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China spurns Agrisure corn trait

Jeff Caldwell 08/17/2011 @ 3:38pm Multimedia Editor for Agriculture.com and Successful Farming magazine.

If you're raising corn with the Syngenta Agrisure Viptera trait in it, make sure you know where it's going to end up before you start into the field this fall.

This week, grain processors and farmers were alerted to the fact that China, a growing importer of U.S. corn, does not accept corn with the Agrisure Viptera MIR162 trait. According to a report from the National Grain & Feed Association (NGFA), the Agrisure Viptera trait from Syngenta has yet to receive regulatory approval from China. The trait has netted "all key export approvals" from the Biotechnology Industry Organization (BIO) and National Corn Growers Association (NCGA), but these approvals came before China began buying U.S. corn, thereby having a say in the trait's approval. NGFA officials say they expect China to OK they Viptera trait by the end of the first quarter of next year.

"While the Agrisure Viptera trait is in compliance with the NCGA and Biotechnology Industry Organization (BIO) guidelines, Bunge and Consolidated Grain & Barge (CGB) have indicated they will not accept grain containing the Agrisure Viptera trait," according to a report from Syngenta. "We are disappointed with their decision; however, other major grain companies have told Syngenta that they are accepting grain containing the Agrisure Viptera trait."

The reason for China's lack of approval of the trait: Officials there, like those in the European Union, are wary of the trait's protein that they allege becomes concentrated when the corn is refined for ethanol. The resulting distiller's grains (DDGs) consequently contain excessive levels of the protein. Distiller's grains are growing in volume as a U.S. export abroad, including China.

"Basically, it is just a situation where Syngenta came out with the new trait that was going through the regulatory process. To the best of my knowledge, it basically got approval pretty much everywhere in the world but China -- Brazil, Japan, other export areas," says Brad Buchanan, founder & owner of Crop-Tech Services, Inc., of Cedar Rapids, Iowa.

"China is the only one that has not given approval of this new trait technology. Because now, in the ethanol industry, there's a tremendous amount of DDGs shipepd overseas, and in essence, China says until they get approval, they don't want anything to do with this grain."

Buchanan says there is a test that is available to test each load of corn that will go across the scales this fall, and he advises farmers to make sure they don't commingle the unapproved grain from other corn they intend to enter the ethanol and DDG export supply chain.

"The Bunges and CGBs (Consolidated Grain & Barge Company) of the world are concerned about getting it in barges. They don't want it showing up in bargeloads going to China," adds Brian Spore, VP of Commodities for Grain Processing Corporation's (GPC) Muscatine, Iowa, location, who sent word to area grain merchandisers and brokers earlier this week to ensure their customers weren't adding the unapproved grain to shipments to grain users who might face rejection from a customer overseas. China and the European Union have yet to approve this specific Agrisure Viptera trait, while other nations including Japan, Brazil and Argentina all have approved it.

Down the supply chain, brokers and grain buyers have simple advice for farmers who planted the Viptera gene: Make sure you know when and where you're hauling it. If it's destined for a terminal where the grain will eventually be used for ethanol and later, have the DDGs exported, keep it separate, says Katy Greiner of Kat's Grain, Inc., in Washington, Iowa. Fortunately, right now demand is high enough that this shouldn't cause too much of a roadblock to moving grain where it needs to be.

"We put a text message out to our farmers and people who sell us grain and said if you have this, let us know. We are not taking this to any processors because we have feeders," Greiner says. "They're going to start testing for it. In our area, where we're sitting at, we've got plenty of hogs to feed. I'm passing info to my producers to make sure."

Adds Spore: "There's plenty of feed demand -- it's just a matter of keeping it separate. Tell the farmer that there's a possibility of being rejected if they're tryng to ship it to a wet miller."

With the demand that exists both at home and abroad, there should be no problem making necessary adjustments to your marketing plan if you're unable to haul grain to your normal location, Buchanan says.

"If you've sold grain to them already, you're going to have to find grain to replace it. It's probably more of a fly in the ointment,"  he says. "Those bushels will find a home domestically just because grain supplies are that tight."

How serious of an issue is this from a marketing standpoint? China has loomed fairly large as a fundamental factor in the grain market lately, and that looks to continue to be the case for some time, especially with corn and soybean purchases from the U.S. on the rise. But, this isn't the first case of a regulatory issue forking the flow of grain overseas, and add to that China's sometimes erratic behavior on issues of international trade, and it's likely not something that will cause too large a stir in the grain markets, says Cargill senior grain merchandiser in Eddyville, Iowa, Ray Jenkins.

"It's probably a pretty typical ploy by the Chinese to talk the market down. I certainly think it's in the realm of possibility that they're playing the market," Jenkins says. "Just like on soybeans: When they used to say they didn't need U.S. soybeans, usually within 2 to 6 weeks, they'd be back in the market pretty hard. They're the biggest X-factor in these markets on the export side."

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08/18/2011 @ 1:33pm I doubt China will have the luxury of being pickey here pretty soon if corn ends up as bad as some say. Its just another stunt.

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08/18/2011 @ 1:32pm I doubt China will have the luxury of being pickey here pretty soon if corn ends up as bad as some say. Its just another stunt.

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