2010-11 Annual Update / Final Report
Client report summary:
Key:
PROJ-14033-NEG-AGR C10X0815-CR-2
Project:
Exploi�ng Opprotuni�es from Forage Plant Genomics
Contract ID:
C10X0815
Investment process: NEG 2006 Nego�ated
Organisa�on:
AGR AgResearch Limited
IMS assigned to:
s9(2)(a)
Repor�ng period:
01/07/2010 to 30/06/2011
Contract total value: $11,732,667.05
Annual Update 2010/11.
Outcome Benefits to New Zealand.
New Zealand faces a number of major environmental issues with the intensifica�on of pastoral farming. For example,
in the dairy sector due to the increased stocking rate and average cow live weight there has been a 57% increase in
live weight over the last 30 years (1989-2010) – Dairy NZ, McDonald and Clark. The rate limi�ng step in our produc�vity
is the feed supply and our pastoral grazing system is also the cause of a number of the environmental issues (GHG
emissions and N leaching). Despite recent advances (
e.g., “high sugar” grasses and novel endophytes) we require
mul�ple step changes in our forages to address these chal enges as a substan�al shi� toward cut and carry feed based
systems is uneconomic.
Our approach is to increase the quality of our forages by increasing the metabolisable energy (ME) and improving the
rate of diges�on. These targets cannot be achieved by plant breeding alone (even with marker assisted selec�on) so
we have three targets: increased lipids; increased water-soluble carbohydrates; and an improved rate of cell wall
diges�on (these targets use biotechnology to assist breeding or involve gene�c modifica�on of perennial ryegrass or
the ryegrass endophyte). We also have a programme focused on developing an improved endophyte that beter
protects the ryegrass crown and root system.
This programme is closely linked with the seed industry and builds on the research on the conven�onal y developed
AR1 and AR37 commercial endophytes to apply biotechnology to provide increased knowledge and new op�ons for
endophyte development.
The most advanced area focused on ME is a GM technology termed DGAT1/Cysteine Oleosin that wil increase the ME
of forages by doubling lipid levels in vegeta�ve �ssue and poten�ally the available biomass by 25%. This technology
has been implemented in perennial ryegrass (this contract), alfalfa and white clover (by PhytaGro Corp). Modelled
benefits of a GM high ME perennial ryegrass include for the dairy industry:
• 6%-12% increase in Milk Solids produc�on.
• 17% decrease in farm GHG emissions.
• $900 per ha increase in farm revenue leading to poten�al market benefit of up to $2B p.a. With a market
adop�on of 20% the poten�al benefit to the pastoral industries could be around $400M p.a.
We have also made progress with the development of forages with consistent levels of water-soluble
carbohydrate (WSC). Last year we were able to dissect the strong Gene × Environment and Gene × Management
regula�on of fructan WSC in conven�onally bred “high sugar” ryegrass varie�es. This year Pastoral Genomics has co-
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funded further development and we have produced GM ryegrass plants with increased levels of fructan WSC where
the fructan levels obtained were as high as the best conven�onally bred “high sugar” varie�es. The major difference
was that WSC levels were unaffected by the Gene × Environment and Gene × Management regula�on seen in the
conven�onal y bred lines. We have u�lised the funding in this contract to cross these GM traits into a high sugar
(high WSC) ryegrass genotype to determine the maximal levels of WSC that can be obtained.
Work on improving the rate of cell wal diges�on is split into several funding streams and this contract supports those
areas. We have expressed cellulases in model plants and the ryegrass endophyte. If these approached lead to
applica�ons in ryegrass that increase the rate of cell wall diges�on in the animal this would have major environmental
and produc�on benefits for farmers.
Ryegrass containing an endophyte expressing significant levels of the bioac�ve lolines would benefit farmers through
increased pasture persistence due to the demonstrated protec�ve effects of lolines on the plant crown and root
system. This would result in decreased insec�cidal use and increased dry mater produc�on especial y in dry condi�ons
(pasture with damaged root systems performs poorly when soil moisture levels drop). When endophytes from tal
fescue (that normally produce high levels of loline) are transferred to perennial ryegrass the loline levels are only 1-
10% of that seen in tal fescue (and insufficient for plant protec�on). We have iden�fied the gene�c switch that causes
this effect and produced experimental lines of GM endophyte where levels in perennial ryegrass are equivalent or
greater than that seen in tal fescue.
A number of challenges face the commercialisa�on of GM crops in NZ including but not limited to the cost
(approximately $20M for breeding, animal feeding trials and regulatory costs), the current challenging GM legisla�on
under the HSNO act, containment and a concern by the pastoral industries for possible nega�ve impacts on their
markets. All these factors contribute to the issue of demonstra�ng that the high ME forages wil have the expected
nutri�onal benefits and subsequent increase in produc�vity and environmental benefits. We have developed a
strategy in consulta�on with the NZ pastoral industries that includes overseas field trials and this is outlined in the next
sec�on on the implementa�on pathway.
