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March 16, 2011
· Midwest ag luring venture capital firms
· Ag chief aims to ease fear on dust rules
· New alternatives to Methyl Bromide eyed
· Seedless cherimoya may be the next banana
· Plants sort and eliminate genes over millennia
Midwest ag luring venture capital firms
(Harvest Media via KansasCity.com) – Venture capitalists and farmers share some common ground: tolerance for risk. With the wrong seeds and wrong conditions, investments can wither. With the right seeds and right conditions, profits can abound.
Now agriculture upstarts are pitching venture capitalists to plant their cash in technologies that could revolutionize how farmers produce, move and sell what feeds the world.
“We’re in a boom time for agriculture,” said Jason
Henderson, vice president of the
Analysts expect
Last year the number of venture capital deals for companies
involved in food and fuel production was less than 3 percent of the
“The best returns venture capital investors get are in areas where people aren’t looking,” said Jessica Canning, an analyst with Dow Jones VentureSource.
And
The venture capital industry, like many others, rebounded in 2010. A part of that comeback was from investors making deals outside their traditional areas of information technology and health care. And as computerized equipment and GPS use become more common in agriculture, the lines between farming and high tech could soften further.
DuPont wants more
Grain prices twitched across a bank of monitors recently in
Jason Tatge’s office at Farms Technology headquarters
in
“Today we basically had … 5,912 different ticks,” or prices, on just one month’s futures contract for corn, Tatge said.
About a decade ago Tatge cooked up an online system, the Dynamic Pricing Platform, that lets growers set their own asking prices for grain and soybeans, sort of like Priceline.com. So a farmer can look at what the market’s doing, put in an offer to sell X number of bushels for, say, $5 each, and if a buyer such as the local ethanol plant is interested, it can take the farmer up on the bid.
In 2008 the venture capital wing of DuPont thought Tatge was onto something and bought a minority stake in Farms Technology. Then the chemical giant with agribusiness subsidiaries came back in late 2010 to cut a check for a majority share.
“We had built a product. We were out there marketing it,” said Tatge. “We were growing the business the old-fashioned way.
“And suddenly DuPont came along and said, ‘Look, we like what you’re doing, and here’s some capital, and let’s do it bigger and faster.’ ”
Since DuPont’s initial investment, Farms Technology has grown from 3,000 to 10,000 farmer accounts, such as the one held by Gary Briggs.
“I’ve used this for the last five years,” said Briggs, who
farms corn just outside Kincaid in east-central
Little by little over the last five years, Briggs began marketing more of his crop on Farms Technology’s Dynamic Pricing Platform. Today he sells almost all his corn that way, making it a welcome part of his operation.
Briggs does say there’s one drawback to having real-time market data and the ability to set prices any hour of the day — or night.
“It kind of gets in your blood,” Briggs said. “I’ll get up at 2 or 3 o’clock kind of curious what the nighttime trade’s doing. I’ve made sales doing that.
“My wife says I’m obsessed,” he said with a laugh.
Joking aside, Tatge thinks farmers’ growing desire to have instant information and access to markets will drive demand for his product and bring more venture capital to ag-focused startups such as his.
“Most of the new combines and the new tractors all have auto-steer, so when you’re planting you don’t have to steer anymore,” Tatge said. “If a farmer doesn’t really have to drive his tractor anymore, but he sits in there for eight hours a day, you know, what’s he going to do?”
Tatge laid out a scenario in which a farmer was riding in a tractor being steered by satellites through a cornfield. The yield estimate for his crop suddenly drops because of a weather prediction, or updated analysis of the crop so far or some other development, and that information pops up on the tractor’s digital dashboard.
“The odds are if they have lower-than-expected yields, then their neighbors probably do, and their neighbors’ neighbors probably do, so we’re probably going to have less supply than anticipated, which means they should all be raising their price,” Tatge said.
And with the Dynamic Pricing Platform, the farmer could do that immediately from the tractor.
“We want to give them tools to adjust the prices on what they’re expecting to get for their grain,” Tatge said.
