NEW YORK (TheStreet) — Through the first months of 2010, the Market Vectors Agribusiness ETF(MOO) has been punished as a storm of bad earnings reports and sliding food prices pressures the fund below its 200-day moving average, but this slide may not be over.
At the close of 2009, MOO was lauded by many as the go-to fund for investors looking for a chance to play a fertilizer industry turnaround in 2010. At the time, the global economy was well on the road to recovery and growth forecast in China’s markets was seen as a catalyst for food demand. In order to keep hungry mouths fed, farmers would need to step up yields, providing the fertilizer industry with an ideal window for growth.
Agricultural chemical companies make up more than 45% of MOO’s total portfolio, and with Potash of Saskatchewan(POT) and Mosaic(MOS) in the top-10 holdings, MOO appeared well equipped for any such windfall.
Unfortunately the first months of the year have passed with no such boost. Although names including Terra Industries(TRA), CF Industries(CF), Bunge(BG) and Vale(VALE) grabbed headlines when M&A activity heated up early in the year, any benefits from their respective deals have long been wiped away as investors focus on debt issues coming to a head in the eurozone and economic tightening in China.
Rather than living up to the optimistic forecasts for the fertilizer industry, POT and MOS have tumbled 6% and 19%, respectively, in 2010. Once bright, MOO’s future is now clouded in uncertainty.
Op-Ed Contributors – The Value of Genetically Engineered Foods – New York Times
Op-Ed Contributors
Genetically Engineered Distortions
By PAMELA C. RONALD and JAMES E. McWILLIAMS
A REPORT by the National Research Council last month gave ammunition to both sides in the debate over the cultivation of genetically engineered crops. More than 80 percent of the corn, soybeans and cotton grown in the United States is genetically engineered, and the report details the “long and impressive list of benefits” that has come from these crops, including improved soil quality, reduced erosion and reduced insecticide use.
It also confirmed predictions that widespread cultivation of these crops would lead to the emergence of weeds resistant to a commonly used herbicide, glyphosate (marketed by Monsanto as Roundup). Predictably, both sides have done what they do best when it comes to genetically engineered crops: they’ve argued over the findings.
Lost in the din is the potential role this technology could play in the poorest regions of the world — areas that will bear the brunt of climate change and the difficult growing conditions it will bring. Indeed, buried deep in the council’s report is an appeal to apply genetic engineering to a greater number of crops, and for a greater diversity of purposes.
Invasion of the Superweeds – Diversify Weed Management – NYTimes.com
Micheal D. K. Owen is a professor of agronomy and an extension weed scientist at Iowa State University. He is the co-author of “The Impact of Genetically Engineered Crops on Farm Sustainability in the United States.”
Weeds, like all organisms, respond to selection pressures imposed by the environment. In this case, the primary selective pressure is the repeated use of one specific herbicide: glyphosate.
If farmers adjust their approach to weed control, they’ll be fine.
The solution to the problem for farmers who have yet to cause the evolution of glyphosate-resistant weeds is to adopt a more diverse weed management program that includes tactics other than glyphosate. By altering the selection pressure on the weeds, glyphosate resistance will be slow to evolve.
For those increasing number of farmers who have glyphosate-resistant weeds, the solution is similar but more difficult: adopt alternative tactics that will control those weeds. Of course, often these weeds have also evolved resistance to other herbicides, which, again, is attributed to the historic use of one herbicide as the sole management tactic. In this case, weed control may be more challenging and costly.
Weeds have demonstrated the ability to evolve resistance to herbicides predating the relatively recent adoption of glyphosate-resistant crops. The concern is that crop production systems (corn, soybean, cotton, sugar beets and canola) are now predominantly based on the use of glyphosate. Unless growers use more integrated weed management tactics, the problem of evolved glyphosate-resistance in weeds will likely continue to increase at a growing rate.
While it is unlikely that consumers will experience a direct impact with higher food prices, the farmers will have greater production costs and more difficult management decisions.
