There Are No Palm Trees on My Street

It seems like eons ago when I first related some of my thoughts about agricultural biotechnology and how it was going to change the world. For instance, at the time I had a common saying that someday our streets here in southwestern Ontario would be lined with palm trees. I was thinking the wonders of agricultural biotechnology really had no limits.  Little did I know that corporate greed would get into the way.  Of course, I’m still waiting for those palm trees to grow. It is a long and winding road getting to the place you often want to be.

Sometimes geopolitics gets in the way of our progress on the agricultural road toward Nirvana.  At the present time our American friends are having a bit of a dispute with our Mexican friends on the export of genetically modified corn into Mexico.  Mexico has called for genetically modified corn for human consumption to be phased out by January of 2024.  You can imagine the attitude of the American government in this case.  There is a lot of righteous indignation and threats of a trade challenge.

Of course, it is always difficult to know the end game with regard to Mexico getting their wish. As Canadians we know our American friends will always win against Canada and Mexico. It is always up to the smaller countries to figure out how to get what they want through other means. As it is, there is the expectation that Mexico, the second largest corn importer from the United States is about to cut their US corn imports 30 to 40% by the year 2024.

There is really nothing new about this as the market has known this for quite some time. Today, March corn closed at $6.82 a bushel in December 2023 corn closed at $5.90 a bushel. These are still very good prices.  The corn market is not shaking in its boots because of Mexico’s intentions.  However, this type of thing is a major departure from where we thought our agricultural biotechnology revolution might go. Back in the heady days when I was predicting palm trees on southwestern Ontario streets, I could have never imagined whole countries repudiating requests to turn down the import of agricultural commodities simply because of genetic modification.

It’s hard to know how that tussle will turn out. There is an increasing desire by some countries to lessen their dependence on American agricultural commodities. China is one of those, putting together new trade agreements with Brazil and other countries. Mexico is certainly an outlier, but even they will likely go to the limit to try to source enough non-GMO corn. The marketplace will just continue to get more complicated.

You would think that “cheap” always wins.  Remember what I have always said, isn’t a commodity, a commodity, a commodity?  The great default has always been that a bushel of corn grown in the United States is the same as a bushel of corn grown in China or Brazil. When you add “cheap” to the mix It is always led to a seamless transfer of commodities to every corner of the earth. Who knew that a little bit of geopolitics mixed in with some genetic modification might make the train go off the track someday.

This is all taking place in a commodity world where the Russia Ukraine war continues to loom as a major distraction and fracture of our agricultural commodity world. This past week we saw that Germany, Poland, the United States and Canada as well as other nations have agreed to send tanks and ammunition to Ukraine. Russia has responded by sending even more missiles into Ukraine.  This will affect the grain trade in a violent way without a doubt in the coming weeks and months.

It is a stark contrast in our agricultural commodity food world. On one hand you have a country like Mexico among others in Europe that prefer a non-genetically modified food source. On the other hand, you have an armed conflict which is impacting many of the poor regions of this globe who simply prefer food whether it’s genetically modified or not.  It’s a tussle that is not only unfortunate but it’s also going to be exceedingly expensive for everybody involved.

The war will be expensive and as it continues so will be the food we eat while watching it.  Think of all the cost of these tanks in the war in Ukraine on both sides, the lives lost, and the economic gains gone forever.  There are no palm trees on my street.  Something tells me now, that’s never going to happen.