Wheat May Yet Recover From Monsanto's Fumble

It's been two months since Japan suspended U.S. wheat imports after an Oregon farmer found unapproved genetically modified wheat growing in his field. Despite being no closer to understanding how the wheat seeds got there, the Agriculture Department believes normalized wheat trade with Asia will resume within a month. 

For the farmers whose livelihoods are at stake, it's a $2.5 billion gamble. The wheat crop is getting ready to harvest, and if two of the biggest markets in the world -- Japan and South Korea -- don't open their doors to U.S. wheat by then, we'll need a whole new round of Farm Aid concerts to assist those decimated by the GM debacle.

The problem began in May, after a farmer applied Monsanto's (NYSE: MON  ) Roundup herbicide to his wheat fields but still found plants sprouting. While the overapplication of weed killers is leading to the creation of so-called superweeds resistant to Roundup, the farmer still should not have had any wheat growing. Because of the ban on genetically modified wheat around much of the globe, there is no such wheat grown anywhere.

Not every crop is so protected. Between Monsanto, DuPont  (NYSE: DD  ) , and Syngenta  (NYSE: SYT  ) -- the "three sisters" of GMO seeds -- they control 53% of the world's seed production, yet their control of our food supply is almost universal because of their cross-licensing agreements among themselves and with others, like Dow Chemical (NYSE: DOW  ) .

So even though the wheat plants are supposedly not able to survive, there they were. That development launched a major crisis and investigation. Japan, the world's largest importer of U.S. wheat, and South Korea, the fourth largest, both suspended imports. And last month for the first time in 53 years, Japan offered to buy wheat that wasn't U.S. western white.

Monsanto immediately suspected sabotage. There had been demonstrations by activists leading up to the wheat's discovery, and President Obama had just signed the so-called "Monsanto Protection Act" that prohibits federal courts from halting the sale or planting of modified or engineered seeds. Since that strain of GM seed hadn't been used in years, and then only on an experimental basis, it was unlikely it was a chance occurrence.

Yet the USDA said all the seed used during the testing had been destroyed, except for a small amount kept at the National Center for Genetic Resources Preservation in Colorado. Heck, the government wasn't able to keep weaponized anthrax secure in a bunker without having some of it stolen, so it's not so far-fetched to suspect that wheat seed might have walked at some point.

Canada experienced a similar problem last year when genetically engineered wheat suddenly appeared in its fields, though it doesn't seem to have been the result of a nefarious plot. Rather, Canada geese are suspected of having eaten the crop and later expelled the seeds in their droppings.

Yet both instances highlight the risk that GM seeds can pose to the economy. As no other signs of GM wheat have surfaced (or no other farmer has been brave enough to come forward), it looks like a one-off problem for the industry, though seeds escaping controlled environments and cross-pollinating unadulterated wheat could end up threatening the whole notion of the U.S. serving as the world's bread basket. 

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Read/Post Comments (6) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 27, 2013, at 2:54 PM, GeorgePolitico wrote:

    Motley Fool and other critics should concentrate on whether genetically engineered crops are actually dangerous. As with global warming, where most experts believe that it is occurring and that humans are causing it, most experts believe that genetically engineering of food is not inherently harmful. We are in danger of creating a situation where fear becomes a self-stimulating process, independent of evidence about GMOs themselves.

    The market for genetically engineered food has the potential to expand 20-fold into a multi-trillion dollar industry, with all of the jobs and tax revenues that such an industry would create. Humans and other living creatures are similar in many ways, and the research that will be done on genetically engineered food animals and plants could have many benefits for human medicine, especially in the areas of protein function and food-consumer interactions. Genetic engineering may allow us to harvest enormous amounts of fish protein from reservoirs that are not polluted the way the ocean is polluted and which will not further pollute the ocean and atmosphere the way factory fish harvesting currently does.

    Panic over GMOs is currently a very popular bandwagon, but Motley Fool should do its own research and make up its mind based on the products themselves, not the hysteria.

