Headed for Eight Billion People; Think Food and Fertilizer (PINK:BION)

While BIO NITROGEN CORP (PINK:BION) may seem like a long-term agriculture play, which in fact it is, the metaphor for long-term may be shrinking as birth rates globally continue to rise eventually bringing the number of people from currently just over seven billion to eight billion in a far shorter time span than previously expected.

So who’s going to feed them and the nine billion expected by 2050? Well farmers of course, but farmers rely on an equation to produce food: seed, water, and nutrient rich ground. The last two components will undoubtedly come under ‘demand pressures.’ I wrote a piece once titled, “Is Water the New Oil” because fresh water is key to the growing of all crops.

But crops only grow with fertilizer and that’s where BION is throwing down its gauntlet …   

In the news cycle yesterday was ‘meat’ produced in a Petri dish that could have big commercial applications in the next five years as ranch land is expensive and beef prices were calculated to one day rise to the level of a ‘Luxury Item.” Think Japan; Now… None of the people interviewed wanted meat from a test tube or a Petri dish.

With all of this as a background motivation, earlier this month Bio Nitrogen put out some facts from the International Fertilizer Association that were quite striking: 48% of the world's food is produced with the use of nitrogen fertilizer and without the use of fertilizer 2 billion more people will likely become threatened by hunger.

As published in BION news release, “What is obvious to the BioNitrogen team is that the world's population will continue to increase, cities will continue to expand, and the world's population will continue to need more and more food.”

The difficulties associated with food production range from soil degradation, agricultural land scarcities, fertilizer transportation costs, and environmental concerns, to national food security.

A converter of renewable and abundant biomass waste into high-nitrogen urea and urea fertilizer, BION has announced that is has secured a forty-nine (49) acre parcel of land to construct the Company's inaugural plant in Lubbock, Texas. The Company has already engaged X8 Engineering whom anticipates completion of the Environmental Site Assessment no later than March 12, 2012. 

BioNitrogen expects to begin construction of the plant after evaluating, obtaining and finalizing its financing and engineering options for the construction and commissioning, which it expects to complete in the coming weeks. The Company anticipates that the total cost to construct the plant will be approximately $65 million.  

BION’s patent-pending technologies transform residual agricultural waste and other biomass materials into high-quality bulk urea (a white, crystalline solid containing 46% nitrogen), which is principally used in the agricultural industry as a crop fertilizer. 

With demand for basic food crops increasing to mirror increased population growth, BION thinks that increased fertilizer consumption will be required to support global imports and exports of high-grade nitrogen-based urea.

I think they’re right.

Shares of BION are trading in the $1.64 range on the Lubbock plant news.  

I haven’t, don’t, and do not intend on holding any of the companies mentioned in this article.