By Peter A Nelson, Agro-Tech Communications
Throughout the course of 1999, the following 10 areas of development appeared to be the most consequential in relation to the emerging agri-fiber industry. Agri-fibers include abaca, bagasse, corn stover, flax, industrial hemp, kenaf, rice straw, switchgrass and wheat straw; with potential markets as varied as composites, specialty pulps, plastics and non-wovens.
I have summarized the year’s significant events, based on their ability to give us a perspective on trends that will likely be relevant in the future, while showing sustained growth and strength in 1999. In all cases, I have tried to portray direct relevance to the agri-fiber industry, while providing both the negatives and the positives as they occurred. All 10 developments are considered equally important, although I personally think that the internet has probably been the most influential and beneficial to the industry.
Since the mid-1990s, the internet and its use in marketing and business communication, has grown significantly on an annual basis. In October of 1999, Ag Fiber Technology News reported that a total of 29 percent of U.S. farms had internet access in 1998 versus 13 percent in 1997. In addition, 77 percent of farms with sales of $250,000 or more have access to a computer, with 52 percent having internet access. In the blossoming agri-fiber industry, the internet is quickly becoming the tool of choice to relay data, make sales and communicate project goals. Because the agri-fiber industry is still in its early stages, and spread out around the world, the internet has become the practical, low-cost solution to globally communicate about different materials, their characteristics and inherent logistical considerations. A host of internet services and websites started in 1999, including the Agro-Tech Communications site – agrotechfiber.com. These sites are performing tasks as varied as retail sales, research dissemination and interbusiness networking.
2. Mergers and Acquisitions
One of the most important stories of the year for the future of the agri-fiber industry was the continued mergers and acquisitions among major agribusiness corporations. By the end of 1999, CNH had become the new trading symbol for the largest agricultural tractor manufacturer in the world, formed in a merger of Case Corporation and New Holland. CNH will be based in Europe with US headquarters in Wisconsin. Monsanto worked on merging with Delta Pine throughout the year and sold Stoneville Seed to achieve regulatory approval for the merger. Monsanto recently dropped its bid for Delta&Pine, but is also reportedly considering selling off its agribusiness divisions to focus on pharmaceuticals. In Europe, Zeneca and Novartis split off their agribusiness divisions to form a new life sciences company, making it the largest in the world. Watch for continued agribusiness acquisitions and consolidations in 2000, while evaluating agribusiness purchases to ensure quality and sourcing.
3. Biotechnology (GMOs)
Biotechnology became a big topic in the United States in 1999, through worldwide activism against genetically engineered crops. Protests were staged around the world, with extensive media coverage of the WTO meeting in Seattle and in Washington at the end of the year. However, polls have continued to show that U.S. consumers are not responding to the anti-biotechnology campaign and are indifferent when making product choices. Legislation to require labeling of genetically engineered foods is currently being considered. Although the technology may require more research, there are extensive benefits that could emerge for the agri-fiber industry. These could include crops with higher cellulose content and other desired characteristics.
4. Aerospace Applications
NASA advancements in many technologies have achieved applications in the agri-fiber industry this year. New Holland, in conjunction with NASA, is developing robotic technologies for use in farm applications. Precision farming, the use of GPS/GIS to manage crop production, continues to grow at a rapid pace. In addition, some agri-fiber companies are using precision farming technologies to estimate yields, provide harvesting and handling data and supervise other parts of agri-fiber production.
5. Innovative Environmental Companies
Two major U.S. companies, Crane & Co. and Interface Carpet, continued to pave the way in environmental integrity and the utilization of agri-fibers in their products. Crane & Co., Inc. is the oldest paper mill in the United States and has been operating since 1801. In 1999, the company launched the Continuum line of environmental papers that includes paper made from cotton, industrial hemp and kenaf. Crane is the sole manufacturer of U.S. currency paper and is one of the only paper mills to receive ISO1400 certification in 1999. Interface Research Corp. is the largest commercial carpet tile manufacturer in North America. Their CEO, Ray Anderson, is developing a world-renowned reputation for environmental integrity within industry. Interface is developing many revolutionary processes including the introduction in June of 2000 a line of natural fiber carpet made from industrial hemp and other agri-fibers. The leadership of these two companies points to industrial trends of the future, as more companies begin to weigh the environmental benefits of agri-fibers in manufacturing.
