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Harvest Minerals – What Happens Next!

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Strong test results open up grass market to Harvest Minerals – what happens next?

Yesterday saw Harvest Minerals jump to 16.8p after revealing that a series of government-approved tests had demonstrated the effectiveness of its flagship product, KPfertil, as a long-term remineraliser for signal grass. Total Market Solutions caught up with Harvest’s chief operating officer Mark Heyhoe to discuss how the firm plans to approach what could potentially end up being a significant new market for its products in Brazil.

Long-term benefits

The study compared a range of fertiliser options, including high-end commercial products containing Muriate of Potash and TSP, over two 40-day cycles in sandy and clay-rich soils previously used in agricultural tests.

It found that in like-for-like dosages, KPfertil will initially perform almost to the same standard as traditional fertilisers. By applying slightly more KPfertil, performance can be identical. As KPfertil is substantially cheaper than conventional fertilisers, Heyhoe told us there is a clear economic benefit in using Harvest’s product without having to compromise on effectiveness.

Most importantly, however, the tests also revealed that KPfertil is far more effective than traditional fertilisers over a longer-term basis, thanks to its slow release, long-term properties. Indeed, it demonstrated that the remineraliser releases phosphate and other nutrients into the soil in a more gradual way, finding that it was over ten times as effective as TSP in sandy soil after 80 days.

New market

According to Harvest, signal grass is the most widely used grass for pasture on Brazil, with over 40m hectares planted. However, Mark Heyhoe, COO at Harvest Minerals, told Total Market Solutions that a lack of fertiliser options in the country means the yield per hectare for cattle across this land is currently very low compared to the US.

He believes that KPfertil’s slow-release properties make it a perfect solution for this dynamic, meaning this week’s results could open a vast new market for the firm:

‘These results clearly demonstrate KPfertil’s effectiveness as a long-term fertiliser. Traditionally, when a lot of this arable land is fertilised a lot of the product gets washed out immediately, meaning it is not working throughout multiple cycles or must be topped up every month. Whereas traditional fertilisers like potash give immediate impact, KP Fertil releases over time. It also improves the quality of the soil because it is a remineraliser. Crucially, this means it is more cost effective and efficient for cattle farmers, allowing them to put more cattle on each hectare of their land and make it a lot more productive

So, how does Harvest plan to move forward in the signal grass market?

In today’s update, the company said it has already secured several small orders in the sector. But Heyhoe tells us the firm expects this take-up rate to increase as it uses the latest results to develop and implement its market strategies to local graziers:

‘We have been talking to people on a small scale before about using KP Fertil for grass and pasture, but having the results to back this up and show how effective KPfertil is against other fertilisers over the long-term gives us the ability to go out there and really begin to generate some serious interest.’

The business will also begin conducting a two-year long trial to demonstrate the long-term benefit of replacing traditional fertiliser with KPfertil for signal grass. Heyhoe expects this to continue providing it with more evidence of the remineraliser’s effectiveness, which is can continue to use in its sales and marketing efforts.

Next steps?

Today’s update is the latest in a growing line of strong announcements for the business. Recently, these have notably included a $2m order for KPfertil, government approval for the product, and a landmark strategic alliance. With the firm’s results coming up later this month, and a new source of potential newsflow now in the company’s war chest in the form of the signal grass market, it will be interesting to see where shares go next.

Our friend at IGTV Jeremy Naylor speaks to COO Mark Heyhoe about developments.
The author does not hold shares but was remunerated for the article