Implementation Pathway.
AgResearch has well established rela�onships with all seed companies and has commercial rela�onships with a number
of them. Grasslanz Technology Ltd, an AgResearch subsidiary, is a plant technology provider to farmers (end-users).
Grasslanz is the world’s premier source of grass endophytes and white clover, and a world leader in the development
of temperate forage cul�vars. Grasslanz works closely through the en�re cul�var development process with its seed
company partners. Grasslands Innova�on, which is an incorporated joint venture between Grasslanz and PGG
Wrightson Seeds (PGGWS) creates an exclusive pathway to market for perennial ryegrass cul�vars. AgResearch
underpins Grasslanz compe��ve advantage through exclusive access to conven�onal plant breeding, plant genomics,
microbial genomics and a strong base of fundamental and applied plant and animal sciences. The subsidiary’s main
func�ons are to licence the use of AgResearch’s seed products to seed companies, fund and manage R&D, produce
nucleus seed and protect intellectual property.
Ini�al outputs from this contract can be in the form of molecular markers for complex plant gene�c traits such as the
water-soluble carbohydrate compounds the fructans. The knowledge is applied by the Markers 2 Market programme
(AgResearch, Pastoral Genomics and the seed industry). This programme will ensure that the marker assisted selec�on
technology we have developed over the last decade can help make posi�ve improvements to complex forage traits
and assist the breeders and seed companies to deliver improved cul�vars.
The endophytes currently under development in this programme include both conven�onal strains selected for specific
atributes and GM strains to improve plant biocontrol (increased lolines) and an improved rate of plant cell wall
diges�on. Conven�onal endophytes will be commercialised following the established route via Grasslanz Technology.
GM endophytes face similar issues to GM forages and a similar strategy to that outlined next for GM forages could be
used.
Longer term outputs poten�ally include gene�cally modified forages. We have made significant progress with one
trait, high metabolisable energy (ME). As the technical aspects of this programme have progressed we have consulted
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with the pastoral industries over the issues NZ faces with GM forages. The pastoral industries have not ruled out GM
forages but expressed a desire that ini�al field trials be performed overseas. For the �me being there is a desire for
NZ to be a market follower rather than a market leader. As the �melines for delivery of GM seed to the farmer are
lengthy (and costly), expected to be in 2021 we do not see this requirement as a barrier but rather an opportunity to
share the risk with a larger AgBio player. Our strategy has therefore been to include high ME forages as a package in
our two spin out companies AgResearch jointly owns with the San Diego based incuba�on firm Kapyon Ventures LLC.
Through the Kapyon-AgResearch partnership, the par�es have formed two commercial spinouts - PhytaGro Corp
(forages and bio-fuel crops) and ZeaKal, Inc (major row crops).
The spinouts are currently commercializing a novel plant yield pla�orm with a specific focus on raising lipid content in
both seed and vegeta�ve �ssue. The underlying por�olio has been shown to not only increase the oil yield/quality of
tradi�onal oil seed crops, but also extend seed-like oil produc�on mechanisms into the vegeta�ve �ssue of second-
genera�on feed and fuel crops that currently have low energy density. Both companies are being prepared for sale.
Al the AgResearch IP in both PhytaGro and ZeaKal is licensed in and so will remain owned by AgResearch even a�er
the two companies are sold. Forage species of importance to NZ will be included in the licenses that will be sold to a
purchaser. In order to ensure that NZ farmers are not prevented from accessing these technologies in the future we
wil ensure that:
• The licenses exclude NZ, ensuring that AgResearch wil always be free to develop the product for NZ;
• Any purchaser acquiring the Intel ectual Property rights must develop the technology in the licensed forage
species within a specified �me frame or lose the right to do so;
• In the event that a purchaser does develop a new cul�var in a species important to NZ, they will make all
endeavours to make the technology available in NZ.
As we progress with this strategy the companies wil be offered for sale to NZ seed companies and regardless of the
outcome we are working with both PGGWS and Agriseeds on a NZ focussed breeding strategy to ensure that when
al owed, a high ME GM forage suitable for the NZ market wil be available (es�mated to be 2021).
Research, Science and Technology (RS&T) Benefits to New Zealand.
This programme has delivered the fol owing benefits in the last 12 months:
• Increased knowledge of forage grass endophyte chemistry and gene�cs and genomics;
• Iden�fica�on of the regula�on of loline biosynthesis in endophytes and demonstra�on the endophytes can
deliver valuable recombinant proteins;
• Increased understanding of lipid biosynthesis in plants with 3 patent applica�ons or PCT filings forming the
cornerstone technology por�olio of spin out biotechnology companies PhytaGro Corp and ZeaKal, Inc;
• Improved understanding of WSC produc�on in forage grasses and approached to improve WSC levels in marker
assisted breeding programmes;
• Development of the metabolomics capability for analysis of GM plants expressing output traits, and for analysis
of plant cell wall polymers;
• Iden�fica�on of plant cell wall degrading enzymes suitable for improving the rate of forage cell wall diges�on
and the opportunity to further u�lise these in the produc�on of cellulosic biofuels.
Publicly available informa�on
New Zealand depends on agriculture for a substan�al propor�on of its income. In 2007, agricultural exports
represented 48% of al export products. The pastoral sector exports alone were valued at $16B in 2007. This high
dependence on agriculture wil certainly con�nue wel into the future as the world’s burgeoning middle-class
increasingly demands those high-quality food, fibre and health-related products that New Zealand is ideal y placed to
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deliver. The feed supply for New Zealand’s agricultural animals is the biggest constraint to animal produc�on. This is
highlighted in the Strategic Frameworks of both the dairy and meat & wool industries.
We have ini�ated a new programme that fol ows from the successful 6-year contract C10X0203. This programme wil
build on the progress or the plant genomics pla�orm and deliver new forage cul�vars and endophyte strains for the
pastoral industries. The objec�ves within our programme are specifical y intended to address the feed constraint
equal y valid for the meat and dairy industries. These targets wil not only have produc�on benefits but wil also have
significant environmental benefits.
We wil develop perennial ryegrass with consistently elevated levels of water-soluble carbohydrate (WSC).
Increasing the WSC content would provide the rumen microflora with a readily available energy source and reduce
their fermenta�on of protein, which results in increased nitrogen supply to the ruminant and reduced nitrogen losses
through excre�on.
We will also increase the metabolisable energy of perennial ryegrass by up to 10% by developing lines that contain
elevated levels of protected leaf triglycerides.
We also intend to increase the rate of fibre diges�on by modifying the linkage of cell wall polysaccharides to lignin and
other wal polymers. Increasing the rate of fibre diges�on would not only provide more energy but also reduce the
�me required to pass through the rumen and therefore reduce nitrogen losses.
Endophytes for the Future Farm focuses on developing the next genera�on pasture endophyte to target insect pests
above and below ground that are not affected by the AR1 endophyte (a commercial strain released in 2001). This wil
improve pasture produc�vity and resilience by both reducing insect preda�on and improving plant access to water and
nutrients through healthier root systems.
This year we have made significant progress towards these objec�ves with the main highlights being:
Objec�ve 1:
We are using biotechnology to understand how ryegrass makes the water-soluble carbohydrate fructan. To do this,
experimental gene�cally modified (GM) ryegrass lines containing laminar (leaf) fructans at levels greater than the
conven�onal y bred high sugar grasses have been developed.
This modifica�on overcomes the strong gene x environment control of fructan levels normally seen in ryegrass that
results in sub-op�mal levels unless the plants experience a prolonged cold period. This project is now aligned with the
Pastoral Genomics Consor�um. We have crossed this trait into conven�onal high sugar lines to determine the maximal
level of water-soluble carbohydrate that can be obtained. We are also u�lising the knowledge gained in a marker
assisted breeding programme to develop a conven�onal ryegrass variety with more reliable levels of water-soluble
carbohydrate that what is currently available.
Objec�ve 2:
We have demonstrated that is possible to double leaf triacylglyceride lipids in a model plant by encapsula�ng the
addi�onal lipids with a novel oleosin protein. This has been implemented in alfalfa, white clover, and perennial
ryegrass. The ryegrass lines will contain 10% greater metabolisable energy.
Model ing has shown that a farm using this ryegrass would not only have increased produc�vity but also significant
environmental benefits due to a 17% reduc�on in greenhouse gas emissions. This is a result of the increased quality
of the animal feed. Currently there are no forage plant species that could deliver these benefits so a GM ryegrass like
this would provide new op�ons for farmers in New Zealand when it was eventual y available.
We have formed two spin out companies, PhytaGro Corp and ZeaKal Inc to commercialise the novel oleosin technology
in biofuel crops, forages, and major row crops in interna�onal markets.
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Objec�ves 4 and 5:
We have developed a 4 in 1 molecular assay to test endophyte viability in commercial seed. This will offer a cheaper
and faster op�on for industry than the current immunological test. The new system is currently being beta-tested. We
have also successfully increased the level of lolines in experimental strains of endophyte in perennial ryegrass. This is
a major breakthrough as we have iden�fied the gene�c switch which has so far limited the levels we can obtain in
ryegrass to about 10% of the required level for an effec�ve biocontrol agent.
Objec�ve 6:
We are exploring the use of the ryegrass endophyte to deliver novel traits in a ryegrass cul�var. Currently we are
tes�ng enzymes that increase the diges�bility of the grass in the animal rumen.
These enzymes would be sequestered by the endophyte and only released during diges�on. This year we
demonstrated that the enzymes are ac�ve and the next step is to perform in vitro diges�on assays of plant material to
measure to increased rate of diges�on expected.
Five key achievements.
1. Cysteine Oleosin - Oleosins allow oil bodies in seeds to become �ghtly packed organelles. Oils in the leaf are used
as short-term intermediate metabolites and are catabolized in the cell. No one has yet achieved any significant
increase in oil accumula�on in plant leaves. Cysteine Oleosin addresses these shortcomings by crea�ng an
encapsula�on system that enables the accumula�on of neutral lipids in vegeta�ve �ssues (ryegrass) at all stages
of development.
2. Lolines in Ryegrass - Two regula�ng genes for loline biosynthesis in the endophyte have been overexpressed and
the GM endophytes introduced into ryegrass. The plants grown in containment have high levels of lolines, an order
of magnitude greater than the non-GM strains. These levels if expressed in field condi�ons would protect ryegrass
against a range of insect pests not currently affected by the commercial AR1 and AR37 endophytes.
3. A 4 in 1 diagnos�c test for endophyte viability has been developed with suppor�ng co-funding from Grasslanz
Technology Limited for the seed industry. This is currently being beta-tested and if able to be scaled up, will replace
the immunological test that is currently used. The compelling feature of this test is it can measure viability, strain,
percent infec�on and detect any contamina�on in a single test.
4. AgResearch has a formal partnership with Kapyon Ventures LLC, a San Diego based technology incuba�on firm.
Through this partnership, the par�es have created two commercial spinouts - PhytaGro Corp (forages and bio-fuel
crops) and ZeaKal, Inc (major row crops) to commercialize the IP por�olio in global agricultural markets.
AgResearch is currently looking to sel both companies and is engaging with AgBio and seed companies both in
New Zealand and interna�onally.
5. We have shown that the ryegrass endophyte can be used to deliver novel traits into ryegrass. Several GM strains
that express func�onal plant cel wal degrading enzymes have been introduced into ryegrass. These plants are
being grown in containment and will be used in in vitro diges�on experiments to determine if the rate of cell wall
diges�on has increased. Endophytes are not spread by pol en so these strains would have a greater level of
containment than a GM trait in ryegrass.
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End-User rela�onship
AgResearch met in early July with representa�ves of the seed industry stakeholders PGGWS, Agriseeds, GTL and
Pastoral Genomics for a technical mee�ng of the NZ Forage Consor�um. AgResearch updated progress on developing
High Metabolisable Energy (ME) ryegrass development programme. The High ME ryegrass will poten�ally provide
significant environmental benefits (17% reduc�on in GHG) as well as increased farm produc�vity. The NZ Forage
Consor�um has a shared interest in developing GM forages to address requirements and provide opportuni�es for NZ
pastoral farmers. Plans is in place to coordinate breeding and ini�al overseas field trial efforts.
Highlights include:
1) Development of Cysteine Oleosin technology to stably increase lipid levels in the vegeta�ve por�ons of plants to
increase metabolisable energy (ME).
2) Development of GM ryegrass, white clover and alfalfa with increase ME.
3) Development of a 4 in 1 diagnos�c test for endophyte viability for seed industry (currently being beta tested).
4) Development of experimental endophyte lines with significant levels of lolines in ryegrass Through this program and
through internal AgResearch investment and in collabora�on with other research organiza�ons across the world,
we have developed a novel and well validated IP por�olio that has been shown to:
o Increase the energy density of forage crops through the eleva�on and stable accumula�on of neutral lipids
in the vegeta�ve �ssue;
o Poten�al y improve feed conversion by as much as 15%;
o Increase carbon fixa�on and biomass yield by up to 50% in forages;
o Elevate oil yields by up to 34% in seed crops;
o Modify the property of oil bodies for delivery of high value oil products.
AgResearch has a formal partnership with Kapyon Ventures LLC, a San Diego based technology incuba�on firm.
Through this partnership, the par�es have created two commercial spinouts - PhytaGro Corp (forages and bio-fuel
crops) and ZeaKal, Inc (major row crops) to commercialize the IP por�olio in global agricultural markets. AgResearch
is currently looking to sel both companies and is engaging with AgBio and seed companies both in New Zealand and
interna�onally.
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