Sunday, November 5, 2017

CRISPR: Who’s pulling the wool over who’s eyes?

From: Amid GMO Strife Food Industry Vies for Public Trust in CRISPR (via NPR

(link)

http://n.pr/2yXk13G

"if this is genetic engineering, then call it that," says Perls. She says these producers are just trying to pull the wool over consumers' eyes with a strong public relations push."

Question: What do you call zapping a plant with radiation or dousing with chemical mutagens to create *random* gene edits vs. *targeted* ones? Well you can call it USDA Certified Organic, or slap a 'natural' label on it or have the butterfly logo assure you it's non-gmo. Who's really pulling the wool over who's eyes here?

Thursday, October 12, 2017

Food with Integrity is Catching On

There is a quote often attributed to Abraham Lincoln:

"You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time."

Recently Mann Packing has taken that lesson to heart and received good publicity in relation to its decision to not label some of its products as GMO free:

"The company is removing the non-GMO verified check from its single-cut lettuce products in its next print run, which could take place next month, said Gina Nucci, Mann’s director of corporate marketing. Mann did an about face after presenting its product packaging in Canada, where the Non-GMO Project Verified label is only allowed on products that have a GMO alternative."
"There is no GMO lettuce," said Nucci. "It made us go: Why are we doing this? We are perpetuating a fear that something is wrong with GMOs. We didn’t feel right doing that, so we chose to take that label off."


This is impressive transparency in an age of free-from labeling. 

Contrast this with companies like Chipotle taking the exact opposite stance engaging in nuanced and deceptive marketing practices to sell their products.  Lately trying to play to both sides of the GMO debate, they have been engaged in a lawsuit (against them) in relation to some of its free-from GMO advertising because the supply chain for softdrinks and animal feed contain GMOs. 

So they are agitating both the informed consumers that understand biotechnology is actually a good thing, as well as some of their customer base that is at least informed enough to understand the supply chain and ingredients.  To Chipotle's detriment. (even though they may have won this one in court). Hopefully with groups like Peel Back the Label we will see more consumers becoming more informed as they catch on to what food with integrity really means.

Maybe we will even see lawsuits against companies using the kinds of misleading 'free-from' labels (like with lettuce) that Mann Packing abandoned on grounds of misleading advertising! 

Tuesday, October 3, 2017

Gluten Free Bread via CRISPR

CRISPR technology might make gluten free wheat a reality:  

https://www.newscientist.com/article/2148596-genetically-modified-wheat-used-to-make-coeliac-friendly-bread/ 


For people with Coeliac or severe gluten intolerance this could be very exciting. However, there are a number of people choosing a gluten free diet for sociopolitical reasons that probably will continue to look for the 'gluten free' label bundled with non-GMO certification (which would most likely rule out CRISPR based advances like this). We have seen food companies abandon promising technologies (i.e. rBST in milk, finely textured beef) because of issues related to consumer acceptance/perceptions. Will they be willing to invest in commercialization of CRISPR based gluten free food given this history and the trend toward 'free-from' labeling?  Will there be enough demand from current gluten free consumers that are otherwise agnostic to these fads and trends? Can we learn anything from other new consumer enhanced products like non-browing apples, the Simplot Innate potato or the Impossible Burger?

Sunday, September 24, 2017

2017 Hypothetical Revenue Projections for Corn

***This commentary is provided for descriptive and entertainment purposes only and is not intended to be used for specific trading strategies or interpreted to be investment advice. *****  

In my September market update, I discussed some modeled revenue projections based on the WASDE numbers and projected yield (169 bu/acre) as well as some analyst estimates (167) and what yield it would take (163.5) to get prices back to $4/bu.

To supplement that analysis I have put together a hypothetical budget for corn based on University of Missouri extension estimates.

Using this spreadsheet I could make revenue projections for the three different yield and national average price projections assuming on farm yields of 200 bu/acre for a 2,000 acre operation:


Projected National Yield: 169.9 167 163.5
Projected Stocks to Use: 16.40% 14.70% 12.65%
Projected Price: 3.36 3.62 4.04
Revenue-Returns to Labor: $44,000.00 $148,000.00 $316,000.00


Bear in mind this does not consider basis or specific marketing strategies and crop insurance tools that many producers may be using. However it gives an idea, based on the cost, yield, and price assumptions, the revenue implications that this can have for producers.

