Our Founder/Managing Director – Michael DeSa – was invited by Bob Louthan last month to join him on the Spotlight podcast hosted by the Veteran Crowd Network. They discussed everything from Mike’s time at Texas A&M, his diligence trip to South America, the power of making long-lasting connections, and tips for transitioning veterans looking to step into the entrepreneurial space.

When Mike was 10-years old, he sought to join the US Marine Corps by writing a letter to his local recruiter, expecting to join soon thereafter. The recruiter wrote back telling Mike to come back when he was 17. Steadfast on becoming a Marine, he completed his education at Texas A&M in Agricultural Engineering, and after receiving a commission into the US Marine Corps, went on to be an Infantry Officer for the next 7 years.

Today, Mike is the masterminds behind the company that is AGD Consulting. He is also a published author in Global AgInvesting News, Global AgInvesting Gazette, AgTech Nexus, Agri Investor, Huffington Post, and the Marine Corps Gazette.

Listen to the full recording here

Or enjoy the transcript from the conversation below!

——————

Bob (00:14):

Welcome everybody. This is Bob Louthan and host of the Spotlight, and I’m pleased to have as my guest today, Mike DeSa, the Founder and Managing Director of AGD Consulting. And just to give a little background on him, he’s a Texas A&M graduate, a member of the Corps in the