinction began in earnest when we achieved this. I hope you accept that the current rate of loss of species does justify labeling the post Holocene era as an extinction event. If you don't well I am wasting my time.
One further point: Extinction events effect the mega species a lot more than the micro species. If this had not been the case we would not be a round today. It is based on this, that I conclude that our species will be extinct soon.
Cramer: The Europeans have adapted better than anyone else. The Industrial revolution put them through a lot, most importantly they discarded religion and developed a new morality, where sex was a biological necessity not a reproductive dictate. The rest of the world needs to follow.
Reply | Report Abuse | Link to thisOur biosphere is being destroyed by an excess of Homo sapiens on this planet. Rising atmospheric carbon dioxide is a result of our numbers and the destruction they have wrought on ocean and plant life that convert carbon dioxide back to sugars. This is not the whole problem either.
Welfare is not the cause of the problem either, most welfare states have stable populations. I am aware recent migrations have increased birth rates and tend to dislodge the existing ethics in favour of traditional religion.
Charity is a big problem and also a money making racket. If you live in a fist world nation you can not escape the ads with black African kids looking sadly at you, demanding help - meaning your money! No you can not bring a few over and educate and feed them and expose them to your culture - Heaven Forbid! Remember a lot of people loose a lot of money if there are no starving, bubble bellied, runny nose, sad eyed African kids. We got to keep them in production.
I have read Malthus and I know he is right in his analysis of population, yes there are some mistakes, but it was in 1798 his essay was published. Every human is flawed, me included. Gandhi wanted the Jews to hand themselves over to Hitler as a peaceful protest. He also believed he had to control his sexual body functions - why? We can have sex but that does not mean we have to procreate and whats wrong with sex? When the seminal vesicles are full they must be emptied, similarly when a female feels a hunger for sex whats wrong in satisfying it?
In a world where infant mortality rate has been drastically reduced, the birth rate must drop. If this is unacceptable, then the scientific benefits must be withheld for these people. If you want to live by gods law, you don't get the benefits of science. After all gods law sets the infant mortality rate, does it not?
Just for fun, check this out:
http://www.lyricsdepot.com/monty-python/all-things-dull-and-ugly.html
scientific earthling's,
Reply | Report Abuse | Link to thisAlthough I agree that the world population should stabilize, I believe some of your solutions are the exact opposite of what has been determined effective.
For example, low infant mortality rates do not increase productivity. It is actually the opposite. Women (families) in areas with high infant mortality rates usually want to have more children because that reduces the risk of not maintaining a certain number of children. Women in Uganda say this. There are many reasons for this. And the reasons have to do with actually wanting to have a lot of children.
Most significant factors related to high infant mortality rate:
* high infant mortality areas also have high children mortality rates.
* agrarian economy (put the children to work)
* uncertainty about future wealth
* lack of social security for elderly
* lack of healthcare for poor
Predictors for unwanted pregnancy (and children):
* poverty
* lack of education
* lack of access to contraception/family planning
* lack of health facilities/abortion facilities
Religion really isn't that significant of a factor in a lot of poor countries like Uganda. It probably is in the US.
"Withholding scientific benefits" will also increase productivity rates. I understand your logic with regard to CO2, because wealthier societies use more energy per capita. But wealthier societies also have lower birth rates (typically dropping below the replacement rate). Scientific benefits include contraception, healthcare, etc.
Another interesting thing is adapting to population stabilization. Most of our GDP growth has to do with population growth. By definition, GDP = productivity * Population, where productivity = per capita GDP. You can also include the labor force participation rate if you use labor force productivity.
And if the global population drops, global gdp will most likely drop. Even for the poor, they still need food. And that food is being produced. Obviously, if productivity growth rate can make up for a falling population, GDP can still grow.
Why do you bring economics into a science issue? Economics is not science. Economics claims to be a science, but does not accept its basic principle - skepticism. Science should predict future outcomes, economics tries and usually fails. The basic principles of economics are based on infinite markets, infinite resources, all these infinities, we throw out a lot of scientific work (think string theory or should that be hypothesis) because of irrational infinities. The world has to learn to live with zero growth. Its either that of extinction.
Reply | Report Abuse | Link to thisLow infant mortality rates may reduce productivity (depending on what you mean by this vague term) by keeping mothers occupied managing and feeding large broods of children, an unproductive task. Wanting to have a lot of children is a biological drive that needs to be controlled by education, especially when infant and child mortality rates are have been lowered by science. Talking of Uganda, 1969 population 9.5M today: 34.6M in spite of loosing almost half a million as refugees.
Religion is a driving force in democracies with Muslim refugee intakes, they are attempting to take over their host nations by out-populating the locals. Lebanon is an example of a christian state now overwhelmingly Muslim. Another is Indonesia, the extermination of the Papuans leaves the Pol-pot regime looking like saints.
