When Even Corn Becomes High-Tech DuPont (NYSE:DD)

Agri-business may not seem an exciting or glamorous sector for investors to find opportunities, especially when compared to industries that come up with the whiz-bang consumer electronics and communications devices that have emerged to tempt our credit cards in the last few years. Just go to any national consumer electronics show and look at all the people wandering around mesmerized by all the glittering new gadgets on display, mumbling to themselves, “I’ve got to have that. I must have it now.”

But, whereas many of us do not need an iPod or GPS Navigation to find lasting happiness and fulfillment in life, it’s an absolute certainty that we all need to eat. And it’s pretty much a certainty that the global population will continue to increase, putting ever-greater demands on the world’s ability to produce enough food. A case in point is the process of using corn-based ethanol as an alternative fuel source. A few years ago this was thought to be a key contributor in reducing dependence on foreign oil, until analysts started to run the numbers regarding how much of the nation’s corn production would have to be diverted to making fuel in order to produce ethanol in sufficient quantities. It began to be clear the best use of America’s incredible agricultural production capacity was what it has always been–to feed people in the U.S. and around the world.

The Science of Growing More Food

Fortunately, a number of companies around the globe are harnessing science and technology to increase food production.  DuPont (NYSE:DD), a company that markets products and services in diverse sectors such as building and construction, communications, and transportation, also has a large presence in the development of agriculture and food technologies.

They have stated their commitment to focusing on meeting four emerging global trends, one of which is increasing food production.  You can learn more about their goals online at the DuPont Investor Center at www.dupont.com. Their stock is currently trading in the low 30’s, just about in the middle of their 52 week trading range of a high of $44 per share and low of $16.05. On their website they state: “Today’s DuPont is fresh, agile, streamlined…”

Sounds to me like they spend an inordinate amount of time in the corporate fitness center. Let’s get back to work in the lab. There’s a hungry world out there.

Seeds of Future Profits?

In the food production arena, one of DuPont’s specialties is a high-yielding hybrid seed corn. They have a patented Seed Production Technology, a non-invasive approach to seed production. Their “Pioneer Hi-Bred” business segment will have a pilot program of the technology in production seed fields in North America in 2010, with the first seed produced with the system ready for farmers the following year. They hope that within a few years the technology will result in more than $100 million annual cost savings due to productivity improvement.

Just Ask the Bees: It’s All a Matter of the Pollen

DuPont has estimated that ten percent of the cost of producing seed corn comes from “Pollen Management”, also known as “detasseling”, a cost that is eliminated by applying the company’s new technology, with its proprietary system for controlling pollen flow.

So next time you’re out in your garden observing the bees buzzing around the flowers, stop to consider you’re actually watching little high-tech workers in action.