North Dakota Wheat Commission State MeetingDecember 2010

Biotechnology

• Messaging shared with customers

• Market Assessment Research

• International Participation

• Principles of Commercialization

• Outlook

Messaging - What is Biotech?• Bio-technologically derived crops can also be

referred to as:– Genetically modified organisms (GMO, GM)– Genetically enhanced (GE)– Transgenic (TG)– Transformation

• Using modern biotechnology to insert DNA from one species into the DNA of another species, for purposes of:– Addressing agronomic issues limiting yield or quality– Addressing processing or end product issues limiting

productivity, quality or nutrition – Production of nutraceuticals for human health

• Golden rice (vitamin A)

Messaging - Global Expansion of Biotech

Messaging - Countries With Biotech

Messaging - The Need for Biotech• World harvested Area, last 25 years: - World wheat harvested area down 2% - World corn harvested area up 20%

229.8

226.5

131.0

157.1

115.0

135.0

155.0

175.0

195.0

215.0

235.0

85/86 88/89 91/92 94/95 97/98 00/01 03/04 06/07 09/10

Mil

lio

n H

ecta

res

wheat corn

Messaging - The Need for Biotech

2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18$0

$50

$100

$150

$200

$250

$300

$350

$400

Corn Wheat Soybeans

Net

Ret

urn

per

Acr

e

soybean

Source: USDA/ERS - Agricultural Baseline Projections

wheat

corn

U.S. National average return per hectare for major crops

Messaging - Non-biotech Markets• U.S. Wheat Associates will work with industry stake

holders to assure that non-biotech wheat is available to the market– Non biotech wheat will cost more over time due to the

yield/productivity lag.

• Testing and Handling Systems have been developed for non-biotech corn and soybeans– Similar systems will be developed for IP wheat

• The key is a functional tolerance for biotech wheat allowed in non-biotech wheat shipments– CODEX is considering establishment of such a tolerance for

Europe

Messaging - Where Do We Go From Here?

• At the end of the day biotech wheat has to benefit both the buyer and seller

(Consumer and Producers) – Working together we can make that happen through

(Communication and Understanding)– We can achieve mutual benefit, and assure

sustainable supplies of high quality wheat reasonably priced well into the future.

– The key will be a “tolerance” for biotech material in non-biotech shipments

Market Assessments

Market Assessments

• Criteria

• 23 organizations representing trade interests from around the world– Europe, Mexico, Canada, US, Australia, Brazil, India,

Argentina, Russia, China, Paraguay– Providing input to officials, NGOs, others on the

impact and risks regulations have on the trade of biotech products

– Low Level Presence, Adventitious Presence, Liabilities

Trilateral Biotech Statement

www.uswheat.org

- What We Do

- Biotechnology

Principles for Commercialization

1. The technology provider initiates an informative dialogue with the USW/NAWG Joint Biotechnology Committee (JBC) prior to submitting for regulatory approvals in the U.S.

2. Regulatory approvals for food and feed use must be secured in major wheat export markets that will be affected where a functioning regulatory system exists.

3. Commercialization of the trait must not impair the ability of non-transgenic wheat to meet commercially recognized thresholds for the low-level presence of transgenic traits. Appropriate international tolerances for transgenic wheat in non-transgenic shipments must be established and accepted in major export markets. Anticipated thresholds range from 0.9% to 5.0%.

Endorsed by U.S. Wheat Farmers

4. An accurate, economical and timely trait detection test must be provided by the trait developer prior to commercialization.

5. The primary responsibility for education and outreach for new traits will remain with the technology provider. USW and NAWG will actively help seek buyer acceptance and will provide guidance, assistance and resources.

6. The technology provider must demonstrate stewardship of the technology, including education and outreach to growers to assure compliance with agronomic and grower stewardship practices specific to the trait.

Principles for Commercialization (continued)

Endorsed by U.S. Wheat Farmers

Principles for Commercialization (continued)

7. We have examined both certified seed and point-of-delivery value capture models. While there are advantages and disadvantages of either approach, we believe the certified seed model will be most acceptable to the value chain and is the preferred approach. Investment in agricultural technology by private parties requires a return on that investment. We support the protection of intellectual property, including education about the importance of complying with seed and stewardship contract provisions and enforcement of those provisions when necessary. Technology traits should be encouraged for adaption into public wheat varieties.

Endorsed by U.S. Wheat Farmers

Needs and Opportunities

• Increased population– Not in major wheat producing regions

• Increased incomes– Developing countries– Per capita

• Increased trade opportunities– Increased production needed

World wheat consumption

660+ MMT

30 year down trend

+/- 900 MMTDemand in40 years

(+ 240 MMT)

229 MMT

239 MHA

World Population Growth: Projected to 2050

2050+/- 9.5 Billion

20106.8 Billion

Projected World Population Growth2010 to 2050 (From 6.8 to 9.5 billion?)

Southern Hemisphere Wheat Belt

Northern Hemisphere Wheat Belt

Mid-Latitude Demand Concentration

Latin America+ 300 Million

Africa+1 Billion

Asia+1.8 Billion

World Wheat Trade

81/8

284

/8587

/8890

/9193

/9496

/9799

/0002

/0305

/0608

/09

0

20

40

60

80

100

120

140

"Other"

MM

T

If only 50% of the 240 MMT increased demand is traded

internationally…

125 MMT

250 MMT

Trend in “other” importers denoted ( )

2020 2030 2040 2050

50 MMT

l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l

?

Information is updated regularly on the U.S. Wheat Associates and National Association of Wheat Growers websites and distributed via the both the U.S. Wheat and NAWG Wheat Letters

www.uswheat.org

www.wheatworld.org