MAG Introduces Syngenta Enogen® Corn To ND Producers
Both Blue Flint Ethanol and Dakota Spirit AgEnergy facilities will be incorporating Syngenta’s Enogen® corn hybrid into our process beginning with the 2017 corn harvest.
Our first season will be a “trial” for both growers and Midwest AgEnergy Group (MAG). Syngenta is limiting the amount of seed with the Enogen® trait to ensure that growers get the right agronomic match from their available hybrid inventories. They will have sufficient hybrid supplies next year to supply us year ‘round.
Most people are aware that we will pay a 40¢/bushel premium for our growers to produce, store and deliver Enogen® on schedule. We are paying the premium for the alpha amylase enzyme this corn contains. Today, we buy this ingredient from our chemical suppliers to add to our fermentation process. In the future we will be buying that enzyme from our corn suppliers in their Enogen® corn. We think this is a win-win proposition for those customers who are willing to invest in the stewardship of Enogen® corn.
Here are some general items we will be addressing in detail later this spring/summer.
We will enter a 3-way production agreement with Syngenta, Producers and MAG. Syngenta will license their technology and set out stewardship requirements in their grower agreement. MAG will make a marketing agreement with the Producer to purchase all production from the identified fields and pay the Enogen® premium for all corn delivered that meets purity standards.
Marketing may be the easiest part to understand. For the first year, we will divide each producer’s production into thirds and schedule it for delivery in Jan ‘18, Feb ‘18 and Mar ‘18. Producers may sell corn in those periods as they usually do. They may forward contract or sell spot or use any other contract type as they normally do. When Enogen® corn is delivered against those contracts, we will simply add the Enogen® premium to the load settlement. When growers make a corn sale, it is not specifically for Enogen® corn. If your Enogen® production is below expectations, you will still have an obligation to deliver corn. If your Enogen® production is above expectations you may need to sell additional corn bushels to accommodate the higher production.
Syngenta has been inspecting growers’ facilities and approving storage and drying facilities before approving the grower contract. We need this enzyme to be in steady supply during the year. That means you will need to hold grain beyond harvest for delivery on schedule. This first year will be less complicated than the following year, when we will be relying on Enogen® for the entire year. As we previously mentioned, the first year will schedule even deliveries January through March. We will use our storage space to optimize Enogen® deliveries over difficult periods.
We will be developing a delivery premium schedule for the 2018-19 crop season by this summer. It is likely we will provide higher Enogen® incentives for storing and delivering in later periods. The average of incentives will be 40¢/bushel over the crop year if we implement different monthly premiums. We will be scheduling delivery for Enogen® corn each month. Our operations team will contact growers and set up reserved times to deliver Enogen® corn. During “Enogen® hours” we will not be receiving regular corn, to minimize the potential for contamination. We will be as flexible as possible in swapping delivery commitments when conflicts arise. However, we can’t promise that we will always be able to accommodate a change in the schedule. Each truckload delivered will be tested for Enogen® purity. If it passes the test, we pay the premium. If it fails the test it will be received as regular corn and applied to contract with no premium. Other grade factors will apply as usual.
We will be announcing meetings for BFE and DSA Enogen® growers. We are targeting late spring after crops are planted to hold grower meetings where we can discuss details of storing, marketing and delivering 2017 crop Enogen® corn. We will send notice and follow up to ensure everyone has a chance to attend. If you are enrolled to grow Enogen® and have questions please call. We are still developing policies and procedures and welcome your input.
Written by Phil Coffin
VP and Chief Marketing Officer with Midwest AgEnergy Group