On the inside pages of today’s Wall Street Journal is a half-page advertisement from BASF touting its ability to get “48 miles per kennel.” The claim is a clever bit of hyperbole, but it does hint at a promising future for the entire agricultural sector -- an area which, as fellow fool Matt Koppenheffer noted earlier this year, is already doing quite well.
A new tool: the supercomputer
For centuries, the agricultural industry has been adept at applying the latest advances in technology to improve both yield and productivity. There is no reason to believe that this trend will stop anytime soon, and one unlikely hero in this unfolding technological revolution will be the humble supercomputer.
Earlier this week, researchers at Sandia and Oak Ridge National Laboratories announced that they were developing an exascale computer. For those of you counting at home, an exascale computer will be 1,000 times faster than today’s petaflop computers -- which, as I explained in this piece, are already wickedly powerful.
Now, these supercomputers won’t be tilling the fields or harvesting crops anytime soon, but they will allow farmers to reap more from every kennel of corn and acre of land. This is because supercomputers are the engines fueling the new discoveries being made in the rapidly maturing field of genomics.
This past week brought two noteworthy breakthroughs. First, a team of scientists announced that they had completed a working draft of the corn genome. Among other things, this development is expected to lead to better crop varieties that can meet society’s growing demand for food, livestock, feed, and fuel.
Last week, I wrote about how agricultural scientists at DuPont (NYSE: DD ) had identified a key gene that boosts the yield of oil and oleic acid and explained how this could be a windfall to a company like Archer Daniels Midland (NYSE: ADM ) .
With the corn genome now unraveled, researchers will be able to take this advance many steps farther, including making corn both more nutritious and more efficient for ethanol production -- although not likely in the same cob. In addition to being a boon for large ethanol producers such as The Andersons (Nasdaq: ANDE ) and Poet Energy, this could also alleviate some of the tension over the “food vs. fuel” debate by allowing farmers to squeeze more ethanol from each bushel of corn.
Who needs the rain?
A second area in which genomics promises to yield some important breakthroughs is in the creation of drought-resistant crops. In a paper published in Nature this week, biologists at the University of California, San Diego, outlined how they have isolated a gene responsible for opening and closing the stomatal pores, which regulate water loss from plants.
This might not sound like that big of a deal, until one considers that plants under drought stress lose 95% of their water through such pores.
If successfully developed at a commercial scale by a company like Monsanto (NYSE: MON ) -- and this is still a big “if” at this time -- the advance could open up vast regions of the planet to productive farming. And because many of these crops will still need to rely on fertilizers and other chemicals to achieve maximum output, this could be a boon to companies like The Mosaic Company (NYSE: MOS ) and Syngenta (NYSE: SYT ) , which supply those materials.
Foolish bottom line
As significant as these advances are, I would strongly advise Foolish readers to keep an eye on the work of geneticist Craig Venter. At a presentation at the prestigious Technology, Entertainment and Design (TED) conference this week, Venter disclosed his potentially world-changing “fourth-generation fuel,” which (as you may have guessed) is being fueled by advances in genomics.
As Venter noted, he has 20 million genes which he can genetically reengineer to “eat” agricultural feedstocks and “excrete” pure fuel. If he is successful, agriculture could not only feed the world, it could fuel it.
Advances in genomics are going to impact a great many industries, including health care and pharmaceuticals. But for my money, if you’re looking for an industry that might look really good in “genes,” you should consider the agricultural sector.