NDSU-Wheat Technology Strategies
New Technologies in Wheat
Presentation by
NDSWC County Rep Annual Meeting
to
Drs. Ken Grafton and Bill Wilson
Dec 7 2010
Grand Forks
William Wilson
Elias Elias
Shahryar Kiainan
Mohamed Mergoum
Kenneth Grafton
Phil McClean
Crop Competitiveness: Longer-term impacts
of GM in competing crops on supplies
Concerns on decreasing wheat
competitiveness
 Impacts of GM in competing crops

◦ Changing geography on production and
displacing other crops, notably small
grains
◦ Changing technology growth rates
◦ Improved technology in competing crops
(RR2 Soybeans, DR corn), raises the
opportunity cost of planting wheat (or
other small grains)!
Dept of Agribusiness & Applied
Economics,NDSU, Fargo - 58102
Corn Planted 1995
Corn 1995 (Acres)
0 - 20000
20000 - 50000
50000 - 100000
100000 - 200000
200000 - 397000
Corn Planted 2009
Corn 2009 (Acres)
0 - 20000
20000 - 50000
50000 - 100000
100000 - 200000
200000 - 397000
Soybean Planted Area 1995
Soybeans 1995 (Acres)
0 - 20000
20000 - 50000
50000 - 100000
100000 - 150000
150000 - 440000
Soybean Planted Area 2009
Soybeans 2009 (Acres)
0 - 20000
20000 - 50000
50000 - 100000
100000 - 150000
150000 - 542000
HRS Wheat Planted Area 1995
Hard Red Spring 1995 (Acres)
0 - 25000
25000 - 75000
75000 - 150000
150000 - 250000
250000 - 405000
HRS Wheat Planted Area 2009
Hard Red Spring 2009 (Acres)
0 - 25000
25000 - 75000
75000 - 150000
150000 - 250000
250000 - 405000
U.S. Harvested Wheat Acres, 1980-2010+, and
Projections for 2007-2016
80
Actual
75
FAPRI Baseline
USDA Baseline
70
CARD Baseline
CARD High Oil Price
million acres harvested
65
CARD Reduced CRP
OECD-FAO
60
Wilson Base
Wilson High Ethanol
55
50
45
40
35
30
Dept of Agribusiness & Applied
Economics, NDSU, Fargo - 58102
GM Trait pipeline…
 Typical time: 10-12 years from concept to commercialization,
including 3-4 years in regulatory review
 Cost: $100+ million (including cost of deregulation)
 Major points
 GM is costly
 GM is time consuming
 GM requires commitment to create “platforms” of multiple
traits for successful future trait commercialization
 inclusive of input traits, quality traits and consumer traits
 E.g., SmartStax: Monsanto-Dow Sept 2007
Expenditures: Crop Protection and Seeds
and Traits 1990-2008
Bayer, Syngenta,
BASF, DOW and
DuPont were the
firms that spent the
most on Crop
Protection R&D.
Monsanto
dominates the
“seeds and traits”
sector
 Comparative R&D
Expenditures

 Wheat—about
70c/acre/year
 GM Row crops:
$10/acre/year
16
14
Expenditures ($ Bil)

12
10
8
6
4
2
0
Bayer
Seeds and Traits
Dow
C rop Protection
Dupont
Monsanto
Syngenta
New GM Traits and Competition

Results of these expenditures in
research is for
◦ Emergence of new GM traits
◦ An escalation in yield growth rates
Dept of Agribusiness & Applied
Economics, NDSU, Fargo - 58102
Industry Soybean Portfolio*
□ Agronomic
□ Quality/Food
A Steady Pipeline of New Biotech Events Nearly Every Year
Omega-3
(Monsanto;
RR2Y
High
Stearate
(Monsa
nto;
High BetaConglycinin
Pioneer/DuPont
)
(Pioneer/DuPont)
GAT/Glyphosate-ALS
(Pioneer/DuPont
)
Liberty Link
(Bayer)
Glyphosate &
isoxazole tol.
(Bayer)*
Antibody containing
(against E.
coli 0157:H)
(Monsanto;
Pioneer/DuPont
)
201X
HPPD
Tolerant
(Syngenta)
High Oleic, Stearate
(Pioneer/DuPon
t)
Processing:
High Oil Soy
(Syngenta)
Pioneer/DuPont
(Monsanto;
Pioneer/DuPo
nt)
(Pioneer/DuPont)
High Oleic
(Monsanto;
Yield
Feed: High Protein
Soybean
Modified 7S
Protein FF
Nematode
Resistance
Rust
(Monsanto)
LowPioneer/
Phytate
DuPont)
Pioneer/DuPont
2009
Pioneer/DuPont
Dicamba Tolerant
(Monsanto
;
(EPA/DHA)
(Monsan
Low Sat
to)
(Monsanto)
Steandon
ic Acid)
Monsanto
Omega-3
Bt/RR2Y
Disease
(Monsan (Syngenta)
to;
Soybean Cyst
Pioneer/DuPont)
Nematode
Monsanto;
Pioneer/DuPont
Herbicide tol.: 2,4-D
(Dow) and
aryloxyphenoxy
*Estimated commercialization pipeline of soybean biotech events prepared by the American Soybean Association,
propionate
(Monsanto)
Disease
Resistance
Drought-tolerant corn
Designed:
◦ to provide farmers yield
stability during periods when
water supply is scarce by
mitigating the effects of
drought – or water stress –
within a corn plant.
 Field trials have
◦ Exceeded 6 to 10 percent
target yield enhancement
◦ about 7 to 10 bushels per
acre ($35-$50/acre)
◦ Applicable to some of the key
drought-prone areas in the
United States.


