Geopolitical concerns over the Russian invasion of Ukraine are just the latest in a string of macroeconomic events pushing Agriculture stocks higher. Supply chain problems, increasing energy costs, and rising global demand are creating higher commodity prices and thereby higher revenues for US agriculture.
The United States Department of Agriculture (USDA) reports net farm income increased by $23.9 billion in 2021, a 25% year-over-year (YOY) increase. iShares MSCI Agriculture Producers ETF (NYSEARCA: VEGI) hit an all time high recently. It's no surprise when you consider Ukraine and Russia export a combined 29% of the world's wheat.
While investors have driven up agriculture plays from producers to cultivators to ancillary plays as the industry is booming, some of those stocks may be overweight. As noted, VEGI has hit an all-time high, so it may be time to look at alternative agriculture plays that still have headroom based on a rise in commodities.
Knowing money may flow to alternative agriculture plays, here are stocks under $5 in the space to radar, as they can bring larger gains at a faster rate than their bloated blue-chip counterparts.
HEMP OVER WHEAT
Generation Hemp, Inc. (OTCMKTS: GENH) is one of the more interesting ways to play this agriculture bull market. GENH is a midstream hemp cultivation company with several verticals utilizing hemp hurd. The industrial hemp market size is expected to reach USD 16.75 billion by 2030, registering a CAGR of 16.8% according to Research and Markets.
GENH is most likely the best pure hemp play under $1.
When it comes to inflationary prices on food, especially wheat, as Ukraine and Russia account for nearly 30% of the world's wheat output, hemp is an intriguing substitute. Both wheat germ and hemp seeds are high in calories, however, hemp seed actually has 54% more calories than wheat germ - wheat germ has 360 calories per 100 grams and hemp seed has 553 calories. For macronutrient ratios, wheat germ is much heavier in carbs, much lighter in fat and similar to hemp seeds for protein. Wheat germ has a macronutrient ratio of 24:54:23 and for hemp seeds, 21:6:73 for protein, carbohydrates and fat from calories.
Generation Hemp, Inc. (OTCMKTS:GENH) operates through its wholly-owned subsidiary GENH Halcyon Acquisition, LLC, at a facility located in southwestern Kentucky.
GENH's modular drying operation, using four belt dryers. Each dryer is equipped with variable temperature settings that provide for a more efficient drying process while protecting the plant's valuable cannabinoid and terpene properties. These modular systems can produce approximately 1,200 pounds of uniformly dried hemp per hour.
In 2020 the company processed over 6 million pounds of wet hemp for various Kentucky and Tennessee clients and was expected to have dried approximately 11 million pounds of wet hemp in 2021.
BIOTECH IN AGRICULTURE
Arcadia Biosciences (NASDAQ:RKDA) is another way alternative way to play rising wheat prices. It specializes in developing health and wellness products. Earlier this year, it was granted a Notice of Allowance for a US Patent titled "Wheat Having Resistance to Glyphosate Due to Alterations in 5-Enol-Pyruvylshikimate-3 Phosphate Synthase." Recently, the company published a document "Methods of Increasing Fiber In A Wheat Grain." While alternatives to wheat such as hemp are one way to play the rising prices, a bio-tech company looking to increase the output of wheat cultivation like RKDA are another option.
Another alternative biotech play that helps maximize agricultural output is SenesTech, Inc. (NASDAQ: SNES) the one and only EPA approved birth control product for rats, which addresses the unique challenges controlling rat populations in this unique customer segment. Clean pest control is key to optimal agricultural output.
Evogene Ltd. (NASDAQ: EVGN) is a diversified biotech stock with a few agricultural innovations inside its portfolio. AgPlenus Ltd. is creating a New Mode-of-Action (MoA) herbicides - in 2022 - the company plans to enter additional collaboration agreements and expand its data package for APTH1, AgPlenus' leading new MoA protein for the development of novel herbicides.
Evogene's (NASDAQ: EVGN) other agbiotech subsidiary, Lavie Bio Ltd., is working on an Inoculant (bio-stimulant) for spring wheat. During late 2021, Lavie Bio began the commercialization of its inoculant result(TM) aiming at the improvement of yield based on microbes. The product's initial market penetration for spring wheat is planned for the upcoming 2022 sowing season and will be limited to target regions in North Dakota. The company is also working a Bio-fungicide fruit rot program - Following the completion of three consecutive years of vineyard trials, conducted in Europe and in the U.S., Lavie Bio has prioritized LAV311 as its lead candidate for final development and submission of a regulatory dossier, expected to be filed with the federal U.S. Environmental Protection Agency (EPA) and California EPA during 2022.
Calyxt (Nasdaq: CLXT) is a plant-based synthetic biology company. The Company leverages its proprietary PlantSpring(TM) technology platform to engineer plant metabolism to produce innovative high-value plant-based chemistries for use in customers' materials and products. As plant-based solutions, the Company's synthetic biology products can be used in helping customers meet their sustainability targets and financial goals. Calyxt's diversified offerings are primarily delivered through its proprietary BioFactory(TM) production system.
ESG AGRICULTURE PLAYS
AgroFresh (NASDAQ: AGFS) is an AgTech play that's mission is to "prevent food loss/waste and conserve the planet's resources by providing a range of science-based solutions, data-driven digital technologies and high-touch customer services." AGFS boasts a portfolio that includes plant-based coatings, equipment and proprietary solutions that help improve the freshness supply chain from harvest to the home.
Generation Hemp, Inc. (OTCMKTS: GENH) is also an ESG play as it is using its hemp hurd to make a greener crypto mining sector. partnered with Massachusetts-based Cryptech Solutions, the largest volume reseller of ASICS in North America, to build 'green energy' plants and Bitcoin mining farms that utilize hemp as the primary power source. Last Friday, GENH announced the first bitcoin mining facility through a Joint Venture 'JV' to be installed at Generation Hemp's 48,000 sq. foot facility in Hopkinsville, Kentucky, which also houses a hemp drying operation through its wholly-owned subsidiary GENH Halcyon Acquisition.
Make sure you start your research today.
More on GENH here: https://capitalgainsreport.com/2022/03/08/generation-hemp-uses-hurd-to-clean-spills-and-comfort-animals/
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