Argentinian non-GMO soy producer targeting growing feed demand in Europe

12-Oct-2017 - Last updated on 12-Oct-2017 at 13:28 GMT

Related tags Soybean

A Buenos Aires based company says it has developed a non-genetically modified (GM) soy supply chain over the past three years that avoids the use of traders, and allows it focus on traceability.

Kumagro, in collaboration with other Argentinian companies - seed developer group, Don Mario, and production, commercialization and logistics specialist, Grobocopatel Hermanos – said it is producing and exporting non-GMO soybeans, certified under international traceability and IP standards.

Currently, Kumagro has contracts with farmers in Argentina, Brazil, and Uruguay. Next year, it hopes to engage farmers located in Paraguay, said Victor Pino, export manager, Grobocopatel Hermanos.

He told FeedNavigator about the advantages of a business model that starts with non-GMO seed development, then farm contracting and, finally, loading in bulk in ocean going vessels to Europe.

“Kumagro handles the whole execution from farm to ship to final destination.

“It supplies contract farmers with the non-GMO soybean seeds from Don Mario [farmers pay a license for the seed] but they must return their full production back to Kumagro; the farmers [are given] a price with a premium [attached].”

Argentina had been slower getting off the ground in non-GMO soy production compared to Brazil, he said. “This was due [to a lack of] seeds and, then, it took a while for farmers to accept this challenge and see the benefits of these seeds.”

High yielding non-GMO seeds

He said Kumagro is trying to use non-GMO seed varieties that are best adapted to the specific growing regions, and that have the highest yield potential possible, a critical factor when trying to engage farmers, he said.

“[It has, typically, been said] that GMO seeds have a much larger yield potential than non-GMO varieties, which is not necessarily the case. What you do have on the GMO side is the ability to use certain herbicides to reduce the cost of production.

“Cost of production is a bit higher [on the non-GMO side]. However, we have farmers willing to [cultivate non-GMO soy] – firstly because they like the diversification and, secondly, they see that demand is growing for non-GMO soy, particularly in Europe. Demand is also growing in the US.”

He said Kumagro and partners’ production today is limited since they are not traders buying from third parties, but, rather, producers that market their own soybeans; however, they are ambitious.

“We started very small. Last year we shipped one vessel with 26,000 tons. This year we are going to ship two vessels with around 40,000 to 45,000 tons. The past two years, production has been exclusively from Argentina. For the next year, we will have product from Brazil, from Uruguay as well. We will probably have about 200,000 tons. We hope to reach the 1m tons mark in a few years’ time, which is possible.”

Supply chain management

The partners market their non-GMO soy to specific soybean processing plants in Europe.

“Our market is, primarily, northwestern Europe - Scandinavia, the Baltics, Germany, and the Netherlands. We have some customers that audit our whole production; the Scandinavia processors, in particular, have done that. They can see we are not hiding anything and we are doing things the right way.”

In June this year, the partners met with six of the largest European soybean crushing companies.

“There was a lot of interest in our production but some of them are hesitant to work with us. They have made a strategic decision to stop buying non-GMO soy from South America, due to fears of GM contamination risk.

“We hope that they will change their mind. We are trying to do things the right way; we put a huge amount of effort into the management of our supply chain.

Kumagro soy is 99.5% GMO free. “That is a very high standard of non-GMO. Supply chain management and IP is tantamount to our business,” said Pino.

Its production is certified under the ProTerra Standard. “That was a must from day one.”

“We test from the farm on. Of course, there are always traces or residues in the system - if we find contaminated product, we reject that.

“We are confident that the non-GMO seeds we are supplying to our farmers are improving year by year. We only deal in non-GMO soy, and, in terms of identity control, we can trace product back to the individual farm,” he added.