Drought: Trait efficiency—wheat..
1

Results to date:
 Australia GM lines
had yield 20
percent higher than
conventional wheat
varieties under
conditions of
drought stress
(prospectively
greater).
Cumulative Probability
0.9
0.8

0.7
0.6
CT
0.5
DT = .20
0.4
DT = .25
0.3
0.2
0.1
0
20
25
30
35
40
Yield (bu/a)
Northern Great Plains
RRACs
2
45
50
55
Missouri Basin
At 20 Percent Efficiency Gain (in $)
7.22
9.95
At 25 Percent Efficiency Gain (in $)
2
13.73
9.99
Value of DR Wheat in US
Upper=20% efficiency gains
Lower=25% efficiency gains

Millions
Option Values Across Stages of Development
($in Millions,20% Eff. Gain)
600
500
400
300
200
100
0
Min
Mean
Max
Millions
Discovery
Proof of Concept
Early Development
Advanced
Development
Regulatory Submission
800
700
600
500
400
300
200
100
0
Min
Mean
Max
Discovery
Proof of Concept
Early Development
Advanced
Regulatory Submission
Dept of Agribusiness & Applied
Development
Economics,NDSU, Fargo - 58102
Yield Trends in Corn: USDA View
(embodies tremendous technological innovation)
GRAIN YIELD (kg ha-1)
12000
Transgenic (Bt)
insect resistance
Soil testing, balanced NPK
fertilization, conservation
tillage
10000
8000
?
Double-X to
single-X hybrids
Reduced N fertilizer
& irrigation?
6000
4000
Expansion of irrigated area,
increased N fertilizer rates
2000
1965
1970
1975
1980
Integrated pest
management
1985
1990
y = 112.4 kg/ha-yr
[1.79 bu/ac-yr]
2
R = 0.80
1995
2000
2005
YEAR
K.G. Cassman, CAST Renewable Energy Agriculture, In Press.
15
New GM Traits and Competition

Impact of
advanced
breeding with
Marker assisted
breeding and GM
technologies
◦ Emergence of
new GM traits
◦ Escalation in
yield growth
rates
Dept of Agribusiness & Applied
Economics, NDSU, Fargo - 58102
Emerging Competition in Wheat Technology
AgBiotech Firm

Traits
Strategies Initiative
VABC (Australia)
DR, NUE, Fungal, other
Developer in collaboration with private
sector partners
DOW
Not specified (yet)
JV with World Wide Seed (2009) and
recent acquisition in seeds (?)
Bayer
NUE, DR, yield , stress tolerance, improved
utilization of phosphorus.
Collaboration with CSRIO in Austraila
Acquires US biotech company Athenix
Corp.; $1billion worldwide
Syngenta
FR; Ug99, Stem rust
Partnership with CIMMyT; Hybrid
breeding
Acquired Agpro seed (about 5 years
ago); Resource Seeds ( Calif.) Hybrid
wheats in Ks.
Monsanto/ BASF
Drought Res., NUE, yield increase. 8-10
years out (2022)
Acquired Westbred seed and (August
2010) of 20% stake in Intergrain, W.
Australia wheat breeding company
Partner JV w/BASF on stress traits
Limagrain
NUE, DR
For US Plans to bring GM wheat to
market by 2016 and 2018 (5-7 years
away).
JV in Arg w/Don Mario to develop high
tech wheat in S. America
GM Wheat Issues/Impacts

Issues
◦ Massive acceleration of funding for research
◦ Partnerships being created with Public Universities for
Germplasm
◦ Numerous common traits (DR, NUE, Yield) will force
immense competition regarding trait efficiency,
consolidation and expanding into other traits (quality,
consumer)
◦ 10 years out
 Other crops will have up to 20 more traits commercialized during
this period.

