What Sounds Like a GMO, Grows Like a GMO, But Isn't a GMO?
This Small Company Will Upend a Multibillion-Dollar Industry
I come from a farming family. My great-great-grandfather and his two brothers immigrated here from Scotland in the 1800s and settled in an area in Indiana that became known as Cass County.
When they first got there, there were still wolves and bands of marauding Native Americans roaming the countryside. But those weren’t the only worries they had.
They were farmers. And they needed their crops to grow to put food on their tables and support their growing families.
Back then, the most advanced technology you had was a metal plow and a team of horses or oxen to pull it. A far cry from today, when you can buy combines and planters that are controlled and driven by computers.
But they worked hard and grew their crops, and my family spread out over the area. Now, when I go back to visit, they say you can’t throw a rock without hitting a relative of mine.
The farm they started is still in my family. My dad inherited part of it when his parents died. He grew up there. And he’s got some great stories about outhouses, community phones, winters cold enough to freeze the glass of water on your bedside table, and finally getting electricity in the farmhouse.
Now, he isn’t a farmer, although he came really close to being one. He graduated from Purdue University with a bachelor’s in agriculture. But then he got drafted during the Vietnam War.
He was in a relatively special unit in basic training. All the members had at least a bachelor’s degree. That was odd for a group of draftees. They always said the only fraternity you couldn’t join if you stayed in college was the Mekong Delta.
But I guess once you graduated, you were fair game. Anyway, after going through basic, my dad was offered a position here in Maryland at Edgewood Arsenal (now part of Aberdeen Proving Ground). He worked in the labs at Edgewood testing chemical warfare agents from pepper gas to pot.
And he developed a love of the lab. He had already gotten some experience during his degree, but it was this time in the Army that convinced him to become a scientist instead of a farmer. He went on to work for several pharmacological companies after earning his master’s and PhD in biology from Rutgers.
But I digress. You see, after growing up on that farm, the dirt was in his blood. And he couldn’t bear to part with the land once it was his. So, we still own it and rent it out to a local farmer. I go and visit as often as I can. I love the feel of a tractor seat under me. And I love the smell of the plants and animals — even the hogs. And the stories you can hear at the Big R and local sundry stores are things you just can't get anywhere else.
I also go to talk about the rain, hear about the harvest, and learn about the kinds of production the farmers are getting from the new seed they're trying or the new irrigation or fertilizer technology they're implementing.
After years of visits and thousands of hours of conversation, there's one thing that's become abundantly clear...
We Need GM Crops to Survive
Without GM crops, farmers would go bankrupt and the world would starve. I know there are tons of people out there who think these plants are part devil and part death sentence. But without them, we could never feed the constantly growing world population.
Currently, there are three companies that control most of the GM seedstock in the world. They’re DuPont (through its Pioneer Seed subsidiary), Syngenta, and the big daddy of them all, Monsanto.
According to Fortune magazine, more than 90% of the corn, soybeans, cotton, sugar beets, and canola grown in the U.S. starts from genetically modified seeds.
Probably the most hated company on Earth, Monsanto is the biggest GM seed-maker in the world. Some 80% of the corn grown in the U.S and 90% of the soybean crops have Monsanto’s patented seed traits.
The company raked in $14.64 billion in revenues this year. Of that, nearly 71% came from seed sales. That’s a massive $10.362 billion in sales.
But all that could come to an abrupt halt very soon.
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Goliath, Meet David
That’s because one small, practically unknown company has been developing lines of seeds that are even more impressive than those of all three main seed producers.
And the best part about these seeds is that the genetic engineering used to create them doesn’t involve inserting foreign substances into the plant.
Currently, companies like Monsanto take a bacterium and modify its DNA to get the trait they want. From drought tolerance to the dreaded (yet profitable) Roundup resistance, all those modifications have been achieved by injecting a specific type of modified bacteria into seeds.
But this company has found a way to cut out the traits it doesn’t want in a plant. And it’s doing it all without introducing bacteria into the plant’s genetic makeup.
It’s called gene editing.
You simply “snip” parts of a plant’s DNA that are responsible for an unwanted trait, and presto — the trait no longer exists.
Want drought-resistant corn? Snip!
Want to make your soybeans immune to blight? Snip, snip!
Want to create wheat that uses its own immune system to repel pests? Snip, snip, snip!
So far, this tiny company has used this gene-editing technology to develop food products that are near commercialization, including...
- Potatoes that you can store in the refrigerator, making them last far longer after you buy them.
- Wheat that could produce flour with up to three times more dietary fiber than the standard, thereby improving digestion, lowering cholesterol, stabilizing glucose levels, and helping to keep weight down.
- Reduced trans fat in soybean oil and lower saturated fat in canola oil, which studies show can lower the risk of heart disease.
- Wheat, corn, and rice that are immune to the devastating powdery mildew disease, resulting in farmers being able to forgo poisonous fungicides.
But this company has many more food products in the pipeline, like...
- Herbicide-tolerant wheat. This alone could be the death knell for Monsanto, as it will render GMO seeds obsolete and drastically reduce the need for Roundup and other herbicides.
- Gluten-reduced wheat, a godsend for bread lovers with gluten sensitivities.
- New traits in corn, wheat, and rice to produce higher yields and higher profit margins for farmers.
The company is also developing herbicide-tolerant alfalfa, blight-resistant potatoes, improved-yield soybeans...
It's even working on developing technology for improving the supply chain of animal products!
When a GMO Isn't a GMO
And since it’s not introducing bacteria like traditional GM producers, the FDA doesn’t consider the product a genetically modified organism (GMO).
Now, it is. Anything you genetically modify is. Even cross breeding is genetic modification. So that mutt you adopt from the shelter… you guessed it, it’s an adorable, furry GMO.
But thanks to definitions at the FDA, GMOs are classified as any organism whose genetic material has been modified using genetic engineering techniques. Really, that’s a GEO — genetically engineered organism — but this is the FDA. They're bureaucrats first and scientists second.
And thanks to their definition, the crops produced by this small company can be sold as non-GMO but can still have all the benefits of GM seeds. They can be drought-tolerant. They can withstand freezing temperatures. They can even be sprayed with herbicide and not die.
And that means Monsanto (and the other two GM seed manufacturers) won’t be the only ones controlling the market for the world’s seedstock.
This is a multibillion-dollar market that’s about to get turned on its head. And all the money falling out is going to head right over to the coffers of this one company.
My colleague Jason Stutman is working out all the details of this blockbuster investment. And he’s putting the final touches on a presentation that he’s going to share with you first.
In the meantime you can hear him discuss the company a bit more in our Investing After Hours podcast, which you can access here.
And keep an eye out for his email. This is an opportunity you don’t want to miss.
To your wealth,
Follow me on Twitter @AllBeingsEqual
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