Despite the company being publicly traded for almost 30 years, you may not be familiar with Bion Environmental Technologies Inc. (BNET:OTCQB). The firm is a niche agricultural tech company with a focus on developing sustainable solutions for environmental issues in livestock agriculture.
Bion has focused on developing patented technology that provides advanced waste treatment and resource recovery for large-scale livestock production facilities (also known as Concentrated Animal Feeding Operations or CAFOs), which, as many environmentalists can tell you, are some of the more polluting elements of modern large-scale agricultural production.
Bion Environmental Technologies' third-generation tech platform (Gen3 Tech) can mitigate environmental problems, while simultaneously improving operational and resource efficiencies by recovering high-value co-products from CAFOs' waste streams.
The tech is designed to capture and stabilize the various components of the effluent, converting them from liabilities into assets, including renewable energy, fertilizer products, and clean water, all key aspects of raising verifiably sustainable livestock.
The company is also focused on developing markets and distribution partners for its sustainable animal protein products and the low-carbon and organic fertilizer products it captures and upcycles from the waste stream.
The Catalyst: Controlled Steady State Ammonia Recovery at Scale
On September 19, Bion Environmental Technologies announced that its proof-of-concept ammonia recovery system at its Fair Oaks commercial scale demonstration facility had achieved and maintained controlled steady-state operations.
The release stated, "When at steady state, the system produces an ammonium distillate (solution), the base of Bion's nitrogen fertilizer products. Bion has begun optimizing the system's operating parameters so that it will meet Bion's economic models for large-scale commercial projects."
The release anticipates at least four to eight weeks for optimization, after which time the final design for commercial projects can begin.
Technical Analyst Clive Maund addressed the stock on August 24, 2023, writing, "This looks like a good point to buy Bion Environmental Tech which, after being in a downtrend for much of this year, hit bottom in mid-July when it briefly touched $0.90 as we can see on its latest 3-month chart."
The Ammonia Recovery System (ARS) at the core of the Gen3 Tech platform recovers, stabilizes, and upcycles the problematic ammonia-nitrogen in the waste stream, minimizing its environmental impacts and creating organic and low-carbon nitrogen fertilizer products.
Today, raw waste is spread on fields for its fertilizer value; however, most of the ammonia volatilizes or runs off to contribute to groundwater nitrate contamination, harmful (some toxic) algae blooms and dead zones, and formation of PM2.5, small particulate air pollution.
The release continued, "In the next few weeks, Bion intends to produce ammonium distillate at Fair Oaks in several concentrations and apply for organic certification for each product. Bion will also produce a solid/granular water-soluble nitrogen product that is climate-smart — a pure nitrogen fertilizer with a low carbon footprint that can be easily shipped and is readily available to plants."
The company has applied to several state agencies to certify the granular product for use in organic production.
Company CEO Bill O'Neil said the company is "Very pleased with system performance at Fair Oaks, and to be back in control of our timelines. Over the next few weeks, we will conduct demonstration tours with key stakeholders in the beef industry, potential partners in distribution, banking, and project finance, and others as we establish the strategic relationships needed to develop commercial projects."
Why This Industry? Green Concerns are Global
O'Neil continues, "Today, many are focused on climate impacts, but we believe the larger issue with livestock is ammonia, which is of increasing concern in the U.S., especially in California and Washington."
"In the EU, a nitrogen cap has already led to social and political unrest in Ireland and the Netherlands. We think the value of being able to upcycle and redirect that ammonia so that its nitrogen can be used where and when it is needed cannot be overemphasized."
Indeed, nitrogen has become a serious agricultural and environmental concern in many developed economies, especially those producing feedlot animals. As a 2022 article in MercoPress warns, "Farmers in the Netherlands are revolting over the government's plan to drastically reduce nitrogen emissions by 2030."
"This plan, as announced in practice, means that, in certain areas, farmers have to reduce their nitrogen emissions by 70%," explains Marcel Crok, a Dutch science writer and co-founder of the Climate Intelligence Foundation. "That means they simply have to quit."
"Most investors are familiar with the meteoric rise (and subsequent fall) of plant-based meat companies over 2021 and 2022," Penny Queen explains. "I believe the lesson to be learned from it is two-fold: there is a great demand for alternatives to current farming practices, and there is still a massive demand for animal proteins. A recent survey by Midan Marketing showed that 62% of American consumers purchase premium beef."
"I see BION being a steady grower over the next few years."
However, with access to ammonia control practices and technologies like Bion's, that might not be the case.
The article notes that "The proposal to sharply cut nitrogen emissions is tied to a 2019 Dutch court decision forcing the nation's government to take more aggressive measures to curb nitrogen emissions. The Netherlands, though, has heavily regulated agriculture emissions since the 1990s, and farmers have largely complied with such rules."
"The Netherlands emits a large quantity of nitrogen because of its massive agriculture industry, which accounts for about 87% of the country's 124 million kilograms of annual ammonia emissions, a U.S. Department of Agriculture report showed. The nation exported US$26.8 billion worth of food products despite having a relatively tiny population compared to other major producers, according to World Bank data."
"It is not very rational to curb Dutch agriculture if you realize that they have the highest production per acre in the world and therefore the environmental load per kilogram of food is lower than elsewhere," explains Simon Rozendaal, a Dutch journalist and chemist.
Of course, the Netherlands is only one country facing the harsh environmental reality of industrial-scale agricultural production. Ireland, likewise, has farmers in its crosshairs.