‘A lot of opportunity’
In the early 1950s a little wheeling and dealing by
Today the challenge facing ag entrepreneurs is getting big-money investors to dig under their traditional comfort zones in information technology, Web or biotech, and unearth opportunities in agriculture — much of it in the Midwest.
Because for all of the ability that the venture-nurtured Web gives people to connect anywhere with anyone, venture capitalists “prefer to invest within about three hours of their office,” said Canning, of Dow Jones VentureSource, which is based in San Francisco.
But she also said she had started to see investors stray
from the coasts to make deals with ag companies in the
“The fact that it’s such a significant market and there’s not as much movement right now leads one to believe that there’s a lot of opportunity in this area,” Canning said.
But getting into agriculture requires firsthand knowledge that many venture capitalists lack.
“There are two gaps,” said Jim Schultz, founder and managing partner of Open Prairie Ventures.
Schultz works a little like a Johnny Appleseed, spreading
capital to grow Midwest ag companies from his firm’s
headquarters in
“One is trying to find managers who understand the space,” Schultz said.
The other, he said, is how a company eventually will be sold. It’s usually how venture capitalists make their money, and ag startups don’t have the same kind of established buyers as their counterparts in areas such as information technology.
In 2008 Open Prairie launched a $30 million fund that was split between agriculture and biotech. Schultz is looking to raise a new fund that deals solely with agriculture, and he’s been getting interest from investors as big as Goldman Sachs.
Although the new fund is still on the drawing board, Schultz keeps a big number in his mind’s eye.
“We’d like to think that it’s a nice nine-figure number, approaching $250 to $300 million,” Schultz said.
That may seem like pie in the sky, but companies such as Vestaron Corp. of
“The reality is that more firms will pick up the phone and talk to an agricultural company today than they would have back in 2005, 2006,” said John McIntyre, chief executive officer of Vestaron, which has raised more than $7 million from funding streams, including venture capital from Open Prairie.
But continued development takes more money, and persuading venture capitalists addled by the global recession to wade into largely uncharted waters takes some serious coaxing.
“There is still a discomfort as the discussions progress as to trying to get a grasp of and better understand what agriculture means,” McIntyre said.
That’s not a problem, though, at many Midwestern universities, which can serve as important conduits between ag-tech innovation and early-stage investment.
A quiet
After
An
“My last semester I was starting the process of getting patents and starting this company,” Mylet said. “I would miss a couple days of class a week to meet with my attorneys. I couldn’t tell my professors what I was doing. I think a lot of them maybe thought I was (just) skipping class.”
Mylet eventually launched LoadOut Technologies and sank his own money, earned from working on his family’s farm, into its development.
Today his company has a home in Purdue’s
Research centers at Midwestern universities, many encircled by farmland, are natural breeding grounds for ag-tech innovation. And this may ultimately be where venture capitalists unearth the next big idea.
“Five years ago we saw virtually no interest in the
institution venture capital industry in ag technology,
and that has shifted significantly,” said Steve Carter, director of
Around 2005 there were two venture funds that had periodic contact with Carter. Today, he said, that number is 12 to 15.
“They’re looking for opportunities, and a couple of them have made investments” of $1 million or $2 million, Carter said.
That’s a nice sum of money, but putting together the infrastructure to demonstrate how ag-tech can be applied in a large-scale production is very expensive.
In that regard, incubators such as the one at
The idea is that using public money this way will ultimately boost the economy.
Carter is especially excited by such things as new kinds of
biofuels processes and products made from agricultural waste material, all of
which need to be near
“Hauling massive amounts of feedstock long distances has a
tremendous effect on the economy of these things,” Carter said. “As a person
living in central
About Harvest Public Media
Tim Lloyd reports for Harvest Public Media, an agriculture
reporting project involving six
Ag chief aims to ease fear on dust rules
(AP via
Yahoo! News)
Farms frequently produce dust clouds during harvests, and farmers are waiting nervously to hear whether the U.S. Environmental Protection Agency plans to clamp down on dust and dirt.
The American Lung Association and others have called for tougher dust controls when the EPA revises air pollution standards.
