Kaylee Hillinger 

Welcome to The Round Barn, a podcast devoted to all things livestock. Our goal is to offer provocative insights, challenge conventional wisdom, and never be boring. Joining me is Dr. Jim Lowe, a large animal veterinarian and a member of the faculty of the College of Vet Med at the University of Illinois. Today I’m going to ask him what he knows about corn instead of pigs and cattle like usual. 

Dr. Jim Lowe 

It’s the stuff you put in the pig. 

Kaylee Hillinger 

Yeah. 

Dr. Jim Lowe 

Okay. 

Kaylee Hillinger 

Yeah. Central Illinois. All the fields. 

Dr. Jim Lowe 

Yeah. So you got a veterinarian talking about something that should be nutrition, which is actually an agronomist. 

Kaylee Hillinger 

And then how it affects the economy of livestock. 

Dr. Jim Lowe 

Fantastic. Sign me up. 

Kaylee Hillinger 

This sounds like right up your alley. 

Dr. Jim Lowe 

Exactly. 

Kaylee Hillinger 

We’re going to give it a whirl. So I want to ask you about genetically engineered corn. Because I was reading that Mexico and we’ve been talking about this for the last year or so, how Mexico is trying to put a ban on imports of genetically engineered corn, and they’re really pushing toward glycol sulfate free corn. And so I’m really curious on what that’s going to have as an impact on our livestock industry. 

Kaylee Hillinger 

So we should probably back up. I just threw a lot of agronomy info out there. Most of it I have very little knowledge of. So talk to me first about genetically engineered corn. 

Dr. Jim Lowe 

Yeah. So in the US- 

Kaylee Hillinger 

He just took his glasses off. It’s getting serious. 

Dr. Jim Lowe 

I think more I didn’t want to fog them up with the steaming. The- so corn today… almost all corn in the United States today is GMO or genetically modified. And that’s a couple of three reasons. One, there’s herbicide resistant. So we’ve got so-called roundup ready or glycosylate resistant corn. And so that’s a gene we inserted so that that doesn’t die from the herbicide. 

Dr. Jim Lowe 

It’s a known resistance. And then there are some other genes that we talk about, triple stacked. So that means we’ve got three genes we’ve edited. And so those gene- other genes are about insect resistance. And so we used to dump a lot of insecticide, primarily organophosphates on seed because they get worms and corn rootworm beetles and earworms, etc.. 

Dr. Jim Lowe 

And so we inserted a bacillus thuringiensis, which is a bacteria insert a bacterial gene into the corn plant that’s actually toxic to corn pests, to insects. And so we did that. We created Roundup Resistance er- inserted roundup resistance. So when we say GMO, they’re not gene deleted. So we’re talking about doing gene deletion. In some things, we take a gene out. 

Dr. Jim Lowe 

In this case, we’re putting genes in and genes from other species. And so that’s genetically modified corn. 

Kaylee Hillinger 

Okay. And so to sum that up, that’s to help prevent insects from coming in and destroying the crop and then also to allow us to use the right weed control without killing the corn. But keep the weeds under control. 

Dr. Jim Lowe 

Right. And so all that is important is we thought about so there were enviro-, so there were, first of all, the yield reasons to do it. But the better thing is there’s also big environmental benefits from that GMO corn. So when I have GM corn, I’ve got the bacillus, the insect resistance. I quit using organophosphates. And organophosphates are toxic to people, to wildlife to everything. 

Dr. Jim Lowe 

So we took that out of the rotation. We basically don’t use organophosphates today. So as a veterinarian, when I was a baby veterinarian, Jesus was not a little boy anymore. But it was close, that’s what the students think. That we still had dogs get poisoned with with Rootworm insecticide like all the time. That was like a routine thing. It was really sweet. 

Dr. Jim Lowe 

The dogs that eat it, the dogs, you know. So you got really good at treating organophosphate toxicity in these dogs and they were never right again. 

Kaylee Hillinger 

Okay. 

Dr. Jim Lowe 

Nobody sees that today because we don’t use them. 

Kaylee Hillinger 

So we don’t need to use them. 

Dr. Jim Lowe 

They don’t use it. So imagine you’re just slopping like it’s like having the pesticide guy come to your house to kill bugs and they’re there every day. And so we’re slopping this stuff around so we could raise corn. So BT Corn got rid of that. So that was kind of the first thing we did. 

Kaylee Hillinger 

And when was that? 

Dr. Jim Lowe 

Oh, now you’re going to test me… sometime in the 2000s. Okay. We’ve had BT corn a long time. Right. And then we insert the roundup ready gene in it. So- it wasn’t roundup ready it was the roundup resistance gene. It was known as Roundup Ready Corn. And that allowed us to spray glyphosate which I can never say. Roundup is the brand name. 

Kaylee Hillinger 

Did I say that wrong? 

Dr. Jim Lowe 

I don’t know how to pronounce it. 

Kaylee Hillinger 

I might’ve 

Dr. Jim Lowe 

I butcher- I can’t speak English. Everybody asks how many languages I speak? I’m like, “apparently zero”. I can’t do any. But so that allowed us to really use minimum till practices so that before when we put on- when we start killing weeds, we put weeds down ahead of time- like herbicide down ahead of time, like atrazine. To control it, we often really had to cultivate quite a bit mechanically cultivate. 

Dr. Jim Lowe 

So it was a high tillage system and by going to Roundup, which you spray over the top like by Roundup at the store, it kills everything. And so after the corn is up, you go spray it with Roundup and it kills weeds. And so I can use much less tillage because I didn’t need mechanical weed control. I also didn’t have to use stuff like atrazine, which again is a compound that hangs out in the environment, etc. So in the short term we had all these benefits that allowed us to do a lot of stuff with yield that put a lot of pressure on yield directly. 

Dr. Jim Lowe 

Roundup Ready doesn’t make the meal more, but it allowed us to do some other things to get to yield. And so GMO corn has been- genetically modified corn- has been a real boon to yields. And so how much food can we produce per acre in the U.S.? And I forget the bend, but I mean, it was if you look at trends in corn yields across time and university publishes this kind of stuff. 

Dr. Jim Lowe 

It was basically flat until the 1930s when we started using hybrid corn, and then it’s on a pretty good slope up and then when we went to genetically modified corn, there’s another slope. This slope- we’re accelerating faster is the point of that. So this idea that we can do GMO and we got much better at modifying crops and growing crops faster, we we’ve really improved yields exponentially compared to what we were doing before. 

Dr. Jim Lowe 

So it’s been a huge boon for corn producers. 

Kaylee Hillinger 

Okay. So it’s benefited the corn producers, the United States. Any idea how much we export to Mexico? 

Dr. Jim Lowe 

I think they’re our largest corn export, but I know what the percentage is. But I think they’re our large corn export market. We ship a lot of corn in Mexico. 

Kaylee Hillinger 

Okay. So as of- they’re saying March 2024, they’re eliminating imports of genetically modified corn. What does that do for us? Sounds pretty bad. 

Dr. Jim Lowe 

So a couple of things. One, almost all the corn in the United States is GMO today. Yeah, almost no one is growing conventional- what would be referred to as conventional corn. So the supply is almost exclusively GMO. The non-GMO corn that’s being produced is basically human food grade stuff. So sweet corn. All sweet corn is done and nobody’s spending money to GM. 

Dr. Jim Lowe 

Sweet corn. But you’ve got sweet corn, then you’ve got white corn that would go into tortillas and stuff- a lot of that is not GMO. 

Kaylee Hillinger 

Okay. 

Dr. Jim Lowe 

And again, it’s a different crop. It’s a different you know, there’s a relatively- 

Kaylee Hillinger 

So we’re talking about Mexico importing corn, not for human consumption, because that’s not the worry with GE corn. We’re talking about for feed for animals. 

Dr. Jim Lowe 

It’s feed. It’s feed consumption. And so there was original discussion. Was it only going to be there, human consumption corn, which we could have dealt with quite easily. And now they come back and said, no, it’s going to be all the corn. And therefore, all the corn would include all this, you know, we call yellow number two, but it’s just regular field corn out there is basically in the U.S. it’s going to be GMO. 

Dr. Jim Lowe 

And if it’s not, it may be co-mingled with GMO corn. And so it’s really hard to keep it separated. Yeah. So I think if you think about that, what’s it going to do? Well for us as livestock producers in the short term, theoretically, it’s great. Theoretically, it should lower the price of corn in the U.S. 

Kaylee Hillinger 

So feed price goes down is what you’re thinking as a livestock producer 

Dr. Jim Lowe 

Yeah you say, well, maybe feed price is going to go down that’d be a win after what we paid for corn. Obviously it’s not really that good for the corn farmer. 

Kaylee Hillinger 

Right. 

Dr. Jim Lowe 

This- that won’t last very long because if we really quit exporting there, they’ll raise less corn, we’ll raise more soybeans. 

Kaylee Hillinger 

It’ll all level out. 

Dr. Jim Lowe 

It all equilibrates right? I think the question is, where is Mexico going to get the corn at? And although Brazil- Brazil is a huge corn exporter, if they would go to Brazil and get- now Brazil raises GMO corn as well, just like we do. And so if… let’s say they decide they’re going to buy all their corn from Brazil and they can get non-GMO there, well, that just means that our corn is going to go somewhere else. 

Dr. Jim Lowe 

And so, I mean, if you kind of think about it in the world, it’s not that we’re going to have let’s say we export 20% of our- 20% of our exports, go to Mexico. It’s not that that 20% or so all of a sudden is going to just be laying in a pile. 

Kaylee Hillinger 

Right. 

Dr. Jim Lowe 

It’s going to get shifted. Now, that has big price implication because it’s macroeconomics, right? It’s oh, wait a minute, trade balances are going to change. So Mexico’s probably going to pay a lot more for that corn. Because they’ve got shipping on it that they- I mean we take it to Mexico on a rail. So it goes on a train to Mexico. 

Dr. Jim Lowe 

Now, a lot of it through Hereford, Texas. So it goes actually from this part of the world, east central Illinois to Hereford, Texas, south into Mexico. And that’s how a lot of it goes. 

Kaylee Hillinger 

And you also just told me, though, that we use this kind of corn, GMO corn, in order to increase yields productivity so we can probably produce corn less expensive. So there Mexico is going to pay more for quote unquote “conventional corn”. 

Dr. Jim Lowe 

Yeah, I would assume they could pay a lot more because it’s conventional because it’s a specialty crop, basically. And then secondly, they’re going to have more transportation on it. And so that also means if we have to export corn from here to somewhere other than Mexico, our customers are going to have more. 

Kaylee Hillinger 

Yeah. 

Dr. Jim Lowe 

Cost on it. 

Kaylee Hillinger 

So do you think that Mexico, that ruling is going to stick? Because I think and the reason I ask is a lot of things go out in the public and say this is a great idea. We want organic. For example, consumers say we want this, we want organic foods. Oh, wait, I have to pay more? Eww. 

Dr. Jim Lowe 

Yeah. It’ll be an interesting question. I think it’ll go into effect because I think the Mexican government is- the US government has gotten on them so hard that I think they’re going to blow up and say we’re not doing it now. Right. 

Kaylee Hillinger 

Just out of principle, yeah. 

Dr. Jim Lowe 

There’s a little macho-ism probably going on that the big brother from the north is not going to tell us what to do basically. And that’s just my guess. I don’t know that, but I mean, you kind of look at things in a way. Okay. We told them they were stupid, basically, and they’re like, no, no, we’re not. 

Dr. Jim Lowe 

Yeah, watch us. Watch us be stupid. I think the question will be what actually happens to the trade flows? It’s really, really hard to replace a major import supplier. I mean, you can say you’re going to do it, but it’s not like they’re taking most of their corn on a boat- or on a boat and offloading it and hauling it. 

Dr. Jim Lowe 

A lot of that corn goes straight on the rail. 

Kaylee Hillinger 

Well, then it sounds like they won’t replace one with one. They’ll have to replace one with several. 

Dr. Jim Lowe 

Yeah, but just the infrastructure bit of I’m going to offload it all off the boats now instead of offloading it off of the rail. 

Kaylee Hillinger 

Mm hmm. 

Dr. Jim Lowe 

It’s two different infrastructures to get grain where grain needs to be. 

Kaylee Hillinger 

Right. 

Dr. Jim Lowe 

So it I think there’ll be some logistical challenges there and they can overcome those, right. That’s just figuring it out. But I think there will be some short term pain. And then I think the question will be, what are they going to do? How long are they willing to tolerate high prices? 

Kaylee Hillinger 

Mm hmm. 

Dr. Jim Lowe 

And who has the political power? So I know Sri Lanka a few years ago decided they were going to use no more- people are poor and starving, had a financial crisis and they decided they were going to use no more chemical fertilizer. Because the government in charge had some deal to buy some organic fertilizer. 

Kaylee Hillinger 

Yeah. 

Dr. Jim Lowe 

You know, so they’re taking bribes or whatever. Right. And that kind of politics, that kind of stuff goes up. Well, that government then got thrown out because they were taking bribes. But I’m not sure that’s what the bribe was for. But but they made that in- that lasted until people were really hungry and gonna riot. And we decided that maybe we could just use regular fertilizer again and so that- this won’t be that bad because they can get corn. 

Dr. Jim Lowe 

But if you start driving inflation for the poorest people in the country, which is the most severe right at the bottom of the income ladder, always takes inflation the worst. If you drive inflation there. What does that do to political base, considering that’s the group that really supports the government? And so it’ll be an interesting view to how long they stick to it. 

Dr. Jim Lowe 

I think they’ll do it. I also think that they will take in oodles and oodles and oodles and oodles of corn from our fall crop this year and plie it up. So if it ends in March, I’m guessing we’re going to ship a lot of corn in February. 

Kaylee Hillinger 

Yeah. 

Dr. Jim Lowe 

And then they’ll figure out what they’re going to have happen. And I think it’ll be an interesting political battle to see who’s- 

00;13;27;12 – 00;13;37;15 

Kaylee Hillinger 

Yeah, more along like this summer and fall of 2024 to see how that inventory that they stockpiled up and then who their new supplier might be. 

Dr. Jim Lowe 

Yeah and can they find a supplier, and how much political clout do the livestock producers have to put pressure back on? The livestock industry’s quite vibrant in Mexico. 

Kaylee Hillinger 

Yeah. And so then the economics playing out of higher feed costs for them, how that drives their profitability. Yeah. 

Dr. Jim Lowe 

What does it do to- what does it do to meat price? What does that do? Yeah, they raise a lot of pigs and chickens in Mexico and they have a lot of cattle. Some of those cattle come north to be fed, but they feed a lot of cattle in Mexico. 

Kaylee Hillinger 

And then are consumers willing to pay for that cost of increased production? Yeah. Let’s take it back to the US livestock producers. So short term, crystal ball. 

Dr. Jim Lowe 

Short term there’ll be some serious basis disruptions and so basis is the difference in local price compared to the Chicago Mercantile Exchange price. 

Kaylee Hillinger 

Okay. 

Dr. Jim Lowe 

And so those things normally basis the local price relative to the board price of the financially traded price is pretty stable given a time of year and you know, you get short term, but it’s a relatively predictable thing that people understand. And then you get goofy times when you get really basis disruption. So in the case of buying at the basis, might get wide. 

