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The Spoon

Daily news and analysis about the food tech revolution

future of farming

High Tech Farmer AppHarvest is Rapidly Running Out of Money

Kentucky-based controlled environmental agriculture company AppHarvest has warned in its latest financial report that it only has enough capital to continue operations into the first quarter of 2023.

According to its quarterly report filed on November 7th, the company says there is “substantial doubt” about its ability to continue as a going concern unless it can raise additional outside capital.

As of September 30, 2022, we had $36.2 million of cash on hand, and an accumulated deficit of $270.6 million. In October 2022, we entered into a $30.0 million note and loan agreement with Mastronardi Produce-USA, Inc. (“Mastronardi USA”) and received $15.0 million upon execution. In November 2022, we initiated a third restructuring plan to further reduce operating costs and our losses. Despite these actions, management believes there is substantial doubt about our ability to continue as a going concern and absent additional sources of financing, we expect that our existing cash and cash equivalents will only allow us to continue our planned operations into the first quarter of 2023

According to a story in the Kentucky Herald-Leader, the company needs $85 to $95 million in cash to fund operations for the next 12 months. That’s a lot of new capital in a market where raising new money has become increasingly difficult.

AppHarvest is looking at a few strategic options, including selling Berea farm to its primary distribution partner  Mastronardi Produce Limited (the same company it borrowed funding from to launch the first 5 acres this past month). They are also talking with potential acquirers according to AppHarvest CEO Jonathan Webb.

“There are large conglomerates in auto manufacturing,” Webb told the Lexington Herald Leader. “I mean, look at GM, for example, and all the different auto brands inside of GM. So yeah, we’re actively having conversations with CEOs, with investors, with partners, with anyone who wants to partner with us here in Kentucky and to help make our mission succeed.”

The company’s current situation is a far cry from its early days when it was seen as one of the brightest lights of the CEA farming world. And while the company’s massive capital needs show a potential downside of building automated indoor farms – especially compared with more traditional farms that take significantly less capital to build and run – it’s worth pointing out other high-tech indoor farmers like AeroFarms and Bowery are continuing to thrive and find new partners.

As we wrote a couple weeks ago, the company’s new farm in Berea is impressive to watch in action and will no doubt produce a whole bunch of salad kits once the full 15 acres is operational. Let’s just hope the company can survive long enough to see it come to fruition.

Crispr Gene Editing Software May Dramatically Change Our Food — And Soon

Last week, the USDA ruled that organisms gene-edited by Crispr technology will not be subject to the same regulations as genetically modified organisms (GMO). US Secretary of Agriculture Sonny Perdue said that the USDA currently does not, and has no plans to, regulate plants or animals “that could otherwise have been developed through traditional breeding techniques.” In other words, Crispr-edited organisms are just as safe to eat as traditional ones.

If you don’t know about Crispr, it’s a buzzy new technology that allows scientists to delete, add, or modify genetic sequences with an organism, be that a plant, a turkey, or even a human. As you might expect, it has huge implications for the food system. Crispr technology can transform genetic codes to make crops or animals grow more quickly, taste better, or be more resistant to disease and harsh environments.

Genetic modification (as in GMO’s), by contrast, involves adding genes from organisms like bacteria into crops order to change plants’ properties. The differences may seem pretty minimal, but not to the USDA; Crispr-edited organisms are subject to much less regulation than GMO’s, which have to be approved by the FDA, the EPA, and the USDA before they’re allowed on shelves.

 

Source: Agri-Pulse

This is because the USDA views gene-editing with Crispr as a sped-up version of selected breeding. So instead of humans slowly selecting and growing only the juiciest apples over decades and decades, eventually creating an extra-juicy varietal, scientists can just do this in one go by editing the genome of the apple itself.

The U.S. isn’t the first one to be lenient on gene-editing technology. In 2017 Germany and Sweden ruled that gene-edited plants were distinct from GMO, and therefore should not be subject to the same regulation. Which gives scientists working on Crispr technology a lot of freedom to manipulate crops and meat animals, at least compared to those developing GMO’s.

So what does this mean for you and your dinner plate? To start with, Crispr will enable biotech companies to develop a whole slew of modified foodstuffs. Think wheat suitable for people with celiac disease, like they’re making at the Institute for Sustainable Agriculture in Spain. Or pigs and cows that grow more quickly and with fewer health problems, which they’re developing at the U.K. livestock company Genus Breeding.

Proponents claim that Crispr technology will be used to make food more nutritious, more resistant to adverse environmental conditions, and taste better. Anti-GMO advocates, however, aren’t so keen on the new technology. They view Crispr as just another form of genetic modification; which, to be fair, it technically is — just one that’s more efficient and effective than traditional GMO processes, and which doesn’t require a transplant from another organism.

As our environment degrades and it becomes harder to produce food, CRISPR could also hold the answer to feeding our population (which the UN projects will grow to almost 10 billion by 2050). By allowing scientists to create plants that are resistant to drought, increased temperatures, and poor soil, it could theoretically help increase crop yields despite the challenges of climate change. It could also extend products’ shelf life, reducing food waste from spoilage.

If this all sounds remote and unrealistically futuristic, it’s not; Crispr-edited foods could be in supermarkets sooner than you think. Ozy.com reported that DuPont Pioneer is currently creating a strain of Crispr-edited corn that they claim could be ready for planting as early as 2019. Genus also hopes to have their meat from their quick-growing cows and pigs on supermarket shelves in 5 years. So you might be able to purchase Crispr-edited pork chops and ears of corn by as early as 2023.

The USDA hasn’t yet decided if they will require companies to inform consumers which of their foods have been edited with Crispr, which they currently do for GMO’s. But stay tuned; they’re expected to release a decision by July. No matter which way they go, their recent decision not to submit Crispr to the same regulation as GMO’s means that they’re giving enormous freedom to gene-editing technology. We’ll have to wait and see if it lives up to the hype.