Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Hello and welcome to another episode of the Odd Thoughts podcast.
Speaker 2: I'm Tracy Alloway.
Speaker 3: And I'm Joe Wisenthal.
Speaker 2: Joe, there's a running joke on this podcast. There's a
Speaker 2: few of them, but one of the running jokes is
Speaker 2: farmers are always complaining about something.
Speaker 3: They are they are always complaining about something, But you
Speaker 3: know what, it's okay. We need to eat to live.
Speaker 3: Food is pretty important for sort of human civilization, flourishing,
Speaker 3: et cetera. So if the worst is that they complain
Speaker 3: a little bit about how Musiah they're getting for their
Speaker 3: corn or whatever, I'm okay with that.
Speaker 2: Well, to be fair, we also know that one of
Speaker 2: the defining news stories of the past few decades has
Speaker 2: been the hollowing out of America's small scale agricultural industry
Speaker 2: and farmers. So if you are an independent farmer, there
Speaker 2: is a lot to complain about.
Speaker 3: To be fair, totally, and again with the caveat that
Speaker 3: it's always tough. Very recently, a couple of weeks ago,
Speaker 3: we did the episode about surging fertilizer prices. In that conversation,
Speaker 3: you know, we talked about the fertilizer to corn chart,
Speaker 3: and it is not a good ratio. Now, you know,
Speaker 3: there are many ways to represent an industry, but if
Speaker 3: you just wanted one, that's a very clean way. Fertilizer
Speaker 3: prices way up. Obviously, given the situation in Iran, corn
Speaker 3: price is not nearly anywhere close to their all time
Speaker 3: highs or anything like that. So just by at least
Speaker 3: one measure, that is a clear squeeze. Right.
Speaker 2: So we recorded our fertilizer episode, I guess a week
Speaker 2: or two ago at this point. I think at the
Speaker 2: time when we were discussing it, the possibility that the
Speaker 2: closure of the Strait of Hormuz could actually push up
Speaker 2: fertilizer prices, a lot of people weren't necessarily that aware
Speaker 2: of this dynamic. Since then, it has gone very mainstream,
Speaker 2: and you have officials in the US government talking about
Speaker 2: sourcing alternative fertilizer from Morocco or Venezuela to try to
Speaker 2: offset some of the pain. There is some slightly good
Speaker 2: news if you are a farmer, which is that we
Speaker 2: are seeing grain prices start to go up. But to
Speaker 2: your point, again, it is not at all clear that
Speaker 2: it's going to be enough to offset higher input costs
Speaker 2: like fertilizer or oil totally.
Speaker 3: Well, anyway, you know, we did that episode several weeks
Speaker 3: ago about what it was like to do agribusiness in
Speaker 3: tough markets like particularly Venezuela, Ukraine and so forth. And
Speaker 3: I recall at the very end of that conversation, and
Speaker 3: this was obviously before the fertilizer spike. Yeap, our guests
Speaker 3: who we were talking to said we got a good
Speaker 3: history lesson about Venezuela and Ukraine, but they also said,
Speaker 3: at some point we should talk about the pain that
Speaker 3: American farmers are in right now and so then, so
Speaker 3: that was already the condition. There was sort of this tease.
Speaker 3: Things weren't great. Then you get the fertilizer spike. So
Speaker 3: it's like, it seems like a good time to have
Speaker 3: that conversay.
Speaker 2: Yeah, we were going to wait a little bit to
Speaker 2: do that episode, but it turns out that now is
Speaker 2: actually the perfect time for the perfect guests. Once again,
Speaker 2: we are going to be speaking with Jeff Kazen and
Speaker 2: Mike Rolfson. They are the founders of Agris Academy. So
Speaker 2: Jeff and Mike, thank you so much for coming back
Speaker 2: on Odd Blots. Really appreciate it. First question. You know,
Speaker 2: when we spoke to you last time, we were very
Speaker 2: focused on Venezuela and Ukraine and your experience working at
Speaker 2: Cargil earlier. But can you just tell us what Agress
Speaker 2: Academy actually does. Jeff, why don't we start with you?
Speaker 4: Yeah, thanks for having us on again. So, Agress Academy
Speaker 4: is not a broker and advisory business. Mike and I
Speaker 4: each have thirty years of in depth either commodity or
Speaker 4: involvement in the egg industry, and we decided we wanted
Speaker 4: to start an education and consulting business, so we educate.
Speaker 4: We have a producer practice where we educate producers on
Speaker 4: one level how to manage risk and understand the future
Speaker 4: side of risk, and on another level how to merchandise
Speaker 4: like professional grain operation. Because a lot of farms have
Speaker 4: become effectively elevator managers, there was a gap and still
Speaker 4: is a tremendous knowledge gap en farmers around the world.
Speaker 4: We generally have North American students and clients. And then
Speaker 4: we also have a commercial business where we work with
Speaker 4: businesses that work with various all kinds of commodities, where
Speaker 4: we help them understand the risk walk through how they're
Speaker 4: consolidating that risk, how they're managing that risk in best
Speaker 4: practice form in a boutique consulting type of arrangement. So
Speaker 4: we have both practices and a super rewarding business. Kind
Speaker 4: of a second career for both of us as we
Speaker 4: kicked it off and we wanted to be in a
Speaker 4: very differentiated part of the market that wasn't well well covered,
Speaker 4: and that's been a fantastic We've been in business now
Speaker 4: for four years and grow very very steadily each year.
Speaker 3: Mike, just in case anyone hadn't listened to the episode
Speaker 3: with the two of you before, and just to sort
Speaker 3: of add on to it, Jeffer saying, just give us,
Speaker 3: like the quick your background, your bio, and the long
Speaker 3: experience that you have had in that a space.
Speaker 5: Yeah, about two thirds of my career was spent in
Speaker 5: Cargill doing an array of commercial things, mostly in risk management, trading,
Speaker 5: global supply chain type of things. I got at the
Speaker 5: end there after a stint that Jeff and I both
Speaker 5: did through their emerger and acquisition and corporate strategy group.
Speaker 5: I pivoted to ventures, got hooked on that, and I
Speaker 5: left Cargole in two thousand and nine, But since then
Speaker 5: I've been in some sort of an ag tech oriented,
Speaker 5: venture capital oriented type thing and nag across the array
Speaker 5: of topics sub segments with an egg. Jeff and I
Speaker 5: have kicked this off what about three and a half
Speaker 5: four years ago now, And one thing I think that
Speaker 5: helps this conversation today is sure we've probably touched through
Speaker 5: students or through more direct relationships, almost four hundred farms
Speaker 5: now in the US and Canada, so we definitely know
Speaker 5: the vagaries of where this input situation falls in, who's
Speaker 5: positioned and well or otherwise, and what's really going on
Speaker 5: when it hits the farm gate.
