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CubicFarm Systems Announces Methane Reduction and Carcass Study Results and Corporate Update
Friday, August 12, 2022Company Profile | Follow Company
Langley, BC, August 12, 2022--(T-Net)--CubicFarm Systems Corp. (TSX:CUB), a leading local chain agricultural technology company, today announced the preliminary results of its methane and carbon dioxide-equivalent reduction study and beef finishing carcass study.
The Company also provided updates related to the Company's HydroGreen division and previously announced carbon commercialization program and a corporate update.
Study data indicates significant improvements in animal performance and a reduction in the environmental footprint of cattle, while providing compelling unit economics and payback period.
Study Highlights
Carcass Study
Carbon Study
Quantification of Value
Verra Carbon Standard certification can be used to monetize greenhouse gas ("GHG") emission reductions by converting them into tradeable carbon credits. The enteric methane reductions are understood to be categorized under the VM40001 methodology, which would allow for sales in carbon credit offset markets.
HydroGreen Patents Pending Issuance
HydroGreen has filed patent applications that protect its proprietary growing methods, including HydroGreen's indoor growing system hardware design. Over the past several months, HydroGreen has filed eight additional patent applications related to HydroGreen's process and benefits of sprouting grains, reducing methane in beef cattle, and improving fertility in cattle.
In addition to the Carbon Study and the Carcass Study beef data, previously announced research data demonstrated that feeding dairy cows HydroGreen fresh forage lowers methane emissions by approximately 24 per cent on a per unit milk output basis. HydroGreen continues to pursue further dairy studies to extend the addressable carbon commercialization for the dairy market.
Carbon Credit Opportunity
Global consumer demand for beef and dairy is expected to grow for the foreseeable future(2) as global living standards rise. To mitigate the environmental effects of increased global consumer demand for beef and dairy, livestock producers will need to invest in innovative solutions to reduce methane emissions from cattle, such as HydroGreen technology.
By pre-selling farm-based inset and offset carbon credits to organizations with net-zero goals, the Company believes it is ideally positioned to create recurring cash flow from operations and capture carbon credit streams as demand and value of carbon credits increase.
Premium Co-Benefits
In addition to the methane reduction from feeding cattle fresh forage grown in commercial scale AVPs, the Company identified premium co-benefits, including:
Dave Dinesen, Chief Executive Officer, CubicFarm Systems Corp.
"It isn't often that a globally applicable technology can both benefit the environment and drive performance increases supported by compelling unit economics," said Dave Dinesen, Chief Executive Officer, CubicFarms. "HydroGreen continues to prove its value as a leading livestock feed technology that not only significantly improves animal performance and delivers meaningful environmental benefits, but also positions us to enter the carbon credit market."
Corporate Update
The company said in a release that a total of 223 CubicFarm System and HydroGreen sales orders under contract that are pending manufacturing, installation, and site readiness, and are valued at approximately USD$30.7 million:
Geographic Territory | Country | Division | Number of Modules | Estimated Value (USD Millions) |
Expected Completion Date |
Indiana | USA | Fresh | 20 | 3.0 | 2022 Q3 |
New South Wales | Australia | Fresh | 19 | 2.7 | 2022 Q4 |
Manitoba | Canada | Fresh | 27 | 4.0 | 2023 Q1 |
British Columbia | Canada | Fresh | 26 | 3.4 | 2023 Q1 |
Montana | USA | Fresh | 21 | 2.9 | 2023 Q2 |
British Columbia | Canada | Fresh | 100 | 12.6 | 2023 Q4 |
Texas | USA | Feed | 10 | 2.1 | 2022 Q4 |
Total | 223 | 30.7 |
FreshHub Commercial Validation Project
CubicFarms has completed Phase I of its rapid project to achieve commercial validation of its larger FreshHub configuration using the CubicFarm System technology and approach, prior to the installation of the first FreshHub targeting the end of December 2023. Phase II is currently underway, with Phase III equipment being ordered for installation:
Intention | Target Commercial Outcome | Progress | |
Phase I | Proof of concept using latest CubicFarm System technology | Build and manufacture the FreshHub prototype modules | Complete |
Phase II | Validate produce output | Growing the volume of produce necessary at scale and quality to run a FreshHub operation | Targeting October 2022 |
Phase III | Validate commercial earnings | Validate operating model economics to run a FreshHub operation, targeting a return on invested capital of 20% | Targeting February 2023 |
About HydroGreen
HydroGreen's Automated Vertical Pastures™ technology utilizes a unique process to sprout grains, such as barley and wheat, in a controlled environment with minimal use of land, labour and water. HydroGreen's fully automated indoor growing technology performs all growing functions including seeding, watering, lighting, harvesting, and re-seeding - all with the push of a button - to deliver nutritious fresh forage for livestock without the typical investment in fertilizer, chemicals, fuel, field equipment, and transportation. Automated Vertical Pastures™ not only provide superior nutritious feed to benefit the animal, but also enables significant environmental benefits to the farm.
About CubicFarms
CubicFarms is a leading local chain agricultural technology company developing and deploying technology to feed a changing world. Its proprietary ag-tech solutions enable growers to produce high quality, predictable produce and fresh livestock feed with HydroGreen Nutrition Technology, a division of CubicFarm Systems Corp. The CubicFarms™ system contains patented technology for growing leafy greens and other crops onsite, indoors, all year round. CubicFarms provides an efficient, localized food supply solution that benefits our people, planet, and economy.
Footnotes
(1) Assumed value based on estimates of realized pricing. Wholesale market pricing for beef ranges from approximately USD$3.50 per kilogram. for ground beef to approximately USD$24.50 for choice grade tenderloin. Source: United States Department of Agriculture market news for the week ended August 5, 2022.
(2) Organization for Economic Co-Operation and Development (OECD).
This release may contain certain "forward-looking statements" or "forward-looking information" under applicable securities laws. Forward-looking terms such as "may," "will," "could," "should," "would," "plan," "potential," "intend," "anticipate," "project," "target," "believe," "plan," "outlook," "estimate," or "expect" and other words, terms and phrases of similar nature are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are based on certain key expectations and assumptions made by the Company. Although management of the Company believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. [ MORE ] |
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