Tag Archives: chat
Q&A with Steve Yuzpe of Sprott Resource Corp Discussing Agriculture and Water
“There is absolutely no substitute for water at any price” – Steve Yuzpe Ideas get bigger when you share them… New York, NY, Point Roberts, WA – September 18, 2013 (Investorideas.com Water Stocks Newswire) Investorideas.com, an investor research portal specializing in sector research for independent investors including water and agriculture stocks issues an exclusive interview with Mr. Steve Yuzpe, Chief Financial Officer at Sprott Resource Corp. Mr. Yuzpe provides insight into global trends and opportunities within the sectors. Q: Investorideas.com Where do you see the biggest opportunities in agriculture and can you give us some of the publicly traded companies you like? A: Steve Yuzpe of Sprott Resource Corp Sprott Resource Corp. is the private equity group within the Sprott Group of Companies … so public stocks are not my specialty. That said, the Ag sectors that we like are fertilizers (especially phosphate), healthy food themes and water Q: Investorideas.com Outside of traditional agriculture companies and related suppliers like seeds, fertilizer and transportation do you see agriculture getting more into technology, for example water management and treatment technologies within the actual umbrella of an Ag company? A: Steve Yuzpe of Sprott Resource Corp Yes. I think technology and water management will be very important sub-sectors within the agriculture sector. Technology: has to be part of the solution to deal with the increase in primary production required to feed the planet in the next 40 years. The population will grow by 40 – 50%, but the global grain and oilseed production will need to increase by 80 – 100%. Technology will impact every aspect of primary production (for example, off the top of my head, seed genetics, variable rate farming, farm machinery (smart, auto-steer seeding units), efficient / secure storage, water extraction, enhanced food preservation, etc.) Water: 70% of global water use is from agriculture and significantly more water will be required to increase global production. Improvements in technology, awareness and conservation are all part of the solution. There is absolutely no substitute for water at any price. Q: Investorideas.com How do you see the global eating trends of organic, vegetarian and vegan impacting agriculture, for an example the growing shift from sugar to alternatives like stevia? A: Steve Yuzpe of Sprott Resource Corp The trend in wealthy countries is an increase in ‘healthy diets’ … I think the themes of organic, hormone free, antibiotic free, nitrate free, grass fed, etc. are poised to gain mindshare of consumers, which should lead to investment opportunities. Q: Investorideas.com I have read that countries in the Middle East and China have bought up agricultural lands with water rights globally in anticipation of drought and bigger issues in food supplies from climate change. How will that impact the global picture long term? A: Steve Yuzpe of Sprott Resource Corp The counties you mention have to deal with the very real threats of food security and food inflation. The rise in commodity prices has already contributed to the overthrow of regimes in the Middle East and in the last 5-years has led to riots across from Bahrain all the way to Morocco and is driving up costs in China and India. The way that water is priced and managed globally leads us to believe that localized water shortages are inevitable. As mentioned above, Canada is lucky that we have significant water resources. Opportunities exist because agriculture is facing serious issues in the near and long-term. We will likely solve some of the issues we are facing, but I don’t see how we can solve them all. The long-term impact is tough to predict. All over the world there has been a strong pushback against foreign buyers of farmland. Q: Investorideas.com Are you looking at South American opportunities and if so where? For example I published an article from another writer recently entitled “It’s a good time to buy land in Argentina”, based on falling coffee and sugar prices . A: Steve Yuzpe of Sprott Resource Corp We like certain jurisdictions in South America and would definitely avoid others. Our investment style considers geopolitical risk, currency risk, etc., in addition to return profile of the investment. For example, we have a large position in Union Agriculture Group, a large farming operation in Uruguay. We also have a large position in Stonegate Agricom, which has a phosphate deposit in Peru. Q: Investorideas.com What will be the driving force to get more investors into agriculture and water? Do you think like a lot of other sectors, that it will be event driven (water shortages, drought, and contamination) or simply pocket book related as prices rise? A: Steve Yuzpe of Sprott Resource Corp The agriculture segment is much smaller than other investment sectors. To bring more investors into the sector, we also need to build and develop more companies and products to invest in. It could legitimately be from either event driven or market driven (inflation protection) event, but likely it is from a linked event. A geopolitical or production crisis (weather, etc.) would start prices to rise and fear and greed would exacerbate the price moves. Q: Investorideas.com Where do you think Canada fits into the global market? A: Steve Yuzpe of Sprott Resource Corp Long term, Canada has a very important role to play in primary food production … a large arable land base, already a net exporter of production (with a small population, so little chance that production will be held back from export in a food crisis), significant water resources, geopolitical stability, infrastructure is in place, experienced farmers and a system of strong food safety standards. About Steve Yuzpe, Chief Financial Officer Mr. Yuzpe has over 10 years of financial administration management experience with public and private corporations. Over his career, Mr. Yuzpe has developed specific expertise in financial and internal reporting, strategic development and business planning, corporate governance, investor relations, regulatory compliance, treasury, financings and restructurings. Since 2009, Mr. Yuzpe has served as the Chief Financial Officer of Sprott Resource Corp., and is currently the chairman of One Earth Farms Corp., as well as a director of One Earth Oil and Gas Inc. Mr. Yuzpe has also been involved with Street Kids International, a charity focused on youth at risk, as the Treasurer, member of the Executive Committee and Board of Directors for more than 10 years. He was also a founding board member of Inroads to Agriculture Institute, an organization whose mission is to help Aboriginal people secure full time employment in the agricultural industry through training and employment support. Mr. Yuzpe holds a Bachelor of Science, Engineering (Mechanical) degree from Queen’s University along with the Professional Engineering designation (P.Eng.) and a Masters in Business Administration from the Richard Ivey School of Business in London, Ontario. Mr. Yuzpe is also a Chartered Financial Analyst (CFA) charter holder. Continue reading
Sustainable Forest Innovations Revitalize Hard Hit Communities
By Charlie Spies, CEO CEI Capital Management LLC From Maine to Georgia to Arizona to Oregon, new forest-based enterprises are coming on line with financial support from New Markets Tax Credits every day. These tax credits provide incentives for private investors to fund projects that create or preserve jobs and diversify economies in distressed communities. The result is re-invention and job creation within the supply chain of an age-old industry: growing new forests, sustainably harvesting and moving the timber, and then processing it in 21 st century ways by breaking down the trees into fiber and even into molecules with a variety of potential uses. For instance, this month in rural Berlin, NH the first delivery of sustainably harvested wood to the Burgess Biomass Plant marked a milestone in the evolution of the region’s forest-based economy. On track to come online by the end of the year, it is a prime example of next generation forest utilization as an economic engine. The plant is built on the site of a defunct paper mill, where it will produce 75 megawatts of power, sustain 40 jobs in management and plant operations, plus spur hundreds more jobs in the woods associated with harvesting and transporting biomass. The project received $64 million in New Markets Tax Credits, which attracted private investors to participate. Congress first established New Markets Tax Credits in 2000 to stimulate investment and economic growth in low-income and underserved rural and urban communities that are often overlooked by conventional capital markets. Investors receive 39 percent federal tax credit over seven years as incentive to finance businesses and economic development projects in these distressed communities. The New Markets Tax Credits program has been the impetus for projects on the cutting edge in the forest product industry over the last decade. The program has allowed for millions of acres of timberlands to be managed as sustainable forests available for both industrial and recreational use, as well as creating jobs through continued innovation in the use of forest products from high speed lumber manufacturing, to composite material manufacturing, to cellulosic fuel. These targeted private capital investments are helping to reinvent local economies and protect their future viability using environmentally sustainable practices. New Markets Tax Credits helped Westervelt Company to fund a new wood pellet manufacturing plant in rural Alabama, where nearly half the population lives in poverty and unemployment is greater than ten percent. The plant will produce 280,000 metric tons of wood pellets for use as an alternative fuel source around the world. This project has so far created 45 permanent jobs while assuring demand for locally produced timber and the people that harvest and transport that wood. Alternatively, the Appalachian Mountain Club’s (AMC) Maine Woods Initiative uniquely combines recreation, natural resource protection, sustainable forestry, and community partnerships. By encouraging nature-based tourism, the project is creating jobs: logging crews are busy at work supplying local paper mills while three traditional sporting camps are staffed to welcome visitors, and professionals are employed to manage nearly 70,000 acres of timberland, not to mention the ripple effect in the local economy. The AMC’s purchase of this working forest for conservation and continued public use for both forestry and recreation was supported through New Markets Tax Credits valued at approximately $16.5 million. Further, with cutting edge research and development at the molecular level, ZeaChem Applied Technology in Oregon is using its “know how” to produce fuel and other valuable chemicals from low value wood. The work was made possible with New Markets Tax Credits, employing chemical engineers and researchers while developing green energy. If you believe your project is a candidate for New Markets Tax Credits, your best first step is to speak with a professional who understands the program and can help you understand how you need to structure the financing, corporate ownership and other considerations necessary to qualify. There are a variety of banks that are experienced in this sort of community development, as well as the qualified Community Development Entities (CDE’s) like CEI Capital Management, who administer the program. Charlie Spies is CEO of CEI Capital Management which creates and preserves jobs and improves quality of life in rural, low income communities by providing access to project capital through New Markets Tax Credits. Over 10 years CEI Capital Management has placed more than $658.8 million in 74 different projects across the U.S. In addition to fiscal soundness, CEI Capital Management evaluates each project according to its benefit to the local community, economic gain and positive impact on the environment. It is a wholly owned subsidiary of CEI, the Maine-based nonprofit community development financial institution which was among the founders of this important federal economic development program. For more information, visit http://www.ceimaine.org/CCML Continue reading
How Farmland Became Canada’s Hottest Real Estate Market
JEFF RUBIN The Globe and Mail Published Wednesday, Sep. 18 2013 Buy land, advised Mark Twain, because, as the punch line goes, they ain’t making any more of it. Fast forward to 2013 and that advice, as a look at prices for farmland shows, seems as prescient as ever. As any farmer will readily tell you, the agriculture business has had a tough run. Agriculture was once an economic mainstay. Turn back the clock to 1950 and the sector employed nearly a fifth of Canada’s work force. Today, agriculture accounts for less than 2 per cent of the country’s employed workers, while its share of gross domestic product is also a shadow of what it once was. Farm prices have languished for decades, as Canada’s population has shifted from rural to urban. By the 1990s, North America was losing two acres of productive farmland to development every minute. How the world has changed for Canada’s farmers in 2013. The hottest sector of the country’s real estate market is, you guessed it, farmland. The price of farmland in Canada has outpaced both residential and commercial real estate, gaining an average of 12 per cent over the last five years. In some hotspots, such as southwestern Ontario, the price-per-acre has been going up by as much as 50 per cent a year. Even pension plans and hedge funds have become players in the pursuit of prime agricultural land, interest that is only sending prices that much higher. If global food prices are any indication, such investments could be a solid bet. Over the last decade, global food prices have more than doubled, according to the United Nations FAO Food Price Index, which tracks monthly changes in prices for international food commodities. The food riots stemming from that price inflation were part of the spark that set off the Arab Spring. So far this year prices have been falling, but they still remain within shouting distance of the record highs reached in 2011. The strength in global food prices is no accident. The growth in global food demand is unrelenting. Part of the reason is due to population growth. The world is at 7-billion people and counting. But that’s not the only thing straining food supply. World grain demand has also soared, as households in fast-growing Asian countries trade in rice bowls for cheeseburgers. It takes seven pounds of grain to raise a pound of beef. That’s a whole lot more than it takes to make a loaf of bread. The newfound economic clout in emerging economies such as China and India, which between them have roughly 2.5 billion people, has allowed more people to diversify their diets. In turn, global meat consumption has bounded ahead at double the rate of population growth over the last two decades. All that demand for protein bodes well for the world’s breadbaskets. That is if Mother Nature doesn’t get in the way first. A severe drought a few years ago forced Russia, the world’s third largest producer of wheat, barley and rye, to suspend grain exports for nearly a year. Before that a drought in China caused a spike in grain prices that affected everything from the price of pasta in Italy to the cost of tortillas in Mexico. Closer to home the US Midwest has been grinding through one of the worst droughts in more than half a century. Climate change scientists warn that droughts and other agricultural shocks will be even more common in the future. Against a backdrop of climbing temperatures, Canada sits in an interesting spot. With a wealth of arable land and 7 per cent of the world’s fresh water, Canada’s agricultural potential is considerable. It’s also possible the amount of land under cultivation in Canada could actually increase as global temperatures continue to rise and the wheat belt climbs farther north. Could it be that in the coming years we’ll also see farmers actually start reclaiming acres from far-flung suburbs? The idea is much more plausible now than it was only a few years ago. It was depressed farm prices that allowed prime agricultural land to be paved over in the first place. As food becomes more precious and more expensive, it will only add to the market forces that will push some of those farms to come back. Jeff Rubin is a former chief economist of CIBC World Markets and the author of the award-winning Why Your World Is About To Get A Whole Lot Smaller as well as The End of Growth. Continue reading