Speaker 4: Yeah.
Speaker 2: So on that note, why don't you tell us where
Speaker 2: we are in the sort of agricultural calendar at the moment,
Speaker 2: Because one of the things we learned from our previous
Speaker 2: fertilizer episode is that fertilizer prices are going up kind
Speaker 2: of right when people need it most, which is the
Speaker 2: spring planting season. But my understanding is some people would
Speaker 2: be buying spot fertilizer right now, some people have already
Speaker 2: got their supplies secured. And I'm also very curious about
Speaker 2: where we stand in terms of planting decisions, whether people
Speaker 2: are still making those right now, or whether or not
Speaker 2: people have already decided what they're going to plant for
Speaker 2: the year.
Speaker 4: Yeah, I guess I'll this Jeff, and I'll take this
Speaker 4: one on to start. So, when we're really talking about
Speaker 4: a North American farmer here right towards the end of
Speaker 4: the South American or South Southern hemisphere harvest, whether that's
Speaker 4: generally Australia, Argentina, Brazil, you know, we've already started planting
Speaker 4: corn in places like Texas, even into Mississippi. We have
Speaker 4: clients that have already started and it was eight below
Speaker 4: in Minneapolis and we're not even close here in the
Speaker 4: Upper Midwest. So a lot of the certain amounts of
Speaker 4: nitrogen actually is put down actually in the fall in
Speaker 4: the northern tier where the ground freezes and things kind
Speaker 4: of go into a stasis. For the winner. A fair amount,
Speaker 4: and we're really really talking about nitrogen fertilizer here is
Speaker 4: probably maybe the one that's giving the world the most
Speaker 4: heartache at the moment. Some of it's pre bought, prepositioned.
Speaker 4: I would say the vast majority of what it needs
Speaker 4: to be used in the US crop is already either
Speaker 4: here in warehouses or on its way because you have
Speaker 4: to remember it's a long supply chain, and if we're
Speaker 4: going to plant in earnest starting in early April into
Speaker 4: what we would call the corn belt, that product already
Speaker 4: has to be here. So you can see that in pricing,
Speaker 4: the full call it replacement price of something like your
Speaker 4: rea coming out of the air peninsular area is not
Speaker 4: reflected in US values. So it's one of these you
Speaker 4: generally as a trader with price replacement, but full replacement
Speaker 4: is actually not coming through at the moment. I want
Speaker 4: to think, I don't know the name. Some stone Cks
Speaker 4: people have been putting that out on X kind of
Speaker 4: keeping people upraised of what that is. So you're not
Speaker 4: actually getting the full brunt because a lot of that
Speaker 4: in the northern hemisphere is already here.
Speaker 5: I was prepping for this and the University of Illinois
Speaker 5: puts out a really good series of reports, I believe
Speaker 5: under Farm Docs Daily I believe it's called. And the
Speaker 5: figure they threw out, at least the one I saw,
Speaker 5: what I believe was around seventy five percent of fertilizer
Speaker 5: has already been purchased, okay plus so.
Speaker 3: Okay, well that's I guess that that is relatively good
Speaker 3: news that a lot of it's already been purchased, perhaps
Speaker 3: before the spike. But we're going to talk obviously about
Speaker 3: what conditions are like. We're recording this March seventeenth, twenty
Speaker 3: twenty six. Well, let's talk about what conditions were like
Speaker 3: February seventeenth, twenty twenty six, because at the end of
Speaker 3: our last conversation several weeks ago, you're like, you know,
Speaker 3: we should really talk about this squeeze that's already sort
Speaker 3: of facing American farmers. So why don't you take us
Speaker 3: back to February twenty twenty six or January twenty twenty
Speaker 3: six and just talk about the sort of general macro
Speaker 3: conditions that the people you're working with we're already facing
Speaker 3: prior to the fertilizer spike.
Speaker 4: So let's just take you back. So I want to
Speaker 4: take your listeners to how farming works in the US.
Speaker 4: We have a little bit of an insight that is
Speaker 4: a little bit maybe they haven't seen. So what has
Speaker 4: been happening and why you continue to hear from the
Speaker 4: farm community about the squeeze. If you look at prices, right,
Speaker 4: we sent you some price charts, I'm sure you'll be
Speaker 4: able to put those in. We basically since twenty sixteen,
Speaker 4: the futures prices have not changed. So imagine a business
Speaker 4: since twenty sixteen where your output as prices have not changed. Then,
Speaker 4: on the flip side, when you look at let's call
Speaker 4: it inflation, land prices, I don't have. These exacts have
Speaker 4: probably doubled, okay, right, Equipment prices are probably up forty percent,
Speaker 4: the cost of living, think about things like health insurance,
Speaker 4: all these things. Right, you would look at that massive
Speaker 4: increase in prices and look at that and say, these
Speaker 4: businesses have to be insolvent. So the first piece of
Speaker 4: the puzzle I want to take your listener down is land.
Speaker 4: So when you produce in the big markets, let's call
Speaker 4: it corn, soybeans, cotton, softweet. And I'll apologize because I'm
Speaker 4: not going to cover every crop here the kind of
Speaker 4: that Midwest market. We'll just use Midwest corn. It is
Speaker 4: a tremendous driver of land value. If you take a
Speaker 4: cost to grow an acre of corn, and let's use
Speaker 4: an example, it's one thousand dollars an acre to grow
Speaker 4: the corn, and you're in central Illinois and you're on
Speaker 4: an ideal parcel called a square section, nice flat, black
Speaker 4: and square. The land rents probably going to be half
Speaker 4: your costs, okay, And so obviously you can see that
Speaker 4: tremendous inflation in land rent or the value of the land.
