Moneywise: Roundup Ready Forage for Spring Planting

March 2, 2011 01:02 AM
Moneywise: Roundup Ready Forage for Spring Planting

Roundup Ready Forage for Spring Planting

USDA announced the deregulation of Roundup Ready alfalfa without conditions in late January. The extensive environmental review took 46 months to complete and included a Supreme Court decision that lifted a ban on genetically modified alfalfa seed.

"We are very pleased that USDA has deregulated the product without conditions," says Mark McCaslin, president of Forage Genetics International (FGI), a codeveloper of Roundup Ready
alfalfa. McCaslin says that FGI and other licensed seed companies are prepared to sell Roundup Ready alfalfa seed to growers for spring planting.

Roundup Ready alfalfa was developed as a joint effort by Monsanto Company and FGI. It was commercialized in 2005, and approximately 5,000 farmers planted Roundup Ready alfalfa on more than 250,000 acres before a court ruling regarding USDA’s administrative process halted any further sales and planting.

Some farmers who planted Roundup Ready alfalfa prior to the ban reported a $110 per acre advantage compared with conventional alfalfa. For many growers, Roundup Ready alfalfa requires less chemicals, providing financial and environmental benefits.

Negotiation Is Not a Competitive Sport

Think not in terms of winning or losing when making deals, but more in terms of making buyers and sellers of goods and services your partners, says Bret Oelke, University of Minnesota Extension specialist in agricultural business management. He says that many producers have a major misconception that all customers are equally valuable.

"This is not true," Oelke says. "The fact is that 20% of customers generate 80% of profits. Producers need to think about the target customer of buyers and sellers."

Farmers fall into one of two categories: empire defenders, or well-established farmers trying to protect their business, and empire builders, or those trying to grow. They are treated differently by buyers, Oelke notes. For example, an ethanol plant needs 30,000 bu. of corn on Jan. 3. The plant manager calls an empire builder, who is willing to deliver the corn, and as a result, the ethanol plant reduces his basis as part of the negotiation.

"Not a lot of wiggle room exists when negotiating on seed and fertilizer," Oelke says.

There is more room to negotiate on labor and services. Negotiating isn’t always about price. For example, deals can be made with fertilizer dealers to lock in product and price in exchange for a small amount down. Producers also may be able to negotiate flexible leases in some areas. However, "it takes a great deal of trust," Oelke says.

New Executive Ag Seminar for Women

Watch future issues of Top Producer and check for information on our Executive Women in Agriculture (EWA) seminar, coming this summer. This brand new event is geared toward women farm managers, marketers and any farm woman interested in honing her business skills. Come meet other like-minded women for a chance to network at this exclusive event!

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