From the Editor
Pro Farmer Editor Brian Grete takes time to talk with Pro Farmer Members about some of the key issues in each week's Pro Farmer newsletter.
Cheerios will make consumers question GMO safety.
Jan 03, 2014
Hello Pro Farmer Members!
Happy New Year!!
2013 was a challenging year for many... no doubt about that. And 2014 is here with what is sure to be a new set of challenges for us all. Pro Farmer will do the best we can to help you have a happy and prosperous 2014!
Is "bad news" "good news" again?
Egypt booked a bunch of wheat today... and none of it will originate from the U.S. That is not good news... and wheat futures led a round of short-covering in the grain markets today. There's some speculation that some hard red winter wheat might be vulnerable to some winterkill over the next several days as really cold temperatures move across the country. That speculation did also get a mention for spurring the short-covering in the wheat pit today... but there is always some HRW and SRW wheat that's vulnerable to winterkill. The winterkill "reasoning" doesn't seem to hold much water.
It's probably most accurate to chalk up today's gains in wheat to a short-term rally in an established bear market. Wheat futures were seriously oversold after posting a new contract low yesterday, so some short-covering today will give market bears more ammunition to come back on the short side of the market next week. I won't ignore some of the bullish issues in the wheat market, but until the downside momentum is broken by a series of higher closes, I can't call today's bounce any more than a blip in the longer-term downtrend.
And corn futures even participated in the short-covering surge and closed near session highs after posting a new contract low earlier in the day. That's despite what appears to be improving growing conditions in Argentina and Brazil. Some South American crop estimates were trimmed a bit by some crop-watchers, but recent stress on South American crops has clearly been factored into market prices.
And lets throw some Cheerios in the mix. General Mills says it will start making non-GMO original Cheerios and will label the product as non-GMO. Of course the main ingredient in Cheerios is non-GMO, but General Mills will start making original Cheerios with non-GMO corn starch and sugars. This move is a notch in the belt of the anti-GMO crowd, even though General Mills says original Cheerios will be the only non-GMO product they'll offer. General Mills says it was an "easy" move to go non-GMO on original Cheerios because they already make the product for the European market. Which is probably right...
... but why label it as non-GMO? All General Mills is doing by labeling original Cheerios as non-GMO is opening the company to questions about why their other products aren't non-GMO. And if they get questions about the non-GMO issue, any dip in sales resulting from an uninformed consumer shying away from General Mills products that are not labeled non-GMO will... you guessed it... result in General Mills offering more non-GMO products.
Short-term, the General Mills move won't have much impact on the market. But if the non-GMO label issue snowballs like food issues have in the past (think lean finely textured beef), General Mills will have turned an iconic food brand into a lightening rod.
If USDA Secretary Tom Vilsack is paying attention, he should probably head to Minneapolis to have a talk with the decision-makers at General Mills about how to maintain confidence in the safety of General Mills' (and the U.S.) food supply.
That's it for now...
... STAY WARM!!!
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