Speaker 4: And a lot of land is rented, right and just
Speaker 4: if you look at the capital constraints and the challenge
Speaker 4: we're i mean as farmers with land and land rental
Speaker 4: values is it's not trading basis. It's economic create value
Speaker 4: creation anymore. It's trading like gold. Okay. So the investor
Speaker 4: community has maybe pulled back a little bit. Land prices
Speaker 4: are actually stable at a very high value today, but
Speaker 4: it represents if you think about, yeah, fertilizer is going up,
Speaker 4: it's actually in the last ten years, isn't the one
Speaker 4: that's gone up as a percentage the most right? Land
Speaker 4: by far. And when you get the promise that cap
Speaker 4: rates are going to be two percent net and you're
Speaker 4: going to get six percent a year, which has actually
Speaker 4: has happened up until maybe the last twenty four months,
Speaker 4: it's attracted a lot outside investors. It's not correlated very
Speaker 4: well to you know, other out investments. So it provides
Speaker 4: a nice portfolio effect to the thing. But it's gotten
Speaker 4: to such levels right that on a cash flow basis,
Speaker 4: it makes very little sense on the investment and land
Speaker 4: you're banking that you know at two percent, you're really
Speaker 4: banking that you're going to continue to get appreciation at
Speaker 4: six percent forever. And that is actually running it, in
Speaker 4: my opinion, the law of big numbers. So the other
Speaker 4: thing that you need to understand that has driven land rent,
Speaker 4: and I think you alluded to it around small farms,
Speaker 4: is federal crop insurance. You may have heard about this, right,
Speaker 4: but it's highly subsidized. And if you think about when
Speaker 4: you look go out, you spend one thousand dollars an
Speaker 4: acre to grow a crop, right, it would be seemed
Speaker 4: to be quite risky. But if you can now, particularly
Speaker 4: with some additional subsidies, you can ensure most of the
Speaker 4: loss away through Federal crop insurance, which is highly subsidized.
Speaker 4: One thing you're like, I do farm at scale in
Speaker 4: my post cardio life, so very involved in this, and
Speaker 4: think of it as a call option where all of
Speaker 4: a sudden you've been able to hedge off the downside,
Speaker 4: but you continue to run the upside for yourself. And
Speaker 4: so what that's done is it's really stabilized land values.
Speaker 4: And it's also made rents bid up to basically no
Speaker 4: margin because they'll go the farmers will try to get bigger. Right,
Speaker 4: we're looking for economies of scale and efficiency, and it
Speaker 4: runs like a call option. If you graft it out right,
Speaker 4: you lose the downside and you have this hockey stick
Speaker 4: effect to the upside. So that has driven land rends
Speaker 4: extremely high and a lot of places, so you're really
Speaker 4: getting a lot of pressure from your number one cost,
Speaker 4: which is land price. Number two generally be fertilizer. But remember,
Speaker 4: as a percentage, if you've bid the ground up, and
Speaker 4: this is probably why you're getting a lot. If you've
Speaker 4: bid the ground up to a zero margin, and then
Speaker 4: all of a sudden you have a shock to the
Speaker 4: fertilizer system. Now your theorem medical margin that was basically
Speaker 4: you bid to zero to gain scale, and now you're
Speaker 4: one hundred dollars an acre negative, right, And then you
Speaker 4: push that through. When you farm a thousand acres, you've
Speaker 4: lost one hundred thousand dollars. You farm two hundred thousand,
Speaker 4: two hundred acres, and it just keeps them well. It
Speaker 4: gets to be big numbers because the farms have gotten big,
Speaker 4: and so that's where you really when you get a
Speaker 4: shock like fertilizer shock, when you're late in the system. Right,
Speaker 4: you've already agreed on land rents, you've agreed on basically
Speaker 4: most of your input costs are locked down at this point,
Speaker 4: and all of a sudden you don't have everything covered.
Speaker 4: It puts you into negative pretty quick, and so margins
Speaker 4: are very very tight. And in fact, you've seen some
Speaker 4: of these various government payments that have been pushed through.
Speaker 4: A lot of those are going straight through the system.
Speaker 4: So you think about the farmer, right, he's using that
Speaker 4: money he or she actually, I should say, to pay
Speaker 4: off various pay the land rent, or make the payment
Speaker 4: on equipment or things like that. That money is getting
Speaker 4: passed through. That's why sometimes you hear the farmers, you say,
Speaker 4: they complain all the time, like I don't even get
Speaker 4: the benefit of this, you know, bridge payment or whatever
Speaker 4: the latest name is. It's because it's passing straight through
Speaker 4: the system. Which that's why they grumble that. You know,
Speaker 4: it all goes to the various egg co and John
Speaker 4: Deere and Nutrient and some of these companies that people
Speaker 4: are looking at as investment becomes.
Speaker 5: Sort of a hyper channel the monetary inflation. This last
Speaker 5: mechanism that Jeff described, because that money basically passes through
Speaker 5: the all of the producer and then ping pongs in
Speaker 5: the system on the inputs on it.
Speaker 2: Say a little bit more about land rents, And the
Speaker 2: reason I ask is because I read I found a
Speaker 2: random book in a used bookstore called Trees, Why Do
Speaker 2: You Wait? And it was like an anthropological study of
Speaker 2: two towns, two farming towns. I think they were actually
Speaker 2: in North Dakota, both of them in the late nineteen eighties,
Speaker 2: and so a lot of it is about how farmers
Speaker 2: make individual decisions. And so one thing I'm very curious
Speaker 2: about is the factors going into whether a farmer can
Speaker 2: outright own the land versus rent the land, because certainly
Speaker 2: in the nineteen eighties, in these two small North Dakota towns,
Speaker 2: there's a lot of grumbling about the landowners themselves, and
Speaker 2: I think a lot of people in the towns were
Speaker 2: upset that they would rent land from usually older people
Speaker 2: who would then leave the town and go to Florida
Speaker 2: in the winter and just charge an extraordinarily high amount
Speaker 2: for the right to farm. That particular piece of acreage.
Speaker 2: So I'm very curious what are the factors that go
Speaker 2: into whether a farmer ends up owning or renting.
Speaker 4: So in today's values, right, farmers generally that are in
Speaker 4: the business own a mixture of They have some own
Speaker 4: land and some rented land, and they basically will leverage
Speaker 4: the own land or look at the average kind of
Speaker 4: land cost and they'll buy strategic pieces. In today's market,
Speaker 4: the piece across the fence, right, the one that they've
Speaker 4: watched for years and years, and so you see a
Speaker 4: lot of that. And of course we also have an
Speaker 4: investor community, and we also have a ten to thirty
Speaker 4: one exchange community. All these solar farms and data centers
Speaker 4: are bringing massive amounts of capital back into land, and
Speaker 4: it's really I mean, we have personal friends that are
Speaker 4: being bought out for development. We watched farms trade for
Speaker 4: solar and so you know when they've traded tremendous values
Speaker 4: and the farmers like to rotate that back, that capital
Speaker 4: back in. But when you look at the returns for
Speaker 4: very prime farmland, and I'll be light on this, and
Speaker 4: you're going to pay fifteen thousand dollars an acre Iowa Illinois,
Speaker 4: and I'll probably be a little bit light basis today's values,
Speaker 4: but for easy figuring. So if you want ten percent
Speaker 4: cap rate, you have to have a land round of
Speaker 4: fifteen hundred dollars, right, And that's never going to work, right,
Speaker 4: That's going to be more than the gross revenue. So
Speaker 4: you end up with land rents that have been pushed
Speaker 4: as high as they can stand to this kind of
Speaker 4: I'm using this example of this prime real estate at
Speaker 4: five hundred dollars, this very square, very efficient piece. Not
Speaker 4: every piece of land would garner even garner that kind
Speaker 4: of rent. So it's very hard. You can't make the
Speaker 4: thing cash flow on its own and today's values, I said,
Speaker 4: it has divorced itself from its economic So then you're
Speaker 4: back to renting, right, and then you're in that game
Speaker 4: of securing land based it secures across efficient equipment scale,
Speaker 4: and so you're back to you know, renting at and
Speaker 4: quite frankly, we do see this all the time where
Speaker 4: rents have gotten so high. If grandma had one hundred
Speaker 4: acres that you know, all of a sudden she can
Speaker 4: rent out for five hundred dollars an acre, right, it's
Speaker 4: fifty thousand dollars.
