January 10, 2006 - Renessen is a 50/50 joint venture between Cargill and Monsanto. Between them, both parents have invested almost US$450mln in the enterprise, whose principal objective is to engineer and market quality nutritional traits for feeding animals.

Mavera ™ High Value Corn is Renessen’s brand of nutritionally enhanced, conventionally bred corn. The strand originated in Argentina, where it is grown today, and is already on the market.

More developments are down the line for what Renessen R&D Regulatory Science Lead Doctor David Russell describes as a ‘multiple feature product’. Renessen recently announced that it is to introduce a variety of Mavera corn containing extra lysine, initially around one thousand parts per million.

It’s a two-stage approach - Renessen says it is also developing a second generation Mavera-with-lysine corn trait that could contain an ‘entire dose’ of the amino acid.

The company expects to commercialise the first generation product in the next two to three years. At present, the Mavera High-Value Corn with Lysine is in regulatory review ‘in a number of countries’, Russell told Feedinfo News Service in an interview.

‘It will have the higher energy that the high-value corn already has, as well as somewhat higher protein.  Then, there is the additional lysine content.’

The added-lysine strand will be grown in Argentina and the USA and, the company hopes, one day in Brazil. The corn grown in those countries will be sold domestically and exported, Renessen says. ‘Most of the customers we already have are using GM’, reminds John Fulcher, Commercial Manager at the company.

"Feed is around 60% of animal production costs, so any savings can be considerable. Added lysine is part of a combination that really brings feed cost savings"      - David Russell       Renessen

‘They’ve already answered the "Biotech Question", (editor’s note: the question as to whether they consider engineered crops as financially viable and ethically acceptable) so developments such as the added lysine bring them more benefit. A good number of animal feeders have been working with GM grain for up to ten years’, he told Feedinfo News Service.

One could look on the Mavera-with-lysine as a natural progression from Roundup, then. This argument may serve to placate opponents of GM crops who are likely to lobby the livestock breeding industry not to include Renessen’s product in animal diets.

Playing the Long Game

John Fulcher says now is the time that Renessen will begin seeing the benefit of having Monsanto and Cargill behind it. ‘They have significant resources already in place for us to quickly take advantage of, once our pipeline hits the market.’

Are Renessen’s parents eager to see a return on that US$450m investment? The company recently turned in a large loss and laid off one third of its workforce– but argues it is playing a long game.

For its part, Monsanto understands that technology such as Renessen’s requires many years and significant resources before commercial success is realised, spokesperson Ben Kampelman told Feedinfo News Service.

‘Both Cargill and Monsanto are dedicated to that success – Mavera-with-extra-lysine will deliver benefits to the feed industry.’

‘This is our first biotech product’, agrees John Fulcher. ‘It’s the beginning of our pipeline.’

Renessen sees the Mavera High-Value Corn with Lysine ‘building off our current products. Over the next five to ten years, you’ll really see the full breadth of our portfolio come to market.’

"Both Cargill and Monsanto are dedicated to the  success of this product – Mavera with extra lysine will deliver benefits to the feed industry."     - Ben Kampelman,       Monsanto

That’s in Argentina, the United States and possibly Brazil, later. ‘The market is quite large already’, Fulcher continues. ‘Three quarters of all the corn goes to livestock production. With the Mavera product in Argentina, we’ve already seen that livestock producers are quick to see its value, and have adopted it to their operations.’ ‘Demand for our product in that country has outstripped current production.’

Feed Cost Saving?

Renessen expects that the added-lysine corn will ‘feed well’ into that dynamic, although Fulcher says it is difficult to put a figure on the potential market.

‘But, in poultry and livestock integrated operations around the world, there is interest in this type of product, in fitting it into rations one way or another. Animal producers will save on feed costs, with the use of an identity-preserved grain, as opposed to a commodity grain, in the different rations.’

The company realises that the market for cereal hybrids is very competitive, but believes the pedigree of the high-lysine corn and its agronomic traits position it favourably.

