rBST adoption in the United States: that was the juggernaut… that wasn't - recombinant bovine somatotropin

Choices: The Magazine of Food, Farm and Resource Issues, Summer, 2002 by Bradford L. Barham, Jeremy Foltz

When rBST first came to market, both advocates and opponents of the technology thought it would be a juggernaut that would completely remake the American dairy industry. Ten years later, it looks like just another tool.

Ten years ago, Monsanto announced its intent to market recombinant bovine somatotropin (rBST), a genetically engineered hormone that stimulates treated cows to produce more milk. A political firefight immediately erupted. The Food and Drug Administration was enmeshed in a review process that took several years and produced more documentation than any agricultural technology before or after. Congress considered legislation that would ban or restrict rBST's release, and eventually did vote to delay rBST's commercial release by half a year until the executive branch provided a comprehensive assessment of the technology (U.S. Government).

State legislatures around the country debated labeling laws that would require milk products to identify whether they came from cows treated with rBST. Vermont, Wisconsin, and Maine actually passed legislation, though compliance with Wisconsin's law was strictly voluntary. Elsewhere (California, for example), some state agencies tacitly encouraged bottlers and processors to identify products as coming from cows not treated with rBST.

The rBST controversy was arguably the most intense public debate that has ever occurred in the United States about an emerging agricultural technology. Although the battle was bigger than it might have been if it had emerged after some of the genetically modified crops that were also under development, the opposition was broad and deep in its commitment to block the commercial release of rBST.

The breadth came from coalitions that formed at various levels among farmers (especially from populist farm organizations and certain regions of the country), environmental and consumer organizations, and animal welfare activists. The depth came from the intensity of opposition to this "juggernaut" technology and its anticipated effects on family farms, consumers, the environment, and animal health. And, a large proportion of the debate hinged on what would happen to family farms if rBST were introduced. Ironically -- and in the interest of full disclosure -- even the very academic positions the authors of this paper hold are a product of that era. The Wisconsin state legislature created an institute at the University of Wisconsin to address the implications of rBST and other emerging technologies on family farms.

The Beef Over rBST

At the core of the debate was the view held by both proponents and opponents that rBST would be very widely adopted, especially by larger dairy farms. The technology promised high per-cow productivity gains -20 percent or more for treated cows. Opponents then argued that the ensuing expansion of milk production, especially in a broader context of declining federal milk price support programs, would result in disastrous declines in dairy prices and hence ruinous competition for dairy farmers, increased surpluses of cheese and butter, and unnecessarily large government payments. Small and moderate-sized family farms were thought likely to be the hardest hit, because they would be less likely to adopt rBST and they would be more vulnerable to falling prices.

Underlying this dismal picture were several assumptions: high rBST adoption rates, major increases in milk productivity, and a size-biased technology adoption process. A few analysts at the time, such as Larson and Kuchler (1990), warned that rBST adoption could be much less profitable than anticipated. However, opponents and proponents, including Monsanto, each had their reasons for sustaining the juggernaut idea: the former to strengthen their dire forecasts, the latter to boost early sales and rapid adoption of the product. Thus, the debate rarely engaged the possibility that rBST might nor be much more than a minor addition to the technology options available to dairy farmers. Now, ten years later, that is essentially what the research finds.

One often overlooked aspect of the rBST controversy is that it has served effectively as a huge barrier to entry for all potential competitors to Monsanto. Indeed, in the 1980s, Monsanto, Eli-Lilly, Upjohn, and American Cynamid were each working on some form of rBST for the market. Deterred by the tremendous costs that Monsanto incurred to secure FDA approval, no other competitor has attempted to enter. Thus Monsanto's Posilac[TM] is still the only form of rBST on the market.

Not the Juggernaut

Eight years after the release of Posilac it is clear that rBST has fallen well short of being a juggernaut technology. According to Monsanto, rBST currently is used on about 15-17 percent of the nation's dairy farms. However, this point must be placed in the proper context. Farm-level numbers A understate the actual use of rBST, because they do nor account for the size of farms where rBST is adopted.

Figure 1 uses data obtained from Monsanto to show rBST's adoption path in terms of the percent of the cows nationally that are on farms where rBST is being used. The initial figure in 1994 was 14 percent, which doubled by 1997 to 29 percent. Over the next five years, rBST adoption growth slowed considerably so that in 2001, 35 percent of the nation's cows were on farms using rBST.