REDONDO BEACH, CA / ACCESSWIRE / July 30, 2015 / With the global population surging to 7.3 billion people, there is a clear need for more food in the future. Over the last 50 years production techniques along with an increase in acreage have resulted in substantial yield growth, ensuring that the global population has enough food to be fed, for now.
With this increased production comes costs; one of the most problematic is the increased use of growth hormones in animals. Regulators in the U.S. Food and Drug Administration have taken steps to curtail drug usage in animal feed for growth promotion, a move meant to try and curb the breeding of antibiotic-resistance bacteria.
Next year, the new Veterinary Feed Directive goes into effect, for the first time mandating that farmers go to veterinarians to get any antibiotic-laced feed, rather than simply being able to buy it over the counter. Effectively, this puts a gatekeeper between farmers and pharmaceutical companies such as Zoetis (NYSE: ZTS), the world's largest animal-drug company who can currently sell directly to farmers.
Elsewhere, the FDA recently gave food makers three years to eliminate artificial trans fats from their recipes. While the shift away from partially hydrogenated oils (PHOs) will have a cost to the industry, many companies, such as McDonald's (NYSE: MCD) and Mondelez International (NASDAQ: MDLZ), have been moving away from the artery-clogging product for many years.
The U.S. government is also tightening on chemical contaminants that may disrupt the endocrine systems of people and wildlife via the Environmental Protection Agency's Endocrine Disruptor Screening Program (EDSP). CropLife America, a crop protection and chemical industry organization whose lengthy list of members include Iteris (NYSE MKT: ITI) and Syngenta (NYSE: SYT), recently applauded the EPA's release of the Tier 1 Weight of Evidence results for the EDSP in the ongoing effort to "separate effective chemicals that benefit society from ones that should not be near people."
GroGenesis in the Right Place at Right Time
These sweeping efforts create a growth opportunity for small companies like GroGenesis (OTCQB: GROG), a manufacturer of novel agricultural enhancement products, as farmers look for innovative and safe methods to improve crop yields and profits. The company's two flagship products are a biostimulant called AgraBurst and a liquid broad-spectrum algaecide, fungicide, bactericide, and general sanitation product marketed as AgraBlast. GroGenesis has field-tested these products all around the world in the harshest of conditions (sun, soil, moisture, disease, etc.) to document the effectiveness of AgraBurst and AgraBlast to efficiently bolster yields in a cost-effective manner. The products can be used independently or in combination to protect crops from a litany of pathogens and inclement weather while simultaneously supporting greater water, light and nutrient uptake.
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In the vein of safety and regulatory initiatives, GroGenesis products are 100 percent free of toxic components and contain exactly zero hormones, heavy metals, pesticides and carcinogens, making them safe for all plants, humans and animals. AgraBlast is a "green" product that breaks down into natural elements, leaving no visible residue, odor or deleterious effects.
The results for farmers are not only superior plant quality and yield, but also improved soil as AgraBurst enhances nutrient availability and exchange capacity. Field studies in North American, Central America and Asia show that the conditioning effect of AgraBurst results in shorter plan germination time, increased growth and improved disease resistance. Moreover, because of the aforementioned improvement in uptake, farmers can reduce fertilizer use, saving cash while mitigating the effects of over-fertilization.
The Stage is Set
Cumulatively, the biostimulant and crop protection markets are about expected to exceed $50 billion as they grow at a rapid pace. The regulatory framework is demonstrating the government's commitment to create a safer food production environment at a time when the world's population is booming and a food shortage could be looming. GroGenesis has dedicated years of research and development to quantify and validate the benefits of its products in worldwide testing and now those products seem to be experiencing increased usage by farmers. Shares of GROG have been under pressure recently, putting them in an oversold condition, perhaps creating a perfect storm as investors look forward to upcoming results from the second quarter.
SECFilings TV Interview with Mr. Stuart Brazier / VP of Business Development at GroGenesis, Inc. (OTCQB: GROG) from TDM Financial on Vimeo.
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