Soil Amendments: Targeting Stressed Cropland
Contents
Introduction
More than dirt
Market trends
Facts, figures, forces
Market movers
Leaders & fast followers
What are Soil Amendments’ impact?
Less GHG?
Investors
VC / PE / Funds
Final Thoughts & Investment Outlook
Cautions, downsides
Treating Soil as More than Dirt
Vanishing soils raising alarms globally
Soil — life as we know isn’t possible without it, yet we treat it like… well, like dirt. We deplete it, we contaminate it.
This matrix — minerals, liquids, organic matter and gasses — sustains us by storing water, serving as a growth medium for plants and a home for living things and other functions probably not yet discovered.
And yet we take it for granted. So much so that thanks to the way we build and farm, the planet is losing soil 10-to-40 times faster than it is naturally replenished, according to a 2021 Cornell University study. The United Nations’ Global Land Outlook, released in April, 2022, put it in stark terms: half of the world’s cropland is degraded.
“Modern agriculture has altered the face of the planet more than any other human activity,” the report stated. “Soil health and biodiversity below ground — the source of almost all our food calories — has been largely neglected by the industrial agricultural revolution of the last century.”
Intensive and potentially unsustainable agricultural practices — overuse of chemicals, reliance on genetically modified organisms (GMO), large-scale planting of single crops to name a few — are the primary reason for the growing rates of soil erosion degradation.
Global food production is booming, especially in the U.S., which exports more agricultural products — soy, corn, beef, dairy — around the world than any other country. Exports in 2021 reached a record $177 billion, produced on more than 2 million farms occupying about 900 million acres, according to the U.S. Department of Agriculture (USDA).
The planet’s success in boosting food production has its share of downsides: fertilizers pollute streams, transporting food to distant markets burns growing quantities of fossil fuels, and intensive agriculture practices are degrading soils. That last part is where soil amendments come in.
Among farmers’ tools like harvesters and irrigation systems are soil amendments, also known as conditioners. Farmers, and gardeners, add amendments to boost soil’s water retention, permeability, drainage, aeration and structure. Some are organic like manure and mulch while others are inorganic, such as sand and minerals.
Market Trends & Components
Increasing awareness of soil health pushing demand for soil conditioners
Global population growth, increasing crop demand, and decreasing arable land are fueling growth of the soil amendment market:
The market’s rapid growth is driven by increasing awareness of soil health management, easy availability of agricultural raw materials, and strong demand for high value crops such as fruits & vegetables.
Soil amendments cost about 3 cents per square foot for farms, or 35 cents a square foot for gardens.
Soil amendments are sold as either organic or inorganic:
Organic soil amendment examples are: compost, biochar (charcoal), aged manure, wood ash, hay, peat moss, and more.
Inorganic soil amendment examples are: gypsum, lime, sand, perlite, and more.
Market Movers: Heavy Hitters, Fast Followers
A mix of multinational chemical firms and regional companies make up the conditioners market
Heavy Hitters:
Founded in 1865 , BASF is a German chemical company operating 232 production sites in 90 countries.
Its agricultural products boost soils’ abilities to retain water and use nitrogen effectively.
Germany’s Bayer AG and Pluton Biosciences of St. Louis agreed in 2021 to jointly develop a soil amendment that pulls carbon from the air while boosting soil nutrients.
Philadelphia-based FMC, with a $16.5 billion market capitalization, sells a soil amendment called VGR that it blends with an insecticide for corn planting. VGR contains a beneficial bacteria that boosts roots and aims to increase yields.
Brussels-based Solvay sells agricultural products including Ixper, which it says “boosts oxygen levels in the soil, encouraging the development of microorganisms.”
Norway’s Borregaard makes soil conditioners under the BorreGRO brand.
Fast Followers:
A mix of large and small companies sell soil amendments in addition to the multinational chemical companies mentioned above. Some are regional, focused on small farms and gardens, while others sell products for commercial farms nationally and globally. A sampling of North American firms includes National Carbon Technologies in Michigan, Locus Agricultural Solutions in Ohio, Sun Gro Horticulture of Massachusetts, Quebec’s Lambert Peat Moss and Acela Biotek in California.
What's the Impact of Soil Amendments?
Soil amendments’ role in sustainable agriculture includes improving the soil quality and yield of existing farmlands, restoring degraded cropland and conserving soil for long-term usage.
Agriculture uses more water than any other industry or purpose in the world, with irrigation accounting for 70% of water use worldwide. Conditioners aim to boost soils’ ability to retain water and improve root health, which may reduce water demand.
In one study, conditioners like oyster shells, biochar and lime improved the diversity in the so-called rhizosphere, which is essentially the soil-root interface.
Venture Capital/Private Equity
Investing in soil health may require an unconventional approach and may be as much about passion as it is for portfolio. A search of the internet will turn up initiatives like the Soil Investment Hub, run by Geneva-based World Business Council for Sustainable Development. Impact investors including Europe’s Triodos Investment Management, with EUR6.4 billion under management, are investing in efforts to restore and prevent the degradation of soils.
Final Thoughts & Investment Outlook
“What we are facing now is soil extinction,” the Indian yogi Sadhguru said before setting off on his 30,000 km motorcycle journey from London to India in early 2022 to raise awareness of soil loss.
Save Soil
Indian yogi Sadhguru (Jagadish Vasudev) began a 30,000 km motorcycle tour in early 2022 to raise awareness of the threats to the world’s soil.
Meanwhile, in an effort to rally spending for soil restoration, the U.N. has called for “redirecting public spending towards regenerative land management solutions.”
Some investors have heard and are taking action. The soil amendment market remains primarily an alternative class investment. Growth opportunities will be driven as the climate continues to warm to the detriment of soil, compounded by rising populations, food demand and the use of unsustainable farming techniques.
There is a wide range of investment opportunities involving soil amendments. Private equity investments are financing companies focused on inputs such as compost and other chemical-free soil amendments due to their environmental outputs. Companies like SymSoil, a California start-up that’s raised about a half-million dollars from investors, and Wisconsin’s Midwestern BioAg, which has taken in nearly $50 million, are showing that the sector is able to attract money.
Despite these opportunities, the soil amendment market remains volatile due to its size and saturation, consisting of large publicly traded companies and early stage start-ups. Changing political policies also impact the market.