By withholding scientific benefits from societies that do not adjust, I mean all technology including medicine, fertilisers, food, motor vehicles, chemicals everything they can not make themselves, and above all else Charity dollars. Isolate them like the Galapagos species. You cant have your cake and eat it too!
I understand why big business wants population growth, but that does not make them right. Big business also benefits by creating illness, suffering, shortages, and global financial crises. But remember big business is not about its shareholders, its about its mafia like board plundering the wealth of the company for personal gain. I don't care about GDP. If productivity is lower you have more jobs and you value what you have, since it costs more. You destroy less of your environment.
scientific earthling,
Reply | Report Abuse | Link to thisI think a meant to say low infant mortality rates do not increase reproductive rates (not productivity).
Are you sure you are not a scientific martian, because I don't know what planet you are from? I would guess you to be a ninety year old man with alzheimers that goes off on all sorts of nutty tangents.
Good luck with promoting some of your ideas:
1) withhold all technology from people (or nations) with high birth rates and isolate them,
2) lower economic productivity (per capita GDP) so there will be more jobs,
Even if those were good ideas, how would you implement those ideas? Would you use the US military? Internment camps? How would you lower productivity? By confiscating computers and other automation equipment from private corporations? By mandating that people work slower?
Pure genius! And it understandable where your amazing idea come from. You have vast knowledge.
And your knowledge of economics is amazing. You believe, "basic principles of economics are based on infinite markets, infinite resources, all these infinities." Actually, economics is based on limited resources.
Also, Lebanon still is at least 40% Christian and Indonesia was never a Christian state.
Cramer: I can accept mistakes you make, I do too, sometimes what you write turns out to be exactly the opposite of what you intended, usually the result of editing.
Reply | Report Abuse | Link to thisLow infant mortality rates should reduce reproductive rates, this is a result of biological factors an important one is lactation, it prevents pregnancy. I understand that I learned it at uni decades ago.
Your second para needs no response, its essentially low level abuse. As part of my voluntary work I attend to the needs of some people with Alzheimer's disease.
Thanks for your good wishes. No I don't need to do anything to lower gdp, it will lower itself. As far as restricting technology from those unwilling to live a life based on the realities of the 21st century, I don't need to do anything either. The biosphere will take care of itself, its natural selection unaided by any sentient being. The extinction of our species takes care of it, sadly other mega species will go with us; but in nature nothing is sad or happy, good or bad, there are only events that lead to other events. Some events are, for a while, rhythmic.
Thanks but I don't see myself as a genius. To me geniuses are Malthus, Darwin, Einstein, Euler, etc. it does not matter if they got somethings wrong.
I had to study Economics as part of a MBA program, forced on me by my employer. I found it sometimes irrational. I could cope with the maths, but the infinities I talk about are in every economics text book. You find it in market demand analysis to the best of my memory. You always assume raw materials, labour etc are infinite. I don't claim any knowledge, except I find infinite quantities of anything nonsense. Infinity is a mathematical idea required for maths, and in this subject, some infinities are infinitely greater than others. Example real natural integers go on for infinity, but between each pair of neighboring integers we have fractions, there are in infinite number of fractions between any two neighboring integers; so there are infinitely more of them. Try to get your head around that. I know all resources are limited, and that is the problem with irrational breeding.
Lebanon read this: http://almashriq.hiof.no/lebanon/900/902/Kamal-Salibi/ you will know how it was created and why the the majority were christian.
Now read the mujaheddin explanation of why PNG became a Muslim nation: http://www.mujahideenryder.net/2008/11/17/islam-spreads-to-papua-new-guinea/
scientific earthling,
Reply | Report Abuse | Link to thisAlzheimer's: I also volunteer to socialize with people with dementia/Alzheimer's. And they say things similar to what you are saying. I love them dearly, but they are not qualified to provide any scientific insights.
Infinite resources: The only thing that is ever assumed infinite in supply and demand analysis is infinite buyers and sellers when competition is assumed to be perfect. And from some of the things you have said you seem to have a libertarian slant that necessitates the assumption of perfect competition. I do not believe in the assumption of perfect competition. And if you believe all of economics has to do with infinite resources, you are wrong. If we had access to infinite resources, there would be no need for the study of economics.
Extinction of our species takes care of it: This then makes your solution to our problems pointless. That is, there is no problem. Would extinction be the ultimate problem that humans face? And if you believe it is not pointless--because you are above being human--then the timeframe for your solution is unlikely to be in our or our grandchildren's lifetime.
Infinite number of fractions: Mathematically, that is rather a simple concept. Are you saying that you are having a hard time of "trying to get your head around that."
Papua New Guinea is not part of Indonesia. You said Indonesia. Also, PNG is 96% Christian. You can also say the Americans were not Christian until the Europeans arrived. The Christian faith has also promoted high reproductive rates. Please drop the subject of Muslims and Christians. I consider it a racist rant, especially in the context of discussing overpopulation.