Speaker 2: Yeah, not bad.
Speaker 4: Say it's two hundred acres, right, not bad. Right, head
Speaker 4: to a low tax stadium, yeah, and enjoy some life.
Speaker 4: So you get a lot. It's very hard to justify
Speaker 4: as a farm buying land, but we still do buy
Speaker 4: some right strategic pieces I think is what generally in
Speaker 4: today's environment where you get. But there are all kinds
Speaker 4: of actors I think might want to comment here, but
Speaker 4: we often hear they say you're not going to make
Speaker 4: any more land, right, and I really don't we get
Speaker 4: into this thing. I don't. That's not really true.
Speaker 1: Right.
Speaker 4: The Brazilians are adding two million acres a year, maybe
Speaker 4: more the Indonesians and can add palm plantations at a
Speaker 4: tremendous rate there. Obviously there's lots of potential in Africa
Speaker 4: still to be unlocked. And then the technology and efficiency
Speaker 4: per acre has just exploded. And that's actually if you
Speaker 4: look at that chart and say, Jeff, you started saying
Speaker 4: the prices aren't any higher, you have this huge inflationary fact.
Speaker 4: How are farmers surviving? And the answer is we've had
Speaker 4: tremendous productivity gains in farming, particularly North American farming. The
Speaker 4: country quietly should be very proud of its aag sector.
Speaker 4: It's done just it quickly adopts things. It drives technology
Speaker 4: adoption at a tremendous rate. That's lowering its unit costs.
Speaker 4: And that's how we've been surviving for the last ten years.
Speaker 4: If we have lower ever squeeze by inflation, you've got
Speaker 4: to survive in productivity.
Speaker 5: Mike, No, Jeff nailed it.
Speaker 4: You know.
Speaker 5: If you look at the charts, the blips aside, say
Speaker 5: around the twenty one drought in South America and then
Speaker 5: the twenty two issue with the Ukrainian war, if you
Speaker 5: look at it averaged out or even snapshot from ten
Speaker 5: years ago to today, we're almost dead on the same numbers.
Speaker 5: So it's being made up via efficiency gains in a
Speaker 5: significant manner. But the fact of the matter, though is,
Speaker 5: and I'm sure in your world you've heard this many times,
Speaker 5: the real rate of the inflation adjusted real rate of
Speaker 5: commodities over time will fall. They do if you chart.
Speaker 5: I think the best way to do this is chart
Speaker 5: gold against anything. And you can even pick some things
Speaker 5: that have maybe been hotter in the moment, like cocoa
Speaker 5: last year or cattle recently. And if you do a
Speaker 5: long term chart of any basically priced taking very elastic
Speaker 5: supply response commodity, they will all over time, and then
Speaker 5: if you plot it against gold, it's a stunning chart.
Speaker 1: Yeah.
Speaker 3: To be fair, anything these days looks pretty bad relative
Speaker 3: to gold. But I certainly take the point, and to
Speaker 3: some extent that is the definition of grass, right, that
Speaker 3: all of you know, grains and proteins and stuff get
Speaker 3: cheaper over time as we become a wealthier society. But
Speaker 3: I certainly take that point. Talk to us about trade
Speaker 3: and the last year, because I could think of like
Speaker 3: a few different dimensions. First of all, you always have
Speaker 3: the President talk about it, We're going to get a
Speaker 3: good deal for our soybean farmers, so I'd never quite
Speaker 3: sure where that is. Second of all, though I imagine
Speaker 3: that you know, especially certain just you mentioned equipment costs
Speaker 3: and tariffs on certain goods, I imagine has created a squeeze.
Speaker 3: Talk to us about the last year and how changing
Speaker 3: trade patterns have affected the farmers that you work with.
Speaker 4: Yeah, So the first thing that hit us, right obviously
Speaker 4: was the trade challenge with China, right, largest buyer of
Speaker 4: soybeans in the world, and that obviously pushes supply back
Speaker 4: into the US, and the Brazilians actually get a different signal,
Speaker 4: economic signal, because prices actually rise in Brazil right up
Speaker 4: under neath the tariff barrier, up right just below where
Speaker 4: the US value is, and so you get a signal
Speaker 4: into the Brazilian market to expand. Actually, and the other
Speaker 4: thing I have a very concern about in that is,
Speaker 4: as we've worked through it, we have sold they the
Speaker 4: Chinese have bought just enough US beans to keep the
Speaker 4: Brazilian the honest that's it, and that's it.
Speaker 3: Can you explain, sorry, can you clarify what that means?
Speaker 4: So what they do is because the Brazilians say, hey,
Speaker 4: you're not going to buy any US beans period, right,
Speaker 4: their prices just keep going higher and higher and higher,
Speaker 4: wall all of a sudden. I think the day that
Speaker 4: they did finally buy a few Brazilian cargoes, I think
Speaker 4: the Brazilian beans probably lost a dollar bushel that US
Speaker 4: cargos bought the US cargoes, and it sends a signal
Speaker 4: so that the US, the brazil Brazilian beans just can't
Speaker 4: get away too far away. The Chinese expectively have used
Speaker 4: US as I see what you're saying as a lever
Speaker 4: to keep that going. But so you got expansion. Brazil
Speaker 4: and of course Argentina under the new regime doing much
Speaker 4: better as far as and you can see they had
Speaker 4: an all time record wheat crop there, and so you've
Speaker 4: got two competitors that are doing relatively well. The other
Speaker 4: concern I have with this is trying not to be political,
Speaker 4: is back when we embargoed the Russians, it sent a
Speaker 4: signal to the world's the world community that we were
Speaker 4: not a stable supplier.
Speaker 5: And the Soviets in the.
Speaker 4: Talking we're gonna go way back.
