A debate over the weed killer dicamba could end up limiting the use of agriculture herbicides and result in winners and losers among chemical companies and farmers.
Efforts to ban the herbicide could benefit the prices of agriculture products such as soybeans and cotton. At the same time, equities of chemical companies could face downward pressure. But no matter the outcome, the more likely winners will be non-genetically modified organics and owners of non-GMO farmland.
Growers across the U.S. farm belt reported that dicamba sometimes drifted as far as a half-mile from where it was sprayed, damaging millions of acres of soybeans and other crops, even though the chemical was used according to instructions. About 3.1 million acres of soybeans vulnerable to dicamba were hurt by spraying this summer, accounting for 3.5 percent of U.S. plantings, according to the University of Missouri. There are also reports of contaminated application equipment.
Known in the industry as “cupping,” crop exposure to dicamba has caused leaves to buckle and curl. Over the summer, the Arkansas Plant Board imposed a 120-day ban on the sale and use of dicamba in response to escalating concerns about the alleged misuse of the herbicide. The board also increased the civil penalty for the chemical’s misuse to as much as $25,000. Missouri placed a shorter ban on dicamba in July. Farmers, along with Monsanto, which produces dicamba-based herbicides, submitted petitions opposing the ban, claiming that Arkansas was an outlier, that a ban would put the state’s farmers at a competitive disadvantage and that any crop damage was the result of misuse. BASF, which also sells a dicamba herbicide, joined the fight.
The Arkansas board is considering barring dicamba entirely beginning mid-April 2018. A hearing on Nov. 8 will be followed by a regulation meeting on Dec. 12. Then the rule will move to the Executive Subcommittee of the Arkansas Legislative Council for final approval.
The U.S. Environmental Protection Agency, which isn’t known as a stalwart environmental advocate under the current administration, is considering either an outright ban of the herbicide or significant changes to the rules around its use. The EPA had given dicamba weed killers from Monsanto and BASF abridged two-year registrations instead of the customary five years.
State regulators and university specialists are pressuring the EPA to speed up the decision because farmers will make planting decisions for next spring over the coming months. Yet there’s great uncertainty around dicamba. So far, there’s been limited testing of its performance, particularly, according to Agweb, regarding drift (occurring during spraying), volatility (post-spray movement when in gas stage) and temperature inversion (formation of small droplets moving offsite via wind). Summer, in particular, can be a riskier spraying time because high temperatures can increase volatility. And for now it isn’t known how damage attributed to the herbicides will affect yields of soybeans because the crops have not yet been harvested.
To complicate matters, Monsanto also produces a new kind of soybean and cotton seed, Xtend, which is genetically modified to protect crops from the company’s own dicamba herbicide. Beginning in the mid-1990s, and the birth of genetically modified crops, farmers could use a Monsanto product called Roundup to rid their crops of weeds without damage. But when the weeds became resistant to that compound, the industry created seeds that could tolerate the herbicide. Xtend, according to the New York Times, was one of the biggest product releases in Monsanto’s history. It sells at a significant premium to standard seeds, as do the soybeans that it produces.
Yet farmers across the grain belt’s 25 million acres of planted soybean and cotton fields aren’t united. Although many are more productive thanks to dicamba, more cash-strapped farmers who didn’t purchase the premium seeds along are filing a joint suit with non-GMO farmers, claiming their crops have been affected by neighboring farms using the chemical. Still other farmers, against their will, feel compelled to purchase the modified seeds to protect from dicamba creep. In addition, environmentalists argue GMO seeds will encourage greater use of pesticides that can increase reproductive risks and birth defects.
Monsanto, which is about to be acquired by Bayer, has projected that its Xtend system would return a $5 to $10 premium per acre compared with less-protected soybeans, creating a $400-$800 million opportunity once the seeds are planted on an expected 80 million U.S. acres. By 2019, Monsanto predicts U.S. farmers will plant Xtend soybeans on 55 million acres, or more than 60 percent of the total planted this year.
So a ban would severely hurt sales and the equities of Monsanto, BASF and DuPont. Furthermore, it would make it unnecessary to plant Xtend seeds. While all three companies have addressed the problem by modifying their herbicides, they have yet to fix it.
A ban would likely give further support primarily to soybeans, in addition to cotton and other affected crops, as farmers will have to find alternative means of weed elimination. Finally, non-GMO farming and demand for its produce will continue to increase despite their premium price compared with traditional crops.
(Source – http://www.blackseagrain.net/novosti/ban-of-herbicide-could-benefit-agriculture-prices)