  • Report this Comment On July 27, 2013, at 4:24 PM, Foolcq2 wrote:

    The above comment by georgepoliticio is outright wrong in dating that experts agree GMO plants aren't dangerous. If this is the case why has every nation except the US, UK and a few outliers banned GMOs outright or require strict uses? Those nations, not driven by the corruption of corporate dominated politics, actually did unbiased studies and found GMO seed causes cancer, sterility, and will take over an organic seed supply by cross pollination in mere generations.

    America, we need to wake up to the horribly irresponsible practice of GMO farming and what it is doing to us. Look at how allergies, cancer, other diseases of the digestive system have skyrocketed in the last decade. There is a connection to how out food supply has been taken over in that time by Monsanto, the maker of DDT and agent orange, which they also claimed were totally safe.

    Dangerous tampering with our food isn't going to change unless we get off our butts and demand it.

    Grow your own food, or buy local organic, and stay away from processed and packaged foods which these days are entirely GMO.

    The rest of the world has caught on to the GMO scam because they have access to the information and we do not, unless we take the time to do research and discern for ourselves.

  • Report this Comment On July 27, 2013, at 4:28 PM, TMFCop wrote:

    GeorgePolitico,

    I have no animus per se against GMO foods (I don't want to ban them), rather I'm for disclosure regarding them.

    I have doubts about whether a seed that can be engineered to be sprayed with Roundup and still grow when everything around it is killed off is good for us long term.

    I have doubts about a crop that can be programmed to create a bacteria that will kill pests but still be ingested by us is good for us long term.

    I also don't trust Monsanto (or the USDA) to tell us the truth. I know that while it was a different management team at the time, Monsanto lied about what was going on in Anniston, GA and then said it was proud it did so because it was in the best interests of shareholders.

    For those who believe there is no difference between a GMO food and a natural one, more power to them for going ahead and eating them. I'd rather not to the extent I am able, but want to know when I am consuming them, so I favor labeling. That way I have the ability to make a choice or not. I don't doubt that Monsanto, Syngenta, and the others believe the public will overwhelmingly reject GM foods if they knew they were eating them and that's why they oppose labeling.

    As for climate change, I think it does happen...as it has for millennia. I don't think man has anywhere near the impact Al Gore and the other alarmists think it does.

    Thanks for reading.

    Rich

  • Report this Comment On July 27, 2013, at 4:33 PM, TMFCop wrote:

    Foolcq2,

    Unfortunately I'm not nearly as good as I should be when it comes to my eating habits, though they are changing. I've begun growing my own food, creating a small permaculture spot in my admittedly small yard, and try to support local farmers when I can.

    But I'm still eating processed foods, I'm still eating store-bought beef which I'm sure is chock full of growth hormones, and while I'm leery about a lot of what Europe does because it doesn't have the same market traditions as we do -- and as I've noted, I'm not for banning GM crops, just labeling them -- I think they're more in the right direction on this issue than we are.

    Cheers,

    Rich

  • Report this Comment On July 27, 2013, at 5:10 PM, Mustafa08 wrote:

    Monsanto has many politicians in its payroll, to let congress, or anybody, interfere with their illegal, inmoral activities.

  • Report this Comment On July 27, 2013, at 9:32 PM, funfundvierzig wrote:

    DuPont is the second largest seed company in the world, and pays Monsanto hundreds of $millions yearly to license Monsanto's genetically-engineered traits. Yet few protestors bash DuPont's GMO seeds.

    We have seen numerous incidents of self-disclosed DuPont employees smearing Monsanto and Monsanto's people over the internet and mocking Monsanto's FRANKENFOODS. Why? DuPont Management and their operatives have a cynical agenda: sell more of DuPont Pioneer's conventional low-tech seeds.

    Merely the opinion and observation of one individual retail investor with a long position in MON, SYT, & DOW, and both short and long positions in DD...funfun..

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