What do you do in the winter?
Many in the agriculture industry slog through 12-16 hour days – 7 days a week – during planting and harvest season. Logistics involved in a large operation resemble the ATL control tower over a Thanksgiving weekend.
A team coping with that complexity is no small feat. However, just like a finely tuned factory does not make money by merely producing the product; a farm does not make money by merely harvesting massive amounts of crop. The capital allocation, value creation, and prudent integration make any profitable business.
Boiling down complexity into manageable pieces marks the best minds and businessmen. The best farmers have this in spades. They may not be able to tell you how a P&L statement fits together for each piece of their organization, but they know where to allocate time and capital – frequently on the things they can control. This is what they do in the winter, and, for that matter, every other season as well.
While investing in ag-tech, land, and other derivatives of agriculture has increased in popularity, the operations of agriculture, the basis of all of these investments, is weakly understood. Several good sources exist about land, tech and large agricultural inputs company investment. The lack of a source for information about an operating farm in the context of these seems like a worthwhile niche to fill. The problem is an interesting one for me to work through.
A few topics I’d like to explore include:
- Who is the American farmer?
- What are the economics of a farming operation?
- Agtech – winners, losers and the easy button
- For whom are land values justified?
- Why is uber for farming a terrible idea?
- Why is there no Halliburton of farming?
- Will the large and increasingly larger inputs companies continue to be cash cows?
- The punch card problem
I am committing to at least one of these big topics a week.
Pay Dirt 