Jim Schweigert President, Gro Alliance

A third-generation seedsman, Jim Schweigert grew up in the family seed business and was exposed to industry issues at an early age. He earned a Bachelor of Arts in public relations from the University of Minnesota and worked for corporate public relations firms in Minneapolis, Chicago and Atlanta before joining the family business full time in 2003. He has since been active in the American Seed Trade Association, the Independent Professional Seed Association and earned his master’s in seed technology and business from Iowa State University. As president, Schweigert manages client contracts and crop planning, as well as business development and new market opportunities. His unique background and experience make him one of the seed industry’s leaders in innovation. As such, he was honored as Seed World’s 2009 Future Giant and currently serves as chair of the board of directors for Seed Programs International.

Following are a few common phrases I’ve heard farmers say over the last couple years.

“I think corn borer is almost extinct.”

“I can’t afford all the traits I used to buy.”

“I’ll just spray if I have to.”

Some dismiss this as “just talk.” At Gro Alliance, we see seed companies marketing more conventional corn hybrids and/or promoting hybrids with lower trait loads. It makes sense. Commodity prices are in a trough that could last a few more years and farmers are looking for ways to reduce input costs.

So, what does this mean for the future of GMO traits? Follow the money. The major biotechnology companies are spending more money on projects that have nothing to do with GMO seed. Big data, biological seed treatments and non-GMO breeding techniques, like site-directed nucleases (CRISPr), are earning significant investment. This is likely due, in part, to soft commodity markets and farmers’ seed buying decisions. However, it could also be partially driven by the broader global regulatory environment.

According to GMOanswers.com, it takes 13 years and $130 million to bring a new GMO product to market. Five to seven of those years are just to clear the regulatory process. For some traits it takes an additional two to four years for that process. Imagine if that happens for all traits. That changes the ROI calculation pretty quickly. Now, the blockbuster trait will take longer to generate the revenue necessary to pay off the investment.

Worse yet, another competitive trait could come into the market during that time and compete for market share immediately. That would eliminate the first-to-market advantage. Further, farmers may not adopt the new trait as quickly as expected due to lower commodity prices. Do you still want to spend $130 million, or more, on this?

This is the dilemma of investing in GMO traits. The science is safe, the products work and they have generated excellent returns for the developers and farmers, but what about the future? The current combination of lower commodity prices and higher hurdles for regulatory approvals negatively impacts both the revenue opportunity and development costs of GMO traits.

The development of improved crops through GMO breeding methods isn’t over, but the seed industry is increasingly investing in ways to produce better hybrids and varieties using non-GMO methods. It’s easy to see why.