***This commentary is provided for descriptive and entertainment purposes only and is not intended to be used for specific trading strategies or interpreted to be investment advice. *****  

EU Court Rules in Favor of GMOs

EU Court Rules in Favor of GMOs

"From a scientific standpoint, today's ECJ ruling is a comforting one. The Court's decision reverses the 'precautionary principle,' which has been the EU's longstanding default argument that, in the absence of proof that a product is absolutely safe, unverified concerns about its safety are sufficient to ban either importation or cultivation," says Ron Moore, ASA president and farmer in Illinois. "Unfortunately for the last 20 years, this unscientific approach has given rise to an equally unscientific patchwork of restrictions or prohibitions on EU imports and cultivation of biotech crops by member states"


http://www.agweb.com/article/eu-court-rules-in-favor-of-gmos-NAA-sonja-begemann/

(Via AgWeb)

2016-17 Corn Marketing Scenario


***This commentary is provided for descriptive and entertainment purposes only and is not intended to be used for specific trading strategies or interpreted to be investment advice. *****  

Corn Production 2016-17 Marketing Plan September 23, 2017

A: 9/23/17 Harvested grain previously hedged with December futures at 3.99/bu. Bought back December futures at 3.53 and sold cash (-.25 basis) at 3.28 giving a net price of $3.74/bu

B: Sold December futures at 3.53/bu to hedge next 25% of crop to be repurchased and sold on cash in December.

C: Will store next 12.5% of crop unhedged and priced with a .33/bu cost of carry (to July) and sell on a rally.
this will leave at least a portion of the crop at risk but in a position to take advantage of a rally in the cash or futures market.

D: Will store last 12.5% of crop hedged with a 9/23/17 July futures hedge at 3.81/bu and .33 cost of carry.


Reasoning for Futures Hedges:

Fundamentals: WASDE yield estimates of 169/bu indicates a projected price bottom of 3.36/bu with some analyst projects of 167 bu/acre national average capping the projected price around 3.62. This price range does not indicate huge opportunities for big rallies and some potential risk for more loss of value. 


Technicals: Although there seems to be a slight uptrend toward the fundamental cap around 3.62 in the weekly chart, with ADX < 20, RSI 46 indicating neither overbought or oversold, volume and open interest plunging don't indicate additional momentum for moves higher. The MACD also has been trending bearish. In the monthly chart, for the last 2 years prices have been trading in a channel with support and resistance very close to the fundamental levels of 3.36 and 3.62. 

Given both technical and fundamental indicators aren't reassuring of higher prices + expected post harvest lows, sales and futures hedges + storage made the most sense.

***This commentary is provided for descriptive and entertainment purposes only and is not intended to be used for specific trading strategies or interpreted to be investment advice. *****  

Saturday, September 16, 2017

GMOs and Fractional Reserve Banking

I recall a few years back being part of a Facebook discussion group supposedly dedicated to 'food and farm freedom.' In general discussion was related to reducing taxes and government regulation in agricultural production. However, there was a lot of anti-tech anti-biotech anti-corporate sentiment. The idea was that big business (like biotech companies) were conspiring with big government to control the food supply. The solution was...wait for it...more government regulation. Never mind this was a libertarian focused group and never mind that existing biotech regulations make production and release of biotech varieties 20x costlier than conventional crops despite being substantially equivalent in terms of risk (of course in-plant pesticides might necessarily require additional testing from an environmental standpoint).  So here was a free market discussion group with discussants arguing against government regulation of raw milk but calling for more stringent regulations if not actually banning biotech crops and other modern technologies in the name of safety and food access.

Changing subjects, recently George Selgin wrote an interesting piece regarding fractional reserve banking. Anyone familiar with libertarian and especially some Austrian leaning thinkers might have an idea of how much some abhor fractional reserve banking. The piece is a rather long historical look at fractional reserve banking and common law traditions going back a few centuries. But toward the end he notes:

"by encouraging people who might otherwise be inclined to oppose heavy-handed government regulation of private industries to favor, on ethical grounds, the outright prohibition of many ordinary banking transactions, the myth that fractional reserve banking is inherently fraudulent strengthens the hand of officials and others who want to hamstring bankers for quite different, but equally unsound, reasons, not excluding a general dislike of free enterprise."

I could not have put it better concerning raw milk drinking libertarians opposed to biotechnology:

by encouraging people who might otherwise be inclined to oppose heavy-handed government regulation of private industries to favor, on ethical grounds, the outright prohibition of many ordinary modern agricultural practices the myth that modern agriculture is inherently harmful or unsustainable strengthens the hand of officials and others who want to hamstring producers and others in the ag industry for quite different, but equally unsound, reasons, not excluding a general dislike of free enterprise.


References:

The "Bagging Rule" – Or Why We Shouldn't Arrest (All) the Bankers

BY GEORGE SELGIN SEPTEMBER 6, 2017 https://www.alt-m.org/2017/09/06/the-bagging-rule-or-why-we-shouldnt-arrest-all-the-bankers/

Henry Miller and Gregory Conko. 'Bootleggers and Biotechs.' Regulation. Summer 2003