Hive Shortages: Why Soybeans Could Become The Bee's Knees

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Concern over genetically modified organisms (GMOs) in our food supply has caused consumers to boycott stores and demand legislative action in order to eliminate genetically engineered fruits, vegetables, and meats for the purported safety of each meal.  These same consumers who fear genetic engineering seem to have no problem eating down some of the oldest GMOs on our planet: pigs (engineered from wild boars), chicken (engineered from wild poultry), or corn (engineered from ears the size of your finger).  The history of human civilization is the history of genetic engineering through successive generations, turning wild wolves into cuddly corgis and fierce aurochs into docile cattle.  Many of our staple crops rely on genetic engineering in a more subtle fashion, however, since a huge quantity of our crops requires the human-facilitated introduction of bees to agriculture in order to pollinate the plants and breed the next generation.  With the global loss of bee populations, soybean commodities in particular have the potential to grow and grow if none of these fuzzy, buzzy pollinators can keep crop numbers steady.

Colony Collapse Disorder

Sometime during the 1990s, the population of domesticated honeybees began to decline severely.  At first, farmers and scientists paid the trend little attention, since such a mundane insect as bees merited little attention, especially when the cost of buying more queens to build more hives came in at a low price.  As bees became rarer (and honey prices went up), more biologists began to take a closer look at the situation.  Dubbing the phenomenon colony collapse disorder, scientists began to come up with a few frightening statistics.  One in three meals consumed by the seven billion persons on Earth relies on honeybees for the pollination of fruits, vegetables, or livestock feed, representing a quarter of a trillion dollars invested in agriculture.  Millions of hives of honeybees have perished within just the past few years, leaving farmers unable to pollinate crops or facing the prospect of investing huge sums of money to import new honeybee stocks on an annual basis.  With an annual loss of thirty to ninety percent of honeybee stocks, the loss of bees makes for a tremendous blow to agriculture.  Poisons and parasites represent the biggest culprits for colony collapse disorder, both posing a problem without a practical solution anywhere in sight.  The demise of the honeybee should not be understated: Albert Einstein himself claimed that the death of the honeybee would result in the death of the human race given our dependency on these otherwise-annoying, stinging bugs.  Bee hives in the United States alone have declined by 50% in the past two decades.

Bean There, Done That

Soybeans represents far the most important of the crops that bees pollinate on an annual basis.  Cereal crops, like corn and barley, have little to fear from the death of honeybees due to the fact that both require wind for pollination rather than insects.   Soybeans, however, sprout purple flowers that attract honeybees to feast on the ample supply of nectar growing within the flower petals.  With the consumption of nectar comes the accumulation of pollen, which honeybees spread from flower to flower, thus fertilizing plants as they have done for some one hundred million consecutive years.  Genetic engineers have scrambled to develop soybeans capable of self-fertilizing, or plants that fertilize in the wind like cereal crops, yet the best genetic variants of soybeans still produce yields less than half the size of soybeans that rely on honeybees for fertilization.  Research out of Iowa, Canada, Brazil, and Australia all suggest similar results: while some native bee species do better than honeybees, on the whole there's no one single factor that increases crop yields like the gold-and-black honeybee responsible for improving the taste of pancakes the world over.

Supply Shortfall

A slow decline of bees rather than a rapid collapse has kept soybean prices from shooting upwards.  While the past two years have seen significant reduction in the value of soybeans, dropping two hundred dollars per bushel, the past six months have lessened the price decay significantly.  After losing some 30% of the overall value during 2014, soybeans have dipped by less than ten percent this year.  Ample quantity remains the driver of low soybean prices, but ample quantity exists on the back of high quality bee pollinators, a commodity in and of itself that appears increasingly precarious.  Given the low price tag of soybeans, currently trading at five-year lows of $350 per bushel, this represents ample opportunity for investors to buy in while the agricultural value is at a critical low.  Environmental factors over the long term have the awesome potential to eliminate supply.  Whether a soybean shortage due to lack of honeybees happens next year or next decade, investors who decided to add soybeans to their portfolio at the low point will reap the benefits as the most valuable insect allies in the natural world face an uncertain future.

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