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The Economics Behind GM Stockfeed in Australia

18 May 2009

Emma Ansell and Eamon McGinn report on the economic issues for producers and consumers behind GM stockfeed, in this Australian Bureau of Agricultural and Resource Economics publication.

Summary

The use of stockfeed containing genetically modified (GM) oilseeds already occurs both in Australia and in countries that compete with Australia in third markets for meat, egg and dairy products. Consumption of foods produced using stockfeed containing GM material is substantial. Potentially important issues related to the use of GM oilseeds in stockfeed are examined here. These include import regulations in Australia’s major food export markets, domestic and international consumer awareness and acceptance, and the use of GM material in stockfeed by countries competing with Australia in third markets.

GM animal feed

  • Globally, the uptake of GM crops has been rapid since first introduced in 1996, with the area planted to GM crops reaching 114 million hectares in 2007. The key driver for the adoption of GM crops by farmers has been the yield and production-cost advantages GM crops offer. The use of GM crops for the production of stockfeed is unlikely to raise many significant issues for GM crop producers as a number of GM feed ingredients currently in use are secondary products when compared with the primary products of oil and fibre. However, with much of the meal derived after processing GM grain and oilseed crops being consumed as animal feed, the effect of increased uptake of GM crops is expected to be more pronounced in other industries in the supply chain, in particular the stockfeed manufacture and livestock industries.
  • The ability of the stockfeed manufacture and livestock industries to adapt to the increased availability of GM crop ingredients for stockfeed will be an important consideration for making future investment decisions. The issues raised in this report represent opportunities and challenges which need to be considered by these industries.
  • In Australia, domestically sourced GM cottonseed meal and imported GM soybean and canola meal make up a minor but growing proportion of the ingredients used in some stockfeed mixes. In future years, domestically sourced GM canola meal will also form part of stockfeed mixes following recent approvals by state governments in New South Wales and Victoria of commercial growing of GM canola. In addition, following a lifting of the moratorium on GM cotton production in the Ord River irrigation area in November 2008 and announcement of commercial GM canola trials in December 2008, GM cotton and canola may be commercially produced in Western Australia in the future.
  • GM fodder is not used in Australia as GM pastures are not currently in commercial production. However, grazing livestock may consume GM canola stubble in the future. GM varieties of ryegrass and white clover are currently in the research and development phase in Australia. If GM pastures are introduced in the future, it is possible GM fodder use may become more widespread. GM pasture has been used internationally, with the United States producing GM alfalfa between 2005 and 2007. In April 2007, a permanent United States federal court injunction was issued, prohibiting the sale of Roundup Ready® alfalfa seed until an environmental impact statement is prepared.
  • In 2006-07, the major grains and oilseed products used in animal feed in Australia were wheat, barley and sorghum. The reliance on grains, pulses and oilseeds in stockfeed in Australia varies between livestock industries. Grain consumption by weight in the grazing beef cattle and sheep industries is estimated to be less than 10 per cent of total feed, 25 per cent of dairy feed, between 60 and 80 per cent for feedlot sheep and cattle, and virtually all feed consumed in the poultry and pig meat industries.
  • The Gene Technology Regulator and Food Standards Australia New Zealand (FSANZ) are primarily responsible for the regulation of genetically modified organisms and GM food, respectively, in Australia. If required, the Gene Technology Regulator can impose conditions on licensed genetically modified organisms (GMOs) in relation to GM products (such as stockfeed) derived from GMOs. The labelling of animal feed containing GM material and products from animals which have been fed GM stockfeed is not required in Australia.
  • No evidence of import restrictions on meat, egg and dairy products derived from animals fed with stockfeed containing GM material was found in any of Australia’s major livestock product export markets considered in this study. There is also no evidence of regulations in any of Australia’s major export markets for mandatory labelling of products from animals which have been fed GM stockfeed.

Feed production

  • The use of GM material in feed is already occurring in Australia. In total it is estimated 487 200 tonnes of GM oilseeds and meal were used in animal feed in Australia in 2006-07, representing around 5 per cent of the total grain and oilseed products used in animal feed by weight that year. Around 9 per cent, or 20 600 tonnes, of canola meal used in stockfeed in 2006-07 is estimated to have been GM, and 92 per cent of cottonseed and cottonseed meal.
  • The proportion of GM products in animal feed varied across the livestock industries. Stockfeed for the chicken meat and egg industries is estimated to have the highest proportion of GM products by weight, at 14 and 13 per cent, respectively. Feed for sheep for live export does not contain ingredients that could be GM, and GM ingredients are avoided for use in stockfeed for pigs.
  • The Stock Feed Manufacturers Council of Australia has indicated segregation of GM material already occurs on a client needs basis. A system of segregation may need to be developed in the future as the adoption of GM crops increases, dependent on any potential demand for non-GM stockfeed mixes.

Presence of GM in feed

  • GM animal feed is also being used by countries that compete with Australia in third markets for meat, egg and dairy products – Canada, the United States, New Zealand, Denmark and Brazil.
  • Of these countries, Australia is estimated to use the least amount of GM feed in percentage terms, while Canada and the United States use the most. There is no reliable feed usage data for New Zealand.

Feed consumption

  • The Australian pig meat industry and some sections of the chicken meat and dairy industries have indicated they avoid using stockfeed containing GM material because of market acceptance concerns. However, it is important to recognise that almost all imported pig meat consumed in Australia is likely to have been produced using at least some GM stockfeed. Therefore, this concern is likely to be limited to certain niche markets, both domestic and export.
  • It is likely that avoiding the use of GM grains and oilseeds in feed mixes used by these industries will become increasingly difficult and expensive in the longer term, in an environment of increasing uptake of GM crops.

Livestock product consumption

  • There is little information on Australian consumer awareness and acceptance of products from livestock fed with GM stockfeed. The few studies which have been conducted suggest most consumers believe if an animal is fed GM stockfeed, the meat, egg or dairy products from that animal is also genetically modified. However, these studies also indicate that over time, consumers are becoming more willing to purchase products derived from animals which have been fed with GM feed. Nevertheless, some studies show consumers are still slightly less confident in consuming products from animals fed with GM feed than consuming food containing a small amount of GM ingredients.
  • Consumer awareness of the use of GM material in food and feed in Australia’s major livestock and livestock product export markets varies widely. Consumption of meat, egg and dairy products from animals fed with GM stockfeed in these markets is likely to be widespread, with little consumer resistance or use of voluntary labelling to indicate GM feed was not used.

Further Reading

- You can view the full report by clicking here.

January 2009

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