Speaker 3: Good, good, that's good. We love we love history. On
Speaker 3: the podcast Talk to Us the edition, Yeah, tell.
Speaker 4: Us about that. Yeah. So when that happened, right, that
Speaker 4: caused a flood of capital to pour in to Brazil Argentina, right,
Speaker 4: particularly the Japanese which were the large buyer, global buyer
Speaker 4: and the global trade back then. But others poured money
Speaker 4: into infrastructure to get an alternative. And you would do
Speaker 4: the same thing, right if you were you had one
Speaker 4: grocery store that was supplied and you and all of
Speaker 4: a sudd and they said either do what I want
Speaker 4: or you'd go find a secondary fire. And that is
Speaker 4: absolutely happening. Boring capital is pouring into an alternative Marcus.
Speaker 4: So it's a long term challenge in what this trade
Speaker 4: dispute has done.
Speaker 3: That's my conser So you're saying that history is repeating
Speaker 3: in the sense that the proximate Okay, there's a bunch
Speaker 3: of trade barriers, etc. Going on, and so the move
Speaker 3: is internationally just invest more in non American farms to
Speaker 3: expand that supply, and so you see more, say Chinese
Speaker 3: investment in Brazil and Chinese investment elsewhere, so that they
Speaker 3: just have alternate various buyers of alternate sources outside.
Speaker 2: Of the US.
Speaker 4: Yeah, that is absolutely got it.
Speaker 2: I know you said you didn't want to get too political,
Speaker 2: but I do feel like I have to ask. We
Speaker 2: know that farmers in America overwhelmingly supported Trump two point zero,
Speaker 2: even though they had already had the experience of Trump
Speaker 2: one point oh, which also involved trade restrictions which from
Speaker 2: what I remember, were harmful to things like soybean prices.
Speaker 2: What's the rationale for farmers seemingly being hurt by trade
Speaker 2: restrictions and tariffs but still overwhelmingly supporting a president who
Speaker 2: loves tariffs in his own words?
Speaker 4: Again, I can't speak for every farmer, and there's a
Speaker 4: very wide but I do think that in the previous administration,
Speaker 4: there were i'll call them bridge payments. Okay, the generally
Speaker 4: made up a lot of that gap, a lot of
Speaker 4: that other pieces of a puzzle on taxes. We've had
Speaker 4: tremendous challenges with regulation in farming that was promised right
Speaker 4: and there are you know, whether that's particularly things around emissions,
Speaker 4: water regulation, some things that became very burdensome. And so
Speaker 4: there were a lot of reasons that not every farm.
Speaker 4: We have farms on both sides here, but a lot
Speaker 4: of farms did support the platform that Trump ran on
Speaker 4: in the previous election. There are a number of other
Speaker 4: things besides just the tariffs. They also the sense of
Speaker 4: fair trade, access to markets. We import a lot of
Speaker 4: things from Canada, but we can't export a limber of
Speaker 4: things to Canada. Milk is one of the dairy products.
Speaker 4: I think we're focused on grain, but there are significant
Speaker 4: capital investments in this country and everything on the livestock
Speaker 4: and protein side out there also that we haven't even broached.
Speaker 5: And another example the EU. Obviously, the EU has a
Speaker 5: protected grain market like no place on Earth. So one
Speaker 5: thing I can say, if given the opportunity, ninety nine
Speaker 5: plus percent of row crop producers in the United States
Speaker 5: would love nothing more than to just remove all trade
Speaker 5: regulation or trade barriers shall we say tariffs or otherwise
Speaker 5: to global grain production, because they would do extremely well
Speaker 5: in an environment like that.
Speaker 4: Yeah, American farmers are playing to the rules. They didn't
Speaker 4: get to say it the rules. They'll play to the
Speaker 4: rules that they're given. But if you let them loose,
Speaker 4: they are tremendously productive. We have also the gifts that
Speaker 4: this country has with waterways, transportation, rule of law is
Speaker 4: very important, private property ownership rules, things that make the
Speaker 4: US a little less the Canadian producer extremely competitive in
Speaker 4: the world. Ever more, we continue to get more and
Speaker 4: more government intervention, and we've been through it before and
Speaker 4: we'll deal with it as it comes.
Speaker 3: What about are labor costs a factor or is it
Speaker 3: mostly the type of crops that you deal with? Is
Speaker 3: it's so mechanized that labor is just not a particularly
Speaker 3: important dial or factor of the cost.
Speaker 4: In that example, thousand dollars an acre cost, Labor is
Speaker 4: a tiny amount of that. Ingrain farming has become extremely efficient,
Speaker 4: but in all the crops that you think around vegetable farming, right,
Speaker 4: things that are very labor intense. It's absolutely an issue, right,
Speaker 4: and immigration robotics, although you see more and more right,
Speaker 4: is labor costs rise? Yeah, it's a huge issue in
Speaker 4: certain crops and quite frankly, crops that consumers are more
Speaker 4: familiar with day to day. Right. A consumer doesn't eat
Speaker 4: a soybean or crunch on a hard piece of corn, right,
Speaker 4: But when it becomes strawberries, lettuce, carrots, right, it's still
Speaker 4: a very labor intensive operation.
Speaker 5: And the livestock side is another good example I think
Speaker 5: where labor costs are squeezing and certainly part of the
Speaker 5: immigration issue too.
Speaker 3: My son likes raw corn, by the way, I guess
Speaker 3: he doesn't raw corn. Yeah, well he does directly off
Speaker 3: the cop Yeah, yeah, he does. Just fresh corn, pre cooked.
Speaker 3: I mean it's not the fried corn corn sweet corn, yeah,
Speaker 3: sweet o sweet corn.
Speaker 2: Okay, Yeah, it's very confused.
Speaker 5: You wouldn't want to bite into a fully cured fifteen
Speaker 5: percent moisture.
Speaker 3: Absolutely, he would not being today, But Tracy, have I
Speaker 3: I've probably told this story. Did I ever tell you
Speaker 3: about the time I talked to the palm oil magnate
Speaker 3: at the top at the night club tower. There's really
Speaker 3: noisy nightclub at the top of the Petronas towers in Kualampoor,
Speaker 3: and I met there, Oh you have, and there's this
Speaker 3: palm oil magnate. It was super loud in there, and
Speaker 3: he was like, Joe, let me tell you why palm
Speaker 3: oil is just the best business in the world. It
Speaker 3: goes into everything. It goes into women's lipstick, it goes
Speaker 3: into this, it goes into that, and then this is
Speaker 3: like the key thing relevant. He's like, because of like
Speaker 3: the nature of the trees. At least as of the time,
Speaker 3: it was very difficult to mechanize and so unlike say
Speaker 3: there was always going to because labor is going it
Speaker 3: was such an important part of picking palm oils, like
Speaker 3: Malaysia will always have this cost advantage over richer countries.
