August 4, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Cover crops have generally been background noise in agricultural production. However, they have gained prominence as a low-cost, key part of regenerative farming methods, and a tool for farmers to use in combating climate change.

CoverCress is planted at corn harvest in the fall, and is harvested just before soybean planting in May, enabling farmers in the southern regions of the Midwest to grow three crops every two years while also gaining the benefits of a cover crop (decreased nitrogen losses and improved overall soil health).

Aside from increasing farmers’ income through the ability to plant an extra crop without the loss of corn or soybean seasons, CoverCress has oil and protein profiles similar to those of canola – it builds soil health, and holds soil and nutrients in place over winter, while also having the unique trait of a very low carbon density. And according to the USDA, integration of the cover crop between corn and soybean rotations has the potential to yield as much as 2 billion gallons of oil per year, toward the goal of 50 billion gallons of biofuels in 25 years. 

Recent History

CCI has been a portfolio company of Leaps by Bayer for the past seven years. This partnership was expanded in April 2020, when Leaps by Bayer participated in a $5 million funding round for CoverCress that was co-led by Fulcrum Global Capital and Hermann Companies, and including Prelude Ventures, St. Louis Arch Angels, Prolog Ventures and additional commitments from certain company founders and employees. 

In April 2021, Bunge Ventures, the for-profit, global investment arm of Bunge, led an $8 million Series B-1 round in CoverCress. At the time, REG Ventures, a subsidiary of leading U.S. producer of biodiesel and renewable diesel Renewable Energy Group, also participated in the round. 

One year later, in April of this year, Bunge and CoverCress Inc.  (CCI) announced a unique, long-term commercial partnership to bring a new renewable oilseed and animal feed crop that is ideal as a lower carbon intensity feedstock for renewable fuel production to market. 

This relationship between Bunge and CoverCress was strengthened, as Bunge has increased its stake in the company through an unspecified Series C-1 round.

Additionally, Chevron U.S.A. Inc., a subsidiary of Chevron Corporation, has joined the C-1 round to become a new investor in the company, and has formed a joint venture with Bunge that will produce feedstock to supply the rapidly growing renewable fuel industry.

In connection with this commercial partnership between CCI and Bunge, CCI supplies CoverCress grain produced by farmers under contract to Bunge for processing. This leads to the strategic partnerships between CCI, Bunge, and Chevron creating a dedicated farm-to-fuel supply chain for the low-carbon intensity feedstock produced from CoverCress grain.

Now That We’re Caught Up…

Bayer, Bunge, and Chevron have signed an agreement in relation to Bayer increasing its stake in CCI to a 65 percent majority holding. The remaining 35 percent of the company will stay under the joint control of Bunge and Chevron, while the deal provides an exit ramp for early investors.

By leveraging the combined backing and knowledge of different leaders in soybean crushing, fuels, crop sciences, and logistics, CCI will be fully able to deliver on its full potential through a farm-to-fuel supply chain that unilaterally understands its crop’s production, growth, processing, and delivery needs, from seed to end consumer.

“CoverCress is exciting because it has the potential to become an important source for biofuel production as a new harvested rotational crop, while giving growers an innovative option to continue effective stewardship of their land and improve soil quality by acting as a cover crop,” said Rodrigo Santos, member of the Board of Management, Bayer AG and president, crop science division.

“As a global leader in crop science, we are committed to decarbonizing agriculture and helping farmers around the world become more sustainable through game-changing products and solutions that can impact climate change. This investment and collaboration between industry leaders is another proof point for our efforts.”

Bayer stated that growers in North America will soon gain access to this cash crop that provides the benefits of a cover crop, while also being harvestable, and a new income stream. 

“Connecting the full value chain – from seed development to end consumer – is an important step to bringing this crop to market at scale,” said Greg Heckman, CEO, Bunge. “We look forward to helping meet the growing demand for renewable fuels with this next generation lower carbon feedstock.”

~ Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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