Impacts
◦ Reduce cost of wheat production by $10-20/acre
◦ Increase in competitiveness relative to other GM crops
(corn and soybeans)
◦ Concentrated in N. America, and Australia
Dept of Agribusiness & Applied
Economics,NDSU, Fargo - 58102
Technologies in Wheat
Technology
Status
NDSU
Partners
Conventional
Breeding
Current for
NDSU;
Developing for
tech firms
Strong proprietary
germplasm/varieties
Extremely
limited/nil
germplasm, but,
building breeding
(seeds and traits)
Marker
assisted
breeding/
molecular
markers/
sequencing
•NDSU
currently using;
•Firms are
expanding
•Accelerated in
3-5 years
•NDSU has own
program
•All markers (to date
are public)
•Capabilities, but,
limited in throughput
Hi-throughput
chipping
capabilities;
GM Traits
10-12 years
None—dependent on
licensing
New traits: Y,
NUE, DR, others
Wheat Yield Under Alternative Technology Assumptions
55
GM
MAS
NDConv
45
P r ivate 1 GM/Mr k
40
35
2009
2011 2013
2015
2017
2019
2021 2023
2025
2010
2012
2014
2016
2018
2020
2022
2024
60
55
NDConv
NDGM(Sim )
50
NDGM(Delay)
NDMRK/GM
45
Pr ivate 1 GM/Mr k
Pr ivate 1 GM/Mr k/GP
40
35
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Bu/a

Bu/a
Wheat technology
◦ Marker assisted
selection +12%/yr
 Technology
modeling
assumptions (lower
figure)
◦ 2% MAS
◦ 10% GM
• NDSU retains
advantage due to
germplasm and
access to alternative
technologies
50
20
NDSU High-Level Strategy
Longer-term Vision for Wheat Improvement at NDSU (and, template
for other crops)
1. Germplasm enhancement
2.
Variety release
3.
Partnering w/companies for new technology (more important
in the future)
 Trying to get more investment tied to NDSU/ND Wheat
growers!
 Goal: Multiple agreements
◦ Commercial Strategies/Agreements
◦ Research Collaboration


Composition of agreements: Highly strategic in several
respects
◦ Multiple traits and technology providers
◦ Research collaboration—provides longer-term technology
development; but, also, credibility and leverage
Dept of Agribusiness & Applied
Economics,NDSU, Fargo - 58102
Importance for NDSU




Large penetration into the HRS markets throughout upper
Midwest (and abroad)
Premium products in the domestic and international wheat
market
Wheat research commitment
◦ budget=$8+ million/yr (largest in the country)
◦ $1million from commodity groups.
◦ 18-20 PHDs plus Res Sci/assistants
GM proposals involve
◦ Major opportunities for NDSU
◦ Major risks for NDSU
◦ Major change in the way germplasm/variety business will
be conducted in the future
Changes Planned/Anticipated for
Wheat in ND and at NDSU

Breeding Relations
◦

MTA procedures
◦

Reduced role of MTA which will become more bi-lateral with terms; vs.. multilateral
reciprocity without commercial terms
To be refined to accommodate above
IP protection: NDSU in process of reviewing/establishing policy to
◦
Patent varieties
◦
Impose restrictions on access to germplasm

Co-branding (see below)

Royalty mechanisms

Informational requirements
◦

Testing protocols
◦

Need to be developed to facilitate commercial relations with tech firms
NDSU will likely adopt protocols for GM trait testing and evolution
Seed distribution
◦
Will change to accommodate technology companies; and their bundling of traits and seeds
NDSU Objectives in Enhanced Wheat Technology
Protect and preserve value of NDSU developed germplasm
 Simultaneous access to GM traits for NDSU varieties to serve
growers in ND
 Assure ND producers have access to enhanced technology for
wheat improvement on a timely and efficient basis


Research collaboration
◦ NDSU needs to be involved in longer-term higher-level
research on wheat technology (markers, germplasm,
economics, etc)
◦ Longer-term relations with technology companies

Royalty stream for lines and varieties used by other
entities that reflect their value

Reserve right to work w/other technology companies including,
where/as appropriate (as allowed by inter-firm relationships) trait
stacking
Hi-level seed/distribution under
NDSU-Tech Firm Agreements
10 years out
NDSU non-GM varieties
NDSU GM varieties
•
•
License GM traits from tech companies
Royalties ($) paid to tech company for GM Traits
NDSU Germplasm
Tech company seed co-branded with NDSU germplasm
and tech company GM Traits
• NDSU Co-Branded germplasm licensed from NDSU to tech
company
• Royalty ($)paid NDSU
Tech company developed seeds with own-GM Traits
• Germplasm from NDSU provided under MTA and
crossed with tech company owned-germplasm
• Royalty ($) paid to NDSU
Summary and Issues



Major changes in technology for wheat improvement
Changes necessarily involve private-public forms of
collaboration
At issue
◦ Private firms wanting access to public germplasm
◦ Public programs wanting access to private sector technology and
assurance
◦ New competitors in seed and technology
◦ Changes in the form of seed distribution
 New competitors
 Bundled products
 Patented seeds and TUA’s
◦ Lesser controls (prospective) on quality for variety release

Producer input on any/all of these are welcome
◦ Currently dialoguing directly with NDSWC for input
◦ Future meetings with technology firms and NDSWC and other
stakeholders
Dept of Agribusiness & Applied
Economics,NDSU, Fargo - 58102