On September 7, writing for Tri-State Livestock News, Chris McCullough reported that "Dairy farmers in the Republic of Ireland say the government does not care for the agriculture industry after threatened cuts to the country's nitrogen derogation levels were imposed."
"According to the National Trust for Ireland, the Nitrates Derogation is a license to spread more organic nitrogen per hectare on land than is routinely permitted under the Nitrates Directive. According to the text of the Directive, organic Nitrogen is livestock manure applied to the land each year, including by the animals themselves."
"The current derogation limit of 250 kg/ha was due to expire on January 1, 2026, but Ireland's failure to improve water quality has forced an EU reduction to 220 kg/ha. This new level is set to commence on January 1, 2024, in some areas, affecting around 3,000 farmers, ultimately forcing them to reduce cattle numbers or find more land to rent."
"Dairy farmers are furious and have blamed the government for putting the future of Ireland's multi-billion euro dairy industry in jeopardy."
Clearly, this is a cross-jurisdictional international issue that will continue to plague producers well into the future. Alleviating the environmental stress food production causes while allowing countries to maintain viable herd sizes is an important social, structural, and food security goal, one in which Bion Environmental Technologies could play a significant role. More so, could certain regions of the U.S., where overconcentration has already led to profound impacts on local and downstream ecosystems, be next?
Why This Company? Proven Tech, No Competition
With the announcement of its successful startup at its Fair Oaks commercial scale demonstration facility, Bion Environmental Technologies has taken a big step in leading the fight to stop and reverse the environmental damage caused by CAFO facilities. When asked about competitors and comparable businesses, CEO O'Neill wasn't able to name any other firm working on the same problems in the same manner.
"I don't know of any true competitors," he explained, "unless you want to count macro industry competitors, such as plant-based proteins, cellular meat. On the clean water side, Varcor/ Sedron Engineering has a tech that works for dairy but has limitations we can help with."
"As far as the US$66 billion U.S. beef industry? No one else has developed a comprehensive solution for that sector of the livestock industry. We are unique."
Why Now? Inflection Point From R&D to Sales
Bion Environmental Technologies could be said to be at a sweet spot right now. The company is transitioning from decades of research and development into full-swing commercialization, and all the things that come with that transition –team building, establishing partnerships and strategic alliances, as well as expanding the board, completing a private placement, and retaining an investment banker, all with the goal of uplisting to a senior exchange.
Technical Analyst Clive Maund addressed the stock on August 24, 2023, writing, "This looks like a good point to buy Bion Environmental Tech which, after being in a downtrend for much of this year, hit bottom in mid-July when it briefly touched $0.90 as we can see on its latest 3-month chart."
"Since hitting this low, it has stabilized in a triangular pattern that comprises the latter part of what is believed to be a Head-and-Shoulders bottom, with the Left Shoulder forming in mid-June. A big reason that a valid H&S Bottom is believed to have formed is the strong volume pattern since July, with most of the volume in recent weeks being upside volume, which is why the Accumulation line has risen in a robust manner and the dissipation of downside volume."
"On the long-term 3-year chart," Maund continued, "We can clearly see why this is a good point for Bion to turn higher again as the downtrend from early this year has brought it back down to a zone of strong support close to long-term cyclical lows and this also shows us another attribute of this stock, for as we can see it has the habit of occasionally erupting into steep and spectacular rallies that are then followed by ‘cooling off' periods in long and tedious downtrends."
"Right now, it looks like it will soon break out into a possible rocket move, and if anyone who buys in this area is fortunate enough to catch such a move, it will probably be prudent to take profits if it should make it to the resistance at the top of the broad channel shown on this chart. Bion Environmental Tech is therefore rated a strong buy here for all timeframes."
Writing in January of this year, Penny Queen was equally optimistic about the company's long-term prospects. "What really sticks out to me about their latest announcement is how it ties Bion to Walmart. The company has been careful with its words, but you don't have to look very deep to see the connection."
"Bion is now planning a 45k head project with Olson Farms/TD Angus. It is worth noting that Olson Farms/TD Angus is a founding member of Sustainable Beef, LLC, a rancher-owned, US$325 million packing plant being developed in North Platte, NE."
"Walmart just announced an equity investment to buy a minority stake in Sustainable Beef, LLC. Connecting the dots seems pretty easy here. It looks like Walmart is showing that they have sufficient demand for a premium product and want to secure its distribution. In late September, Bion added Bill Rupp to its Advisory Group; he also happens to be a principal of Sustainable Beef, LLC., a former president at Cargill and JBS, two of the world's top three meat packers."
"Most investors are familiar with the meteoric rise (and subsequent fall) of plant-based meat companies over 2021 and 2022," Penny Queen explains. "I believe the lesson to be learned from it is two-fold: there is a great demand for alternatives to current farming practices, and there is still a massive demand for animal proteins. A recent survey by Midan Marketing showed that 62% of American consumers purchase premium beef."
"I see BION being a steady grower over the next few years."
Ownership and Share Structure
About 44% of the company is held by management and insiders and about 5% by strategic investors, Bion said. The rest is retail.
The stock is covered by several newsletter writers, including Maund, Matt Badiali, and Chris Temple, editor of The National Investor. Click in the data box above to view more of what they are saying.
Bion has a market cap of US$60.36 million and 48.9 million shares outstanding. It trades in a 52-week range of US$2.30 and US$0.505.
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