Speaker 3: And so yes, he was very he was.
Speaker 2: But now they're talking about mechanized ways.
Speaker 3: Yeah, I think I think they are making it more
Speaker 3: mechanized and robots will eventually come for it. But at
Speaker 3: least at the time he was really giving me the
Speaker 3: hard sell on palm oil is the future.
Speaker 2: And yet you came back from your trip without having,
Speaker 2: but yeah, I did not buy all the Yeah.
Speaker 4: Okay.
Speaker 2: So one of the things I wanted to ask is
Speaker 2: how farmers actually make the decision on what they're going
Speaker 2: to plant each year. I'm sure some of it is
Speaker 2: just based on their own experience and the type of
Speaker 2: land they have, but it also seems like there are
Speaker 2: all these other factors that they would be considering future
Speaker 2: prices that they could get for things, or input costs.
Speaker 2: Maybe certain crops, for instance, consume or need more nitrogen,
Speaker 2: which is now going up in price. So what are
Speaker 2: all the individual factors that go into making those decisions
Speaker 2: every year?
Speaker 4: Well as the farmer of the group. I guess I'll
Speaker 4: have to take this one, so I'd say, obviously economics.
Speaker 4: We do look economics, although I think farmers tend to
Speaker 4: look a little bit more backward than forward because you
Speaker 4: really don't know until you have yield right, and so
Speaker 4: fundamentally you can only take forward looking economics. So far,
Speaker 4: crop rotation is very important, disease breaking, equipment utilization, storage utilization,
Speaker 4: and it also depends in the you know, what are
Speaker 4: your choices. Certain parts of the country have a lot
Speaker 4: more choices. We've kind of left out cotton has been
Speaker 4: severely depressed. Cotton is a very flexible crop in a
Speaker 4: sense that you could replace that with a soybean potentially
Speaker 4: a little bit of corn. Peanuts is a big crop
Speaker 4: in the Southeast, highly government regulated. So what you switch
Speaker 4: to crop insurance is a huge piece of the puzzle.
Speaker 4: What can what levels can you ensure? You may grow
Speaker 4: a crop that doesn't look profitable, but because of the
Speaker 4: levels you can guarantee revenue. Those things got but you don't.
Speaker 4: You don't get tremendous switches in most places because you
Speaker 4: just if you go all corn. We saw a lot
Speaker 4: more corn last year. Actually, you can suddenly find yourself
Speaker 4: in a severe storage problem because you trade a fifty
Speaker 4: bushel and acre soybean for a two hundred bushel and
Speaker 4: an acre corn, and you actually have that in the
Speaker 4: far West. Even as we speak, there is grain piled
Speaker 4: across Minnesota, North Dakota, South Dakota, Nebraska because we had
Speaker 4: a lot more corn on corn acres rotation and we
Speaker 4: outran our storage and we had a great crop.
Speaker 2: So this is something else I wanted to ask about,
Speaker 2: which is like the decision to put something in storage
Speaker 2: and then when you actually decide to sell it, because
Speaker 2: this is again one thing I hadn't really realized was
Speaker 2: such a thing in the US until I read that book.
Speaker 2: But also it seems to be relevant again today because
Speaker 2: we are seeing grain prices start to go up a
Speaker 2: little bit given the Iran situation, and so I'm reading
Speaker 2: stories on Agweek in places like that saying that farmers
Speaker 2: are all rushing to sell all the corn that they
Speaker 2: had in storage from last year.
Speaker 5: Corn really moves for our grain really moves for two
Speaker 5: main reasons in terms of having to move. As Jeff
Speaker 5: already alluded to, storage is one and cash needs is
Speaker 5: the other. And the real value of storage space in
Speaker 5: North America is that first sort of ninety days into
Speaker 5: harvest into harvest, and afterwards after that it becomes again
Speaker 5: more of a personal decision, a personal marketing decision. There's
Speaker 5: an approach we teach that forces producers to think more
Speaker 5: an actual grain merchandising and risk management group like the
Speaker 5: group we work for in the past, would think. So
Speaker 5: they're actual drivers for that. Economic drivers might change than
Speaker 5: the way they did it before. But yes, flat prices
Speaker 5: that are better are just that, and it will bring
Speaker 5: grain to market, especially when we were seeing prices we
Speaker 5: haven't seen for quite some time, and as Jeff said,
Speaker 5: we had a really good crop and a lot still
Speaker 5: sitting around. So yeah, in the last month, a tremendous
Speaker 5: amount of physical grain is moved to hit these higher prices.
Speaker 3: Who makes a lot of money when there's a ton
Speaker 3: of supply and everyone wants storage, do those storage rents
Speaker 3: go way up at that time?
Speaker 4: Yeah, that's a great question. Farmers ask us that all
Speaker 4: the time. So, yes, space gets more valuable right up
Speaker 4: to a point, and then that point, you know, it keeps.
Speaker 4: The value of space keeps rising until it grabs an
Speaker 4: incremental space and the next thing, you know, the easy
Speaker 4: space gets filled first, and then space value gets higher,
Speaker 4: and then the next thing, you know, you're filling a
Speaker 4: salt mine somewhere, and then you get out to the
Speaker 4: far west where you have cold or dryer they actually
Speaker 4: pile the grain and cover it millions and millions and
Speaker 4: millions of bushels, which kind of caps out the value
Speaker 4: of space. So that really starts to set that value
Speaker 4: of space. But yes, it does flex over time. And
Speaker 4: now farmers have invested in a lot of space, and
Speaker 4: one of the things we teach is how to utilize
Speaker 4: that space like a grain elevator, and how to earn
Speaker 4: like a merchandiser. That's a piece, a big piece of
Speaker 4: what we do in our farmer producer business.
Speaker 3: Interesting, So zooming out for a second, I am looking
Speaker 3: at a chart from the American Farm Bureau Federation. Twenty
Speaker 3: twenty five was very higher for farm bankruptcies overall, and
Speaker 3: we're you know, it's not at the levels of like
Speaker 3: when they were doing the Farm Made concerts in the
Speaker 3: nineteen eighties or so forth, but it's clearly ticked up
Speaker 3: the highest that looks like certainly since the pandemic. When
Speaker 3: a farmer declares bankruptcy, how did they wind up in
Speaker 3: that situation? I mean, we everyone's facing the same stresses.
Speaker 3: But what had to have happened to kick off that
Speaker 3: sequence of events such that a farmer files Chapter twelve.