6. Bast Fiber Processing & Products
In 1999, Geof Kime and his company Hempline Inc. became the first to produce and have commercially available industrial hemp fibers in North America since the 1950s. This development was followed by the introduction of quality textiles made from Hempline’s fiber. In addition, the entire bast fiber infrastructure in North America showed growing strength throughout the year with numerous processing facilities coming on line. Durafibre Inc. of Cargill Limited, Fibrex Ltd., Kafus, Kenex Ltd., Kengro Corp. and others are processing flax, kenaf and/or industrial hemp bast fibers. Kafus recently completed construction of a $35 million facility in Indiana to produce automobile components from kenaf fibers. Breakthroughs in enzyme processing, steam explosion and mechanical processing were achieved throughout the year.
Cotton joined the other commodity crops (corn, wheat and soybeans) in suffering from low prices and drought conditions in 1999. The USDA continues to lower crop estimates as the full ramifications of the production year become known. The only positive from the otherwise bleak reality, is that farmers are going to be forced to find innovative and sustainable solutions. In a special feature on cotton in December 1999 issue of Progressive Farmer, farmers were advised to consider better insect management, cover crops, innovations in irrigation and better business management to improve their 2000 crop. In addition, new technologies such as UNR cotton, precision farming and diversified management could provide benefits as farmers look for new ideas. An increase in the production of no-till cotton will probably be seen in 2000 in an effort to build organic matter and preserve moisture.
8. Industrial Hemp
Under the leadership of the North American Industrial Hemp Council (NAIHC), industrial hemp has gotten a national spotlight. Featured stories in favor of producing the crop have appeared in national magazines, the New York Times, Washington Post and USA Today. The NAIHC has successfully, helped build coalitions in several states that have led to legislation supporting industrial hemp. On December 14, 1999, these efforts paid off when Hawaii became the first state to plant test plots of the crop and North Dakota passed legislation to produce the crop in the state.
9. Agricultural Biomass
The harvesting and handling of agricultural biomass from crops such as switchgrass and agricultural residues from corn, rice and wheat, showed significant progress in 1999. The U.S. Department of Energy released significant funds for research in this arena, while President Clinton signed an executive order on August 12 to promote the growth of the biomass industry. Several initiatives are currently coming together that would utilize switchgrass and other materials FOR bioenergy. Companies operating on the West Coast got added benefits from helping states such as California comply with non-burning regulations. In California, for example, rice straw burning will be completely phased OUT in a couple of years. The California Air Resources Board awarded grants averaging over $500,000 to companies including Arkenol Holdings LLC, Century Board and Louisiana Pacific.
10. AARC, USDA
Funding for the Alternative Agriculture Research and Commercialization Corp. (AARC), part of the USDA, was cut in the last quarter of 1999. The AARC has provided financial resources in the form of investments in companies utilizing agricultural fibers such as Kengro Corporation, Primeboard Inc. and Vision Paper. An example of one of the only government programs ever initiated that could offer a return to the taxpayer, funding for AARC was cut based on politics and Washington’s usual short term, bandaid solution approach to agriculture policy. The loss of AARC Corporation will directly affect the ability of new companies to develop agri-fiber products and will directly hurt the long-term profitability and competitiveness of our nation’s farmers.
These 10 areas of development, with some negatives, show tremendous potential for growth in the years to come. Slowly but surely, an infrastructure is being constructed, new technologies are coming on line, and products and energy are being created from agri-fibers. I expect that 2000 will continue to see rapid growth. Invariably, there are some things left off that should be included on this list.
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