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Why Syngenta marketed Agrisure RW corn

Ethanol is the belle of the corn demand ball that's significantly spiked corn prices since last fall. However, this spring's flap over Syngenta's Agrisure RW trait shows exports are still a key corn demand player.

Agrisure RW is a new corn trait Syngenta introduced this year to control corn rootworm. Syngenta is offering it through its NK, Golden Harvest and Garst brands. Curry Seed Company, Elk Point, South Dakota, is also offering Agrisure RW through an agreement with Syngenta. Syngenta's offering joins two already on the market, Monsanto's YieldGard Rootworm and Herculex RW, marketed by Pioneer Hi-Bred International and Dow AgroSciences.

Final U.S. approval to the Agrisure RW trait and stacks occurred in March 2007. However, this trait has not received approval for import into other countries.

It's the lack of approval by Japan -- the largest U.S. foreign corn customer -- that particularly concerns farmers, commodity groups, grain exporters and grain shippers. They fear Agrisure RW corn could slip out of domestic marketing channels and end up in approved corn exported to Japan.

If this happens, some fear this could jeopardize export markets, particularly those going to Japan. In the 2005/2006 marketing year, 636 million bushels out of total U.S. corn exports of 2.147 billion bushels went to Japan, according to USDA.

The National Grain and Feed Association and the North American Export Grain Association had asked Syngenta not to market the trait this year for fear of commingling with corn export channels. In March, the National Corn Growers Association (NCGA) requested Syngenta withhold Agrisure RW hybrids from the market this planting season, citing lack of Japanese approval. The NCGA recommends growers who intend to market this grain off-farm to contact their delivery point to ensure it will still accept this corn if Japanese approvals are not granted.

On May 1, the BNSF railroad stated it would not accept for transportation any carloads of corn or corn products containing Agrisure RW (MIR 604). POET, a major dry-mill ethanol producer based in Sioux Falls, South Dakota, is also not accepting corn containing Agrisure RW at any of its ethanol production facilities or tributary handling facilities.

"You get only one crack at it," when it comes to export markets, says Mark Lambert, Illinois Corn Growers Association (ICGA) communications director. He notes segregation of such hybrids from approved ones is possible.

"We've gotten better at it, but it only takes one slip-up and then they can slam the door," says Lambert. "These are good products, products that farmers want," adds Lambert. It's important foreign customers also want them, too, he adds.

"They're right, whether they are or not," says Lambert.

The Japanese government's approval for Agrisure RW has taken longer than expected, says Chuck Lee, head of corn products for Syngenta.

"In the past, they (Japan) were a lot like the U.S., when approval of a product also coincided closely with approval of the product in a stack," he says. "Now, Japan requires a stack to go through the same process as an individual trait. That has stretched out the backlog of products awaiting approval considerably."

In the meantime, Syngenta sold what it terms introductory amounts of Agrisure RW individually and in stacks to U.S. farmers this year. The yield edge such traits can give was one reason Syngenta cites. This coincides with the need to meet booming ethanol demand that's coupled with feed and food demand. "We need yield-enhancing traits to fuel those industries," says Lee.

Independent tests show it's becoming more common for rootworm resistant hybrids to yield 50 to 60 bushels per acre more than conventional hybrids treated with soil-applied insecticides where rootworm is a problem.

"We made the decision to sell Agrisure RW because yield-enhancing traits like rootworm corn can increase yields, and that's what pays the bills on the farm," says Lee. "If fully approved in the U.S., growers should have the right to plant them on their farm."

At the same time, Syngenta officials say they are cognizant of the need to maintain the trust of U.S. export customers.

"Be it this technology or the whole plethora of the new technology that's coming down the pike, we need to find ways not to delay technologies to the market and still be able to ensure that export markets get the grain with the specifications they want," says Jack Bernens, business unit head of Syngenta's Agrisure traits. "In this introductory year, we've tried to take extra measures to make sure this grain is directed toward domestic uses. We are providing tools to the value chain that they can use so that nothing inadvertently enters a shipment going for export. We can absolutely minimize the risk that there's going to be any issue with that, and at the same time not delay technology in the marketplace for the U.S."

In the meantime, Lee says the Japanese approval process for Agrisure RW continues to move forward. "We can't predict when it will have approval, but we have made it through several layers of the approval process," he says. "Our hope is it will come before harvest this fall."

More on the Agrisure RW situation:

Ethanol is the belle of the corn demand ball that's significantly spiked corn prices since last fall. However, this spring's flap over Syngenta's Agrisure RW trait shows exports are still a key corn demand player.

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