It all went down last Friday …
USDA Secretary Tom Vilsack made a comment that set off the alarms for investors in the agriculture space.
During a briefing with reporters, Vilsack voiced his support for the mandatory labeling of genetically-modified foods, after getting the nod that there could be enough votes in the Senate to get this kind of thing approved.
The theory is that if such a bill passes, it could mean big trouble for Big Ag, which relies heavily on genetically-modified foods, or what are often referred to as GMOs. Investors are also concerned that it could pose a huge threat for biotech firms like Monsanto (NYSE: MON), and Syngenta (NYSE: SYT).
As an investor who’s made an absolute fortune in the sustainable and organic foods space, I can tell you that I champion anything that could potentially add more value for organics and less value for the conventional toxic slop we call food today.
But despite the excitement in the treehugger camp of which I am a part, I can tell you, not as an environmentalist, but as an investor, that Big Ag and biotech investors have absolutely nothing to fear.
What Matters? Cheap and Easy
When it comes to food, I am obsessive.
I’m obsessive about where it comes from, who produces it, and how healthy it is.
Nearly everything I eat comes from local farms where I know the farmers.
My meat is raised in a sustainable manner where animals are treated with dignity and respect. They’re also fed what God intended them to eat — not toxic cocktails of GMO corn, growth hormones, and their own excrement.
Fruits and vegetables are grown organically, and anything “processed” is processed by me. I’m more than happy to bake my own bread, make my own sausages, and can my own vegetables. I even roast my own coffee beans, but that has more to do with me being a bit of a coffee snob.
In any event, the point is this …
Food is fuel. It’s medicine, it’s energy, it’s joy. So to put anything in my body that has been manipulated to the point where it’s no longer food, but rather various, re-formulated components of carbs, fats, and proteins is of no interest to me.
But here’s the rub …
I’m in the extreme minority, and folks like me don’t have enough of an impact on the global food system to even register as an accounting error.
Moreover, despite all the backlash against GMOs in the media, most people really don’t care.
Most people don’t even look at the ingredients labels on the things they buy.
Most people want food that is cheap and convenient. That’s it.
Sadly, most people don’t even use their kitchens anymore, other than to wash dishes and cook pre-made lasagnas in the microwave.
And here’s the inconvenient truth for folks who believe that mandatory GMO labeling is going to help people make healthier decisions when it comes to buying their food: It doesn’t matter.
The same people who are perfectly happy not knowing where their food comes from are not going to even notice a GMO label. And combined, these folks spend far more on their food than consumers of sustainably-produced and organic foods.
That doesn’t mean their value as consumers is insignificant. After all, the global organic market is currently valued at about $72 billion. That ain’t chump change, and it’s certainly been enough of a reason to invest in this space. Especially when you look at growth.
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It’s not about the show, it’s about the GROW!
Between 2002 and 2011, organic food production increased by about 240%. Compare that to the 3% in the non-organic food market.
Yes, the conventional food market still controls the lion’s share of sustenance, but when it comes to investing, it’s not about how big the market already is, it’s about how big it can grow. And this is why I remain incredibly bullish on the organic food market.
I’m not saying every organic food play is going to make you rich. You still have to be picky, just like with anything. But there are still plenty of opportunities out there.
My favorite play in the space right now is Captiva Verde (CSE: VEG) (OTCBB: ARDWF).
This is actually one of the largest organic vegetable producers in the United States, providing a steady flow of organic vegetables to the nation’s largest supermarkets and food producers.
The company is well-funded and has a production capacity of 500,000 pounds per week. This is massive for this market.
Basically, Captiva is looking to become the largest producer of organic vegetables — mostly leafy greens — in the United States. And with demand so strong, and competition so limited, Captiva Verde is in a very sweet spot. It’s also a screaming bargain at current levels.
To a new way of life and a new generation of wealth…
@JeffSiegel on Twitter
Jeff is the founder and managing editor of Green Chip Stocks, a private investment community that capitalizes on opportunities in alternative energy, organic food markets, legal cannabis, and socially-responsible investing. He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor””s page.