As far as what this problem infers about production agriculture is more difficult to assess. However, based on my experience, the risk of herbicide-resistant weeds can be addressed effectively by observing some basic principles of ecology and adjusting management tactics.
Invasion of the Superweeds – Room for Debate Blog – NYTimes.com
Invasion of the Superweeds – The Agricultural Arms Race – NYTimes.com
Blake Hurst farms in northwestern Missouri with his family, raising corn, soybeans and greenhouse crops.
We used to control weeds by cultivating. Three triangular shovels ran between each row of crops, rooting out weeds. We were left with weeds that had tap roots and tough stalks, which slid around the shovels. Sort of a forerunner of herbicide-resistant weeds, when you think about it. We’d cut the escapes with a hoe, which was my summer job.
We used to control weeds the old-fashioned way — with hoes.
Then, we had an outbreak of shattercane, a grass closely related to grain sorghum, which seemed to thrive on the crop protection chemicals we had at the time. Shattercane seeded so profusely that the cultivator was ineffective, and would grow back from below the ground after we cut it with a hoe. A plant that was hoe resistant.
Then, we had Roundup, which ended the threat from shattercane. But some of those wily weeds have evolved to defeat Roundup, and the war between man and weed goes on. No different than it has since the beginning of time.
We haven’t noticed a large problem with Roundup-resistant weeds on our farm because we only use Roundup every other year, and we use crop protection chemicals with different modes of action to lessen the chance of resistant weeds. We will no doubt see an increase in resistant weeds, and we’ll perhaps have to lengthen the time between applications of Roundup to maintain its effectiveness.
None of this is surprising. Of course weeds evolve, and certainly some farmers have overused a wonderful tool, just as doctors have over prescribed antibiotics. Being a technological optimist, I assume that weed scientists and crop geneticists are working overtime to solve the problem. Martial metaphors are disturbing to those who imagine farming as a pastoral stroll with Gaia, but we’re in an arms race with weeds, and thus has it always been.
Invasion of the Superweeds – Room for Debate Blog – NYTimes.com
Invasion of the Superweeds – Room for Debate Blog – NYTimes.com
By THE EDITORS
American farmers’ broad use of the weedkiller glyphosphate — particularly Roundup, which was originally made by Monsanto — has led to the rapid growth in recent years of herbicide-resistant weeds. To fight them, farmers are being forced to spray fields with more toxic herbicides, pull weeds by hand and return to more labor-intensive methods like regular plowing.
What should farmers do about these superweeds? What does the problem mean for agriculture in the U.S.? Will it temper American agriculture’s enthusiasm for genetically modified crops that are engineered to survive spraying with Roundup?
- Michael Pollan, author, “Food Rules”
- Stephen Powles, plant biologist and grain farmer
- Blake Hurst, farmer
- Anna Lappé, Small Planet Institute
- Scott M. Swinton, agriculture economist
- Micheal D.K. Owen, professor of agronomy
Invasion of the Superweeds – Room for Debate Blog – NYTimes.com
U.S. Farmers Cope With Roundup-Resistant Weeds – NYTimes.com
By WILLIAM NEUMAN and ANDREW POLLACK
DYERSBURG, Tenn. — For 15 years, Eddie Anderson, a farmer, has been a strict adherent of no-till agriculture, an environmentally friendly technique that all but eliminates plowing to curb erosion and the harmful runoff of fertilizers and pesticides.
But not this year.
On a recent afternoon here, Mr. Anderson watched as tractors crisscrossed a rolling field — plowing and mixing herbicides into the soil to kill weeds where soybeans will soon be planted.
Just as the heavy use of antibiotics contributed to the rise of drug-resistant supergerms, American farmers’ near-ubiquitous use of the weedkiller Roundup has led to the rapid growth of tenacious new superweeds.
To fight them, Mr. Anderson and farmers throughout the East, Midwest and South are being forced to spray fields with more toxic herbicides, pull weeds by hand and return to more labor-intensive methods like regular plowing.