Speaker 4: Yeah, in our farm management practice, which is a part
Speaker 4: of this business, we see a lot. So let's be
Speaker 4: first off, you got dig deeper in those numbers. I'll
Speaker 4: venture to guess that the dairy numbers are in there,
Speaker 4: and we have a structural change in dairy to these
Speaker 4: mega dairy efficiencies that have that business model has taken over,
Speaker 4: and so it's put intense pressure on even the mid
Speaker 4: size dairy farm. So you've got a lot of that
Speaker 4: and that's that's a very emotional type of farming, I
Speaker 4: want to say, because you're there every day with those lot,
Speaker 4: with that livestock. It's hard to explain to somebody who
Speaker 4: hasn't been with an animal since it was born and
Speaker 4: is with it for seven or eight years to get
Speaker 4: forced out that way, it's really challenging. We don't see
Speaker 4: it in the grain side. A lot of it has
Speaker 4: to do with the payments, right, It's been tight, and
Speaker 4: you're watching working capital and farms are different, but we
Speaker 4: don't see a lot of Chapter twelve. You don't see it,
Speaker 4: and we're not seeing farms being forced to sale. We're
Speaker 4: not seeing wholesale equipment sales that are bankruptcy driven in
Speaker 4: the grain side in most markets, I think rice has
Speaker 4: been particularly difficult. We're not huge into that kind of
Speaker 4: Arkansas area. I think cotton has been very, very challenging.
Speaker 4: We really haven't seen a credit contraction, right, which is
Speaker 4: what you would think would happen from working capital. A
Speaker 4: lot of working capital is provided through the farm credit system. Right,
Speaker 4: the quasi backed agencies, and we have very rarely even
Speaker 4: in the last cycle because they're renewing their operating loans.
Speaker 4: Here in the last couple of months there has been
Speaker 4: a very few pullbacks, and then quite frankly, it's still
Speaker 4: very competitive where you can borrow money. It call it
Speaker 4: six and a half to seven and a half percent
Speaker 4: for short term versus a government treasury at three and
Speaker 4: a half three point six. So as investors, right, that's
Speaker 4: a good spread. And there still is a lot of
Speaker 4: equity in farms. It's in the land, so you can
Speaker 4: get farms that get tripped up through expansion and you
Speaker 4: have equity, but it's locked through into the land values,
Speaker 4: and that can be where you get into trouble. You
Speaker 4: just get short term operating capital squeeze. But the banks
Speaker 4: are not, to the best of what we see, are
Speaker 4: not really heavily pulling back on operating notes at this point.
Speaker 5: Yeah, it goes back to the land point that we
Speaker 5: made earlier in equity. And when you compare now to
Speaker 5: the farm aid stuff in the late eighties, much better
Speaker 5: balance sheets at the producer level now versus then. And
Speaker 5: also remember you had interest rates in the upper teams, right,
Speaker 5: So it's just very different now because obviously there's a squeeze,
Speaker 5: but it's not remotely like that.
Speaker 2: So I realized we're already running out of time and
Speaker 2: we could kind of keep going for ages. But just
Speaker 2: to get back to the current situation, what are you
Speaker 2: hearing from your network of farming contacts right now about
Speaker 2: how they're feeling about the around situation, Because as we
Speaker 2: mentioned in the intro, there are these push pull factors
Speaker 2: that are going on right now.
Speaker 4: Yeah, we as you know, as we connect with the
Speaker 4: farmers and I have my own farm. First off, we've
Speaker 4: had some opportunities to hedge off some grain for new
Speaker 4: crop have some relatively interesting levels, and lots of our
Speaker 4: clients have taken a time to at least get some
Speaker 4: grain sold.
Speaker 2: You forward sold the upcoming.
Speaker 4: We can we can forward sell the upcoming crop we've
Speaker 4: taken advantage of on the old crop right, which we
Speaker 4: talked about a little bit earlier. We obviously are very
Speaker 4: very concerned about the fertilizer prices on the pieces we
Speaker 4: don't have locked up, and you know, and that constant
Speaker 4: squeeze across all inflationary I think the inflation is the
Speaker 4: piece that drives us. I'm going to call us being
Speaker 4: the proverbial us because we don't feel like we're in control.
Speaker 4: A number of suppliers and the A sector operate in
Speaker 4: olig olig oligopoly, right, and so you'll hear a lot
Speaker 4: about whether that seed fertilizer, particularly in cattle processing, and
Speaker 4: you know that's a big issue. We're very aware of it.
Speaker 4: When you put in trade barriers, you actually isolate other
Speaker 4: competitors out right. They are probably critical to keeping costs
Speaker 4: down at the farm. So farmers feel very threatened about
Speaker 4: the supplier environment that they're in, and probably with good reason.
Speaker 4: I've never seen anything personally illegal go on, but I
Speaker 4: see lots of behavior that is legal to operate in
Speaker 4: that oligopoly environment. And so it's it's really disconcerting if
Speaker 4: you think about running a business where your suppliers are two.
Speaker 4: You know, there's what three maybe four seed companies left genetics.
Speaker 4: You're processing the cattle, which, by the way, you know,
Speaker 4: at least on the calf sides at all time record profits.
Speaker 4: But they're still concerned because you only have realistically three
Speaker 4: or four buyers. Hogs are highly consolidated, chickens very consolidated fertilizer.
Speaker 4: So that's probably one of the angst. We have policies
Speaker 4: another big piece of the angst because we're I think
Speaker 4: without these payments, we don't know whether those are going
Speaker 4: to come or not. That's floated a lot of farms
Speaker 4: in the last year, and so that's very disconcerning because
Speaker 4: you could change the administration to administration, you can't hedge
Speaker 4: that or know what the numbers are going to look like.
Speaker 4: Lots of uncertainty.
Speaker 3: But do you have one piece of advice for your client,
Speaker 3: like right now is right now in this environment? Like okay,
Speaker 3: they that's what they're telling you. What are you telling
Speaker 3: them to do right now?
Speaker 5: Well, one thing, as we already talked about, is look
Speaker 5: these gift horses in a good way and hedge a
Speaker 5: little bit off for next year because we are at
Speaker 5: new crop levels we describe new crop as next fall
Speaker 5: in trader language, at numbers that we haven't seen for
Speaker 5: a while. So let's go ahead and take advantage of
Speaker 5: that and see what happens. As you folks probably very
Speaker 5: well know, crude and corner incredibly correlated. I think they
Speaker 5: have an R square north of ninety five with some
Speaker 5: of our very tight relationships. We're having producers sit in
Speaker 5: their easy chair on Sunday nights when the overnight's open
Speaker 5: after a weekend of crazy news and everyone's doom scrolling
Speaker 5: and crud's up twenty and corn's up twenty cents following it.
Speaker 5: Maybe if you only have a little bit hedge for
Speaker 5: next year, go into your account and hedge a little more.
Speaker 5: So we've been taking advantage of some of these wild
Speaker 5: market swings, often a weird times for whatever reason, the
Speaker 5: last couple Sunday nights have been absolutely wild. Yeah, So
Speaker 5: just pay a little bit more attention and win these
Speaker 5: little battles along the way we refer to as winning
Speaker 5: the details. Take advantage of those things. Why you can.
Speaker 4: I think what we teach in class right is around discipline. Right,
Speaker 4: the discipline and hearts are really good. So understanding your
Speaker 4: actual risk, managing that risk off, that's just your risk profile,
Speaker 4: staying steady right, things that people who trade commodities for
Speaker 4: a living do and understand. And then there are huge
Speaker 4: amounts of physical details around cash management and storage and
Speaker 4: things like that that are still out there. So that's
Speaker 4: really where we bring out the disciplined approach around this
Speaker 4: and becoming risk managers. We always one of the first
Speaker 4: things we say is that if you want to make
Speaker 4: a jump as a producer, you become a risk manager
Speaker 4: to the farm instead of a speculator. And that's how
Speaker 4: the biggest companies, right, they have risk managers, whether they're
Speaker 4: commodity companies or people who use a lot of commodities, right,
Speaker 4: they have people that risk manage and they focus on margin.
Speaker 4: And so we've really tried to bring that discipline through
Speaker 4: our classes and through our one on one relationships out
Speaker 4: to the farm which never had access to this type
Speaker 4: of education. That's where a business came in, disciplined thought
Speaker 4: process that their buyers use.
Speaker 5: If you look at all the companies that have been
Speaker 5: around forever in the commodity side, they're all hyper disciplined.
Speaker 5: They all share the same culture and approaches and their hedges,
Speaker 5: and we try to have that mindset lead into the
Speaker 5: practice of our students and clients.
Speaker 2: All right, Jeff and Mike, thank you once again for
Speaker 2: coming back on all thoughts. Truly the perfect guests at
Speaker 2: the perfect time, So really appreciate it.
Speaker 4: Yeah, thanks for having us appreciate it.
Speaker 3: It's fun to hear that you know, we're in our
Speaker 3: New York City apartments like doom scrolling Sunday night futures,
Speaker 3: and we're all doing the same thing. The farmers out
Speaker 3: in the middle of the country and those of us
Speaker 3: all we're all looking at that open but thank you
Speaker 3: so much, those are bland you beat.
Speaker 2: Thank you so Joe. That was really really interesting, and
Speaker 2: I feel like even though we spoke for quite a while,
Speaker 2: we've still only scratched the surface. It's a big topic, right,
Speaker 2: But one of the things that stood out there was
Speaker 2: the importance of land, yes, ladin costs, and also competition
Speaker 2: from abroad, because I hadn't really thought about that before.
Speaker 2: We are used to hearing the phrase that buy land,
Speaker 2: they're not making any more of it, But if you're
Speaker 2: deforesting Brazil or Indonesia, it turns out you are making
Speaker 2: more farm land.
Speaker 4: No.
Speaker 3: I thought that was a great point. There's been a
Speaker 3: lot of interest in reporting, including from our Bloomberg colleagues,
Speaker 3: about specifically Chinese agriculture investments in Brazil and how much
Speaker 3: they're building up that linkages and so obviously still today
Speaker 3: as they put it, you know, Trump tries to make
Speaker 3: some soybean sales and the American farmer sort of has it.
Speaker 3: They could play each other off, discipline the Brazilian farmer
Speaker 3: by buying some American beans, et cetera. But there is
Speaker 3: this really big farm ecosystem that continues to grow, also
Speaker 3: continues to get very productive. They're using some of the
Speaker 3: top of the line Chinese equipment, which we know is
Speaker 3: very good, and yeah, that's going to continue to undercut
Speaker 3: the American exporter.
Speaker 2: Do you think the farming evolution and the productivity revolution
Speaker 2: is going to be a good analogy for AI for
Speaker 2: everyone else, for the white collar working class, you.
Speaker 3: Know, it's I don't know, probably not, but it is interesting.
Speaker 3: There was actually something out literally today. I think some
Speaker 3: hdge fun put a thing like trying to push back
Speaker 3: some of the doom scenarios, and they're like, oh, you know,
Speaker 3: we used to be so much agriculture based, then it
Speaker 3: went away, but we have other jobs, et cetera. But
Speaker 3: that was like one sector, you know, Like, I'm not
Speaker 3: very like, I'm not very comforted by any historical analogy
Speaker 3: where the technology just applies to one sector of the like, oh,
Speaker 3: like bank tellers didn't disappear after the ATM was introduced.
Speaker 3: There was one, right, and we're talking about the whole knowledge,
Speaker 3: but like the entire the human brain being replicated. So
Speaker 3: I'm not no, I'm not that. I don't take too
Speaker 3: much comfort from that.
Speaker 1: All right.
Speaker 3: It's bad and it's tough for farmers.
Speaker 2: Yes, no, that's my point. My point is that the
Speaker 2: experience of small scale farmers can be coming to all
Speaker 2: of us because it's it's just going to be about
Speaker 2: scale and capital investment. Yeah, how big your tractor is?
Speaker 5: I know?
Speaker 4: All right?
Speaker 3: Shall we leave it there, Let's leave it there.
Speaker 2: This has been another episode of the Authots podcast. I'm
Speaker 2: Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 3: And I'm Jill Wisenthal. You can follow me at the Stalwart.
Speaker 3: Follow Mike and Jeff they're at Agris Academy. Follow our
Speaker 3: producers Kerman Rodriguez at Kerman armand dash Ol Bennett at
Speaker 3: Dashbod and Keil Brooks at Kilbrooks. And for more odd
Speaker 3: Laws content, go to Bloomberg dot com slash odd loads
Speaker 3: where of a daily newsletter and all of our episodes,
Speaker 3: and you can chat about all these topics twenty four
Speaker 3: to seven in our discord Discord dot gg slash odlines.
Speaker 2: And if you enjoy Odd Lots. If you like it
Speaker 2: when we do these agricultural episodes, then please leave us
Speaker 2: a positive review on your favorite podcast platform. And remember,
Speaker 2: if you are a Bloomberg subscriber, you can listen to
Speaker 2: all of our episodes absolutely ad free. All you need
Speaker 2: to do is find the Bloomberg channel on Apple Podcasts
Speaker 2: and follow the instructions there. Thanks for listening.