Feedinfo News Service asked Renessen how the introduction of high-lysine corn will play in the landscape of the animal feed industry.

The company says its near-term technical goals for the project are designed to maximise its potential: ensuring the lysine trait is the best germplasm possible, and ensuring the strand has the best oil content per kernel.

Honing that germplasm, crucial to establishing the durability of the strand, will rely on Monsanto’s breeding expertise. Getting it right is the key to convincing cereal growers to adopt the Mavera-with-lysine variety.

‘For growers, Mavera represents an opportunity to participate in a value-added crop’, says John Fulcher. ‘They have more choice and, ultimately, more revenue per hectare.’

He continues: ‘The agronomics of the material we are developing for the first introduction are comparable to competitor strands. The Mavera added-lysine strand will come to market with the latest agronomic traits that are available, such as Roundup resistance, herbicide resistance, and insect protection.’

What’s in it for the livestock producer?

There are any number of competing ingredients in animal diets, David Russell points out, dependent on a number factors including what lifecycle stage the animal is in.

‘Around 60% of animal production costs are tied up in feed, so any savings can be considerable. Especially when you are looking at a multi-faceted product such as higher-energy corn. Added lysine is part of a combination that really brings feed cost savings.’

‘Some of our customers find that it is very beneficial; but it’s not easy to put a figure on that benefit as it varies wildly from ration to ration.’

‘There are no added energy requirements in producing Mavera High-Value Corn with lysine’, Fulcher adds.

The amount of lysine added is a small percentage of the total amount of energy plants use to produce grains.

‘We’re already shipping the grain, so there’s no added cost of shipping the lysine.’

How would cereal farmers who agree to grow the Mavera-with-lysine strand ensure that cross-contamination with commodity corn would not occur?

Russell: ‘The system we have put in place with growers and end users is effective in keeping the grain together.’

‘Renessen looks at our growers as participants in this project, and we will be value sharing with them.

It’s important for us to get that grain from the farmer through the logistics chain, and we’ve been able to do that very effectively. We’ve been delivering the Mavera grain to at least eight different countries around the world.’

Ration Composition Means EU ‘Not a Priority’

Doctor Russell says that the company’s priority is to gain approval for the corn in the origination countries - the US and Argentina – as well as all key export destinations.

‘In regulatory terms, we are very far along in the US. The FDA has already looked at the added-lysine Mavera corn, and has indicated that they have no concerns. We’ve finished the USDA sixty-day comment period.’

‘We’re also in the process of applying for Mavera added-lysine approval in the European Union and Japan, as well as other markets.’

Will there be a time when Renessen decides to trial and grow Mavera within the EU? Russell: ‘We haven’t made that decision. Livestock breeders who use corn or soy-based rations make up the market for this product. The EU is primarily wheat and barley, so for now it’s not among our top targeted geographies.’

"Our products will be used in some rations; there will be lots of rations where it just isn’t practical to include corn with high lysine. It’s a large market."      - John Fulcher,       Renessen

Happy to Coexist

Amid various press reports claiming that Renessen would like to see the high-lysine corn planted on four million acres in the US and Argentina, plus one million acres in Brazil, it’s not difficult to imagine that manufacturers of synthetic feed-grade lysine would frown upon developments such as Mavera. What is the company’s view?

‘The market for lysine as a synthetic additive in rations is big, worth around US$1 billion yearly. We continue to see growing demand for lysine around the world’, says John Fulcher. ‘Renessen expects Mavera-with-lysine to be a portion of that growth. The market is big enough, and there is enough growth, for there to be enough room for everybody.’

‘With Mavera in its present form, ie, not yet containing the added lysine, there’s no direct threat to the additive manufacturers, so we’ve yet to see any opposition to it. Time will tell.’

But if Renessen is successful in developing the second-generation Mavera product that could contain an entire ration of lysine, could that over time make synthetic use redundant?

Fulcher summarises: ‘Our products will be used in some rations; there will be lots of rations where it just isn’t practical to include corn with high lysine. Again, it’s a large market.’

Whether feed additive producers will share that view remains to be seen.