The Dynamics of Biotechnology in the Soybean Marketplace

Abstract

The goal of this paper is to explore market system dynamics associated with recent and potential future adoption of biotechnology in the soybean marketplace. The rapid and dramatic adoption of herbicide-tolerant varieties has had a major production impact in the United States, Argentina, and Brazil. Economic benefits from that adoption accrued to adopting and nonadopting producers as well as to firms providing the technology. Firms providing substitute weed control systems suffered economic losses. To this point, biotechnology s effects have been limited to agronomic characteristics. Future innovations may provide enhancements to the output traits of soybeans. However, for those benefits to be captured in the marketplace, substantial changes in the existing commodity market channel are likely. Market channel alternatives and the dynamics of that market system change are examined in this article.