Trait Territory Defined

Duracade Launch Limited

Corn containing the Agrisure Duracade trait will need special handling this fall to protect export markets. (DTN/The Progressive Farmer photo by Jim Patrico)

DECATUR, Ill. (DTN) -- Syngenta is trying to put a fence around its new genetically-engineered rootworm trait called Agrisure Duracade for 2014. Sales of the new trait will be limited to a specific U.S. marketing region that corresponds to a trading relationship with Gavilon Grain Company.

Syngenta signed an agreement with Gavilon in February as a way to specifically funnel corn produced from the Duracade trait into the grain stream. The trait has become controversial because it is not yet cleared for import into China and the European Union.

The issue over the new Duracade trait follows the rejection by China of more than 600,000 metric tons of corn containing another Syngenta corn trait, Agrisure Viptera, which also does not have regulatory approval in that country.

David Morgan, president of Syngenta seeds, stated in a DTN interview that the company plans a limited launch of the new rootworm trait this spring. "We intend to position the product on about 250,000 to 300,000 acres," said Morgan. "That will be in our Syngenta brands (Golden Harvest and NK Brand) and some of our GreenLeaf customers will have access to it." Syngenta provides genetics and traits to independent seed companies through GreenLeaf.

"If Gavilon does not have coverage in an area, we have said we would not position our technology there. If there are areas where exports are dominant, we will volunteer to not position corn in those areas," Morgan said.

Syngenta has mapped sales zones (http://bit.ly/…) as part of their "Right to Grow" program. Rootworm is not a universal corn pest and Morgan said seed sales would be concentrated in areas where growers are experiencing the most pest pressure and rootworms have shown the ability to resist other control measures.

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The southern border of the sales region starts 30 miles west of the Mississippi River in Missouri, heads east at Highway 36/I-72 to the Illinois and Indiana border and heads south to I-64 East extending to the East Coast. The northern border extends straight east across South Dakota along Highway 212 up the Minnesota/South Dakota border to Highway 12 and east to Highway 71 and north to the Canadian border.

Jill Wheeler, Syngenta product lead for commercial traits, said recent announcements that Syngenta would not sell Duracade in Canada correspond to the Gavilon footprint. Wheeler said no seed containing Duracade had yet been delivered in Canada. "Where there was seed that had been delivered in the U.S. to areas outside the launch zone (a very small quantity), the order was canceled and a substitution made. The bags of seed are being retrieved back to Syngenta warehouses. Since all bags are tracked in our inventory, all can be accounted for," she said.

Gavilon's grain handling network extends over 130 facilities with 330 million bushel storage capacity, said Greg Konsor, Gavilon vice president and general manager commercial management. The firm was purchased in 2013 by Marubeni Corporation, a Japanese trading company, and has roots back to ConAgra Trade Group and Peavey Company.

Gavilon's arrangement with Syngenta represents the supply chain expanding beyond the basic commodity model in grain marketing. In January, grain trade associations asked that the Duracade trait introduction be delayed until cleared in all markets. Fearing possible trade disruptions, large grain companies such as Archer Daniels Midland (ADM), Bunge, Cargill and Consolidated Grain and Barge (CGB) began warning growers that marketing opportunities will likely be limited if additional regulatory approvals were not in place by harvest.

Duracade has been approved for cultivation in the United States and Canada. It is also cleared for import by most overseas buyers, including Japan, Mexico and South Korea. The sticking point is that since November 2013, Chinese authorities have rejected more than 600,000 metric tons of U.S. corn and corn products containing another genetically-engineered Syngenta corn trait, Agrisure Viptera, because that trait does not have regulatory approval in that country.

"We've watched the two industries -- the seed industry and the grain industry -- for the past few years be on opposite ends of the spectrum as they try to handle new genetics in the marketplace and there hasn't been much progress," Konsor said during a press conference at Commodity Classic. "We're a big grain company. We understand that by partnering with Syngenta to get this agreement in place, it allows us to handle more grain, find more customers and be solution providers to a complicated supply chain problem."

Konsor said the company expects to be working with about 3,500 growers who have planted hybrids containing Duracade. "We are going to start in April and we have five solid months to work with that grower to find the right [sales] outlet," he said. He added that a strategic plan is being developed that will require growers to have multiple conversations with Gavilon traders throughout the growing season to find destination approved sites.

Growers will be required to sign standard stewardship agreements that state they are willing and able to direct Duracade corn to appropriate end-use destinations. That agreement also includes protocols around field selection, planter cleanout and correct harvesting and storage procedures. While the agreement doesn't necessarily require farmers sell the corn to Gavilon, Konsor indicated every grower who plants the product will be contacted by the grain firm.

Feed mills, wet mills and livestock yards will be prime destinations. "We want to work with other grain companies -- cooperatives and independents -- to be part of the stewardship program and we will help facilitate that," Konsor said. "And if there's a grower where he can't find another elevator or feed mill, Gavilon will step in and buy that corn and bring it to an approved elevator or marketplace."

Konsor added that part of the Syngenta agreement requires that Gavilon offer market-based bids. "We will buy it at market price and move it to the right market," he said.

Pamela Smith can be reached at Pamela.smith@dtn.com

(GH/AG/CZ)

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