WHITEFISH, MT / ACCESSWIRE / May 4, 2015 / With the global population at 7.3 billion currently and expected to reach 9.1 billion in 2050, the United Nation's Food and Agriculture Organization has warned that world food production needs to expand by 60 percent by that time. If the goal of a significant rise in production is not met, according to Hiroyuki Konuma, the assistant director-general of FOA Asia-Pacific, "there will be a high risk of social and political unrest, civil wars and terrorism, and world security as a whole might be affected." The growing population and subsequent rise in demand should be good for large fertilizer ingredient producers like Potash of Saskatchewan (TSX: POT)(NYSE: POT) while creating market opportunities for small companies with innovative growing technologies, such as Ceres (NASDAQ: CERE), Marrone Bio Innovations (NASDAQ: MBII) and GroGenesis, Inc. (OTC: GROG).
Shares of Potash of Saskatchewan, the world's biggest potash play, took a hefty hit in 2013 with the breakup of the Belarusian Potash Company, a price-cartel-ending move that many suspected would flood the market with product and cause potash prices to erode drastically. The price plummet never manifested and POT shares have recovered, including Toronto-listed shares hitting a multi-year high of $46.67 earlier this year. Potash Corp. delivered record fourth-quarter potash sale volumes of 2.5 million tonnes and neared the upper end of guidance with profits of 49 cents per share in Q4 with a $1.82 per share profit for the full year 2014. For 2015, the company has forecast earnings in the range of $1.90-$2.20 per share.
Potash Corp. has been able to trim production costs, setting the stage for the company to deliver a better return to shareholders as the global market value for fertilizer is predicted to rise to more than $185 billion by 2019.
Ceres is an agricultural biotechnology company coupling biotech and advanced plant breeding to develop seeds for bioenergy, food, feed and fiber crop applications. These products, sold under the brand name "Blade," can be used on multiple crops to increase productivity, improve quality, reduce crop inputs and improve cultivation on marginal land. Ceres also markets its proprietary genome explorer software, called Persephone, to plant and biomedical researchers. Notably, Syngenta (NYSE: SYT), one of the world's biggest crop engineering companies, and Bayer CropScience, the subgroup of Bayer AG (OTC: BAYRY) responsible for the agricultural business, have licensed the Persephone technology.
In March, Ceres partnered with Brazilian energy company Raizen, the fifth largest company in Brazil by sales that is a joint venture between Royal Dutch Shell (NYSE: RDS.B) and Cosan (NYSE: CZZ), to develop and produce sweet sorghum to complement existing feedstock supplies and extend the operating season of Brazilian sugarcane-to-ethanol mills.
Pesticides Are Big Business
Estimates are that the world spends approximately $65 billion each year on chemicals to protect their plants, as insects and disease account for about 40% of all crop losses annually around the world. The spending is understandable, considering some insects, such as pod sucking bugs that feed on tomato and cotton plants, can cause a yield loss of up to 100%.
Understanding and strengthening a farm's ecosystem through new technologies is critical to improve crop yields. GroGenesis recognizes that simply using fertilizers to provide plants nutrients (mainly nitrogen, phosphorous and potassium) has its limitations, as the nutrients are often not efficiently absorbed by the plants. The answer is not more or higher concentrations of fertilizer, since overuse can disrupt soil composition balances and actually lower yields. As a solution, GroGenesis offers AgraBurst(TM), an environmentally friendly product utilizing surfactant technology that is neither a fertilizer nor pesticide. It's a superior fertilizer delivery mechanism for any type of plant, acting to reduce inter-cellular friction to accelerate absorption of vital nutrients, chemicals and water through the plant's leaf, while simultaneously increasing root uptake. In turn, more efficient photosynthesis and higher plant sugar levels are generated, resulting in larger, healthier and more productive plants.
Photo Source: GroGenesis Website
AgraBurst(TM) has been tested in different countries and is undergoing additional field trials in North America (including tests on corn and cotton being conducted by Texas A&M), Central America, Australia and especially Asia, the region that the FAO expects food demand to increase the most in the next two decades. The results to date have shown the potency of AgraBurst(TM) to deliver bigger, healthier plants and increase yield, even under extremely adverse conditions. Trials in the USA have included a variety of high-value crop types, including, but not limited to, corn, canola and tobacco. The image is from a 2013 study conducted in North Carolina where corn seed was treated in-furrow at planting. Compared to the untreated plants, treatment with AgraBurst(TM) (corn on left in image) resulted in an increase of 40 bushels per acre.
Recent testing of AgraBurst(TM) at a sugarcane plantation has also shown stronger plants and greater yields after only seven months and two treatments of AgraBurst(TM). The results disclosed last month showed the AgraBurst treated section measured an increase of 24.96% in height (+12' tall stalks versus +8' tall stalks); 26.56% in plant stalk circumference (+4.5" circumference versus +3"); and 2.8% in sugar purity samples to 87.8% purity, in addition to a substantial increase in tillering (underground branching that results in more stalks and larger yields). According to GroGenesis, the plantation owner has ordered additional AgraBurst(TM) to expand the field trial with the intent of plantation-wide use pending further successful outcomes. As mentioned with Ceres, there is a tremendous opportunity in Latin America with respect to sugarcane alone.
GroGenesis' newest product is called AgraBlast, an eco-friendly, broad-spectrum algaecide, fungicide, bactericide, and general sanitation product for the control and prevention of horticultural diseases and pathogens in pre-harvest, post-harvest and storage of field-grown crops. Using oxidation to protect against bacterial inoculums and fungal spores, AgraBlast can be applied from seed to harvest, protecting on contact without leaving behind any pesticide residue as AgraBlast breaks down into natural elements. Moreover, AgraBlast can be used for infection control and surface sanitation of tools, storage buildings and other surfaces.
Used in combination (and as directed), AgraBurst(TM) and AgraBlast can stimulate plant growth and recovery while protecting against fungal and bacterial disease, killing soft-body pests and ameliorating the soil. Evidence of the effectiveness of this combo regimen has been documented in a white paper released by GroGenesis, showing an immediate benefit to coffee plants in Guatemala with the fungal disease commonly known as Coffee Leaf Rust, and on banana plants in the Philippines infected with the fungal pathogen Mycosphaerella fijiensis causing black sigatoka.
The FOA's warning may seem a bit harsh to some, but the fact remains that the global population is rising quickly while food production struggles to keep up. Simply put, there needs to be more food, and with limited room for more farmland that means more efficient use of today's resources while employing new technologies to bolster production and protect the environment. Majors in the agriculture space, like Potash Corp., Mosaic (NYSE: MOS) and Monsanto (NYSE: MON) will certainly play a role in helping meet the world's needs as small companies like Ceres, Marrone Bio Innovations and GroGenesis work through growing pains in a bid to capitalize on a significant market opportunity with their unique products.
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