But members of Congress from rural areas have asked the EPA not to tighten rural limits on the so-called coarse particulate matter. Tighter controls could require farmers to pave more gravel roads or use costlier no-till farming practices.
Vilsack tried to ease the worries of farmers.
"I don't think that farmers should presuppose that there's going to be a significant amount of regulation" about farm dust, Vilsack told reporters after he spoke to the Denver Metro Chamber of Commerce.
Vilsack said he was confident the revised air-quality standards won't burden farmers.
"I'm reasonably certain that the EPA understands — by virtue of my conversations with Lisa Jackson, the administrator — that they have to make them reasonable," Vilsack said.
A farming group that sued over farm dust rules five years ago reacted cautiously to Vilsack's assurances.
"We've learned not to take anything for granted from any agency and not to believe what any agency says until it happens," said Richard Krause, senior director of congressional affairs for the Washington-based American Farm Bureau Federation.
The group sued the EPA in 2006 during its previous review of airborne pollutant standards. The lawsuit was unsuccessful, but the environmental agency ended up not changing rural standards.
Krause hopes the agency makes the same decision this time. Draft rules are expected later this year.
"We want to make sure they understand the concerns of
rural
Vilsack told the business group that the nation would set a
record this year with $136 billion in agricultural exports. He also repeated
his plea for Congress to ratify a free trade agreement with
Members of Congress have indicated they would hold off on
the
New alternatives to Methyl Bromide eyed
(USDA-ARS) – U.S. Department of Agriculture (USDA)
scientists trying to help
Researchers with USDA's Agricultural Research Service (ARS) are examining whether a cropping system that uses molasses to stimulate microbial activity could be used to replace the popular fumigant. They also are studying recently developed fumigants. The work, presented at the recent Annual International Research Conference on Methyl Bromide Alternatives and Emissions Reductions, supports the USDA priority of promoting international food security. ARS is USDA's principal intramural scientific research agency.
Farmers have been using methyl bromide since the 1930s to
control a broad spectrum of nematodes, pests and pathogens. But because methyl
bromide depletes the earth's stratospheric ozone layer, growers worldwide are
being required to find a replacement. That's a tall order in
ARS scientists Erin Rosskopf and
Nancy Kokalis-Burelle and former ARS research
associate David Butler raised bell peppers and eggplant at the agency's U.S.
Horticultural Research Laboratory in
The sun-drenched tarp "cooks" the weed seeds in
the soil, and the carbon and water increase microbial activity, creating
conditions conducive to pest control. As part of the project, ARS scientists
Greg McCollum and Joseph Albano, who are also with the
The researchers heated the soil via solarization and treated plots with different levels of the organic materials and different amounts of water. The molasses used was a waste product of the sugar cane processing industry. They planted peppers in the fall and eggplant in the spring, sampled the soil for nematodes, counted nematodes on crop roots, assessed weed populations and soil properties and measured crop yields.
The scientists found nematode populations were reduced when treated with molasses and poultry litter, that molasses and poultry litter controlled grass weeds just as well as methyl bromide, and that the solarized treatments heated the soil to levels that were at or just below levels that are lethal for many soil pathogens.
The researchers also are comparing two recently developed fumigants, dimethyl disulfide (DMDS) and methyl iodide, with methyl bromide at two sites, one where they raised delphiniums and the other with caladiums. Preliminary results show the alternatives are just as effective as methyl bromide at suppressing grass weeds and controlling nematodes, but their overall effectiveness depended on the type of cultivar produced.
Read more about this research in the March 2011 issue of Agricultural Research magazine.
Seedless cherimoya may be the next banana
(UC Davis
via physorg.com) – Mark Twain called it "the most delicious fruit
known to man." But the cherimoya, or custard apple, and its close
relations the sugar apple and soursop, also have lots
of big, awkward seeds. Now new research by plant scientists
in the
Going seedless could be a big step for the fruit, said Charles Gasser, professor of plant biology at UC Davis.
"This could be the next banana -- it would make it a lot more popular," Gasser said. Bananas in their natural state have up to a hundred seeds; all commercial varieties, of course, are seedless. A paper describing the work is published March 14 in the journal Proceedings of the National Academy of Sciences.
Researchers José Hormaza, Maria Herrero and graduate student Jorge Lora at the Consejo Superior de Investigaciones
Cienti?cas in
They looked similar to the ovules of a mutant of the lab plant Arabidopsis discovered by Gasser's lab at UC Davis in the late 1990s. In Arabidopsis, the defective plants do not make seeds or fruit. But the mutant sugar apple produces full-sized fruit with white, soft flesh without the large, hard seeds.
The Spanish team contacted Gasser, and Lora came from
"This is the first characterization of a gene for seedlessness in any crop plant," Gasser said.
Seedless varieties of commercial fruit crops are usually achieved by selective breeding and then propagated vegetatively, for example through cuttings.
Discovery of this new gene could open the way to produce seedless varieties in sugar apple, cherimoya and perhaps other fruit crops.
The discovery also sheds light on the evolution of flowering plants, Gasser said. Cherimoya and sugar apple belong to the magnolid family of plants, which branched off from the other flowering plants quite early in their evolution.
"It's a link all the way back to the beginning of the angiosperms," Gasser said.
Plants sort and eliminate genes over millennia
(
Brian Dilkes, an assistant professor of genetics at Purdue University, worked with a team of scientists at the University of California Davis and University of Southern California to study the genome of Arabidopsis suecica, a hybrid species with four chromosome sets formed tens of thousands of years ago from a cross between Arabidopsis arenosa and Arabidopsis thaliana, a plant commonly used in laboratories for genetic research. Dilkes said the findings, published in the journal Genome Biology and featured as an editor's choice article in the journal Science, give a glimpse into the evolutionary forces and ultimate fates of genes contributed by the two parents to a hybrid
"There often is no visible signature of these genes when we look at the plants with a microscope, but we can still observe those genes in the genome sequence," Dilkes said. "Moreover, the ability to make crosses between Arabidopsis thaliana and Arabidopsis arenosa gives us the opportunity to compare laboratory-derived plants that were generated yesterday with naturally occurring species from the wild and compare the two kinds of species hybrids. This is essentially allowing us an opportunity to 'replay the evolutionary tape,' in the words of Stephen J. Gould."
The researchers compared the genomes and gene expression among Arabidopsis suecica plants that have evolved over tens of thousands of years to similar species of hybrids made in the lab from fresh crosses.
When the contribution of genes from each parent was compared, they were not equal. One parent's genes were preferentially expressed at higher levels. In the cases where that happened, it was three times more likely that the preferentially expressed genes came from Arabidopsis arenosa.
The team also found that gene pairs that are co-expressed in similar tissues are preferentially expressed from the same parent. Even in the rare cases when an Arabidopsis thaliana gene was more abundantly expressed in the hybrid, co-expressed genes would also be preferentially expressed from the Arabidopsis thaliana copy.
"Our findings suggest an additional network dependence, where genes fine-tuned to work together within either parental species prior to hybridization are more likely to be expressed together in the hybrid. This, in turn, ensures that these genes acquired from one parental species are kept together and are not lost in the genome over time," said Peter Chang, a graduate student at USC and lead author on the paper. "Plants have had a remarkable ability to adapt to different conditions throughout Earth's history, and we are just beginning to understand some of ways this is done."
Previous work has shown that plant genomes with historical duplications from tens of millions of years ago have lost one of the two copies in large blocks along the chromosome, consistent with the preferential loss of one parent's contribution.
Dilkes said the retained genes may have a role in the plants' fitness but genes that weren't expressed would be deleted from the genome.
"The genome is moving toward a two-copy organization, a diploid, by preferentially deleting one parent. When others have looked at genomes that have ancient duplications they see large blocks of duplications in which one block has a large number of genes and the other has a sparse gene content," Dilkes said. "Perhaps a cause of this pattern in the organization of genomes is preferential expression, and, all other things being equal, the gene that is more abundantly expressed will carry a greater proportion of the fitness load for any essential function."
End Transmission