A Piedmont area farmer mentioned today that Dannon, a yogurt maker and a downstream customer for products produced from feed grains, will begin transitioning to milk from cows fed only non-GMO grains. Since many dairy cows are fed GMO grains, Dannon will have to find currently non-existent sources, or depend on a very tight supply of milk from dairies feeding only non-GMO feeds. According to Politico.com, which reported on the story in April, Dannon purchases 40 percent of its milk from 13 dairy farms owned by seven families through an arrangement called a Cost Performance Model in which Dannon guarantees their profit margins. The other 60 percent of milk comes from the traditional market, according to Politico.com.
The farmer who commented on the Dannon story was a dairyman from Alamance Co. He raised the concern about when food manufacturers move from commodity inputs to identity-preserved inputs like non-GMO soy and corn and how producers would be able to respond. Whether it’s one manufacturer and 13 suppliers or a national retailer with thousands of suppliers. Whether the market channel for identify-preserved grains would operate more or less like the market for commodity grain, if demand for IP grains increased and became persistent. About how vulnerable producers would be to a market shift in this direction, and if such a shift is imminent.
Soy producers are able to include GMO seed traits in their cropping systems and it has become the norm, and they can also plant non-GMO and identify-preserved beans when it fits their business model. Our soy meal customers in the swine, poultry, beef and dairy industries are the world suppliers of animal protein, just like soy growers are the world source of vegetable protein. Being one step closer to the consumer, these animal producers will be the first to pencil out the supply / demand situation with qualitatively different feedstuffs if that’s what distributors and retailers want. To date, animal care considerations have changed due to retailer and consumer demand and animal producers have responded and borne the cost. This did not originally include non-GMO feedstuffs. Should we be watching for evidence of passed-down demand for increased IP production in the feedstuffs industry, and will such a development provide economic opportunities for soy and grain growers and the animal industry?
