Organic Food is Breaking Through

3 Insanely Profitable Stocks that China Does NOT Control

By

You may remember when traces of cadmium were discovered in some earrings and toys imported from China earlier this year.

Or maybe you recall back in 2008, when a bunch of baby food tainted with melamine ended up making thousands of infants violently ill. That baby food never made it to the United States... But in China, there were confirmed deaths from the contamination.

I personally remember back in 2007, when we found out that batches of dog food originating in China also contained melamine. Our dog was actually sickened by that toxic slop. And yes, I hope the scumbags who were responsible burn in hell for that one.

Thankfully, our beautiful Icelandic Sheepdog, which my wife rescued more than 14 years ago, recovered.

But that whole scene really put the spotlight on some serious concerns regarding how our food is grown and raised — and more importantly, where it comes from.

China loves corn

As a regular reader of these pages, you already know that China controls the solar manufacturing market and is within grasp of controlling the wind turbine market. The Middle Kingdom also produces about 97% of the world's rare earth elements.

But the next time you walk into your supermarket, take a look around and consider how much of what you're eating is also coming from China.

While most of our food still comes from domestic sources, Chinese food imports are growing quite rapidly. In fact data from customs statistics show that the annual value of food shipments from China has risen from about $1 billion in 1999 to $5.2 billion in 2008.

Of course, China also imports quite a bit of food from the U.S., particularly corn.

This year, corn imports to China have soared as domestic production was simply unable to keep up with a rise in demand — much of which was driven by corn-based animal feed.

But here's the interesting part...

While China has a stellar reputation for dumping all kinds of toxic sludge in food and products that are sent here, they draw the line at accepting corn imports if they contain certain strains of genetically modified corn.

Consumer behavior can dictate profits

Last week, for the first time, China rejected about 60,000 tonnes of U.S. corn because it contained an unsanctioned genetically modified (GM) strain of corn. That cargo was shipped to China's southern province of Guangdong.

Of course, just for the sake of clarification, China has very tough rules in place when it comes to genetically modified organisms (GMOs) because this helps limit U.S. imports. But on a global scale, the continued fight against GMOs is not waning.

All over the world — particularly in Western Europe, Canada, and the United States — more and more consumers are rejecting genetically modified foods, meat raised with the assistance of antibiotics and steroids, and produce sprayed with pesticides and herbicides.

And the proof is in the numbers:

  • 2009 sales of organic food and drinks grew to nearly $25 billion from just $1 billion in 1990

  • Organic fruits and vegetables now account for 11.4% of all fruits and vegetables sold in the U.S.

  • Over 4.8 million acres of U.S. farmland are now cultivated with certified organic methods

Now, some have suggested that the consistent surge in organic demand has weighed on companies that manufacture pesticides and herbicides — like Monsanto (NYSE: MON), for instance.

But I don't buy that...

The organic food market, while experiencing tremendous growth over the past decade or so, is still a small player in the overall market. And I think it would be naïve to suggest that Monsanto has been adversely effected by the rise in organics.

However, the company has been on the hot seat for a few years due to some questionable business practices. Here you can read more about there settlement, modifited seeds and lawsuit.

Of course, I'm not writing this piece today to focus on Monsanto...

Instead, my focus is on the companies that continue to profit from the rising demand for local, organic foods — free from chemical pesticides and synthetic fertilizers (which are huge energy hogs when produced), and free from the control of China.

And most have been doing quite well this year.

Take a look at two of the biggest movers: Whole Foods Market (NASDAQ: WFMI) and Hain Celestial (NASDAQ: HAIN)...

wfmi


hain

And here's one that's given us a very nice gain this year, SunOpta (NASDAQ: STKL):

stkl

For the year, we're up 96% on this one!

SunOpta, by the way, sources, processes and distributes natural and organic food products worldwide.

In 2011, we'll continue to play the organic and natural foods markets with these, and possibly a few newcomers that'll offer us more bang for our organic buck.

And of course, we'll continue to play the very lucrative alternative energy market, where our latest play — a company that's developed an actual solar-powered window — has more than doubled in the past two weeks.

I think it'll get another boost today, too, since a top certification and testing lab for solar products just validated the company's very impressive power generation calculations. There's some more information about those calculations here.

That stock is currently up another 12 percent right now.

To a new way of life, and a new generation of wealth...

Jeff
Energy and Capital


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