Dr. Jim Lowe 

It’s a lot over the market. So if we look at southwest Kansas this year, they had a drought, they didn’t have enough corn. If they were normally a dollar over Chicago, they were all of a sudden $2 or two and a half dollars over Chicago because they didn’t have the corn. There’s local demand and so people. Right and so I think we’ll see those basis disruptions happen because if we export a ton of corn from East central Illinois to Mexico and they don’t do that. 

Dr. Jim Lowe 

We got to send it to the Gulf. Do we have enough trains to get to the Gulf for…? There will be some short term implications. I think the implications will be bigger on the crop farmer than livestock. We may see on the livestock side a short term bump here and there. 

Kaylee Hillinger 

Nothing to lose sleep over. 

Dr. Jim Lowe 

Yeah, I don’t think it’s a- I don’t think it’s a huge opportunity for livestock. I don’t think it’s going to be a huge, huge deal. I think the market will equilabrate fairly quickly on on the corn but I think the bigger thing to me is it says we also sell a lot of pork to Mexico and we bring a lot of steers north from Mexico to feed. 

Dr. Jim Lowe 

There’s a lot of Texas, a lot of Mexican cattle fed in Texas and southwest Kansas in there. Yeah, and they’re the biggest buyer of hams. And so if you look at that, okay, we said we aren’t going to do GMO corn and we had this I guess it’s not NAFTA anymore, but it’s U.S., Canadian, Mexico, whatever they call that trade agreement. 

Dr. Jim Lowe 

Okay. But it’s the old NAFTA. We’ve had this really good trading block program where we could move stuff back and forth. And it kind of functions as one market and it’s low barriers. It’s worked really, really well. Been good for all three countries. So this is clearly not part of NAFTA. This is not the whatever they call the new thing. The new NAFTA. 

Dr. Jim Lowe 

This is clearly outside the game. Not acceptable. 

Kaylee Hillinger 

Right. 

Dr. Jim Lowe 

And so what’s the next thing? Right. I start to look at it and say, oh, okay, this probably isn’t that big a deal. But if they “get away” with this. 

Kaylee Hillinger 

Yeah. So are they going to take imports of protein fed by genetically engineered corn? 

Dr. Jim Lowe 

Those are all the questions you start to ask, right? They’re saying, oh, well, it’s not safe here. We’re not going to take that. 

Kaylee Hillinger 

Yeah. 

Dr. Jim Lowe 

And is that their response to reducing pressure? Because if you think about this, if I’m a Mexican producer- hog producer and I’m making pork and all of a sudden my cost to corn is 40% or 50% more than my US colleagues. The US will be able to export corn in there or export meat in there. At a huge advantage. 

Kaylee Hillinger 

Right. 

Dr. Jim Lowe 

And so yeah, what’s what’s the next shoe? Right. Like this shoe isn’t that- But what’s the next shoe that’s going to drop? Yeah, we don’t know. But I think that’s the interesting part to me. It’s the stay tuned because once we break the rules, once it’s what’s the next rule breaking? 

Kaylee Hillinger 

Right. So now I’m more worried about not what happens in the short term for our producers in the United States and their feed costs but all of the actual production. 

Dr. Jim Lowe 

I think it’s disrupting. And, you know, we get this going on everywhere. You know, China is a huge concern. What all of these were so interdependent from an international trade standpoint today. If we start breaking the rules and are breaking the rules right and left, how do we have any predictability of international trade and… 

Kaylee Hillinger 

Right. 

Dr. Jim Lowe 

That’s that’s all hard. 

Kaylee Hillinger 

Stay tuned. 

Dr. Jim Lowe 

Stay tuned. 

Kaylee Hillinger 

All right. Thanks, Jim. Appreciate your input. Thanks for joining us. Please subscribe and tell your friends about the Round Barn. It’s available on iTunes or the podcatcher of your choice. In addition to this podcast, we offer a wide range of online learning opportunities for livestock producers and veterinarians, including a master of veterinary science degree. You can learn more about these things by following The Round Barn at Illinois, on LinkedIn or by visiting online.vetmed.illinois.edu . 

Kaylee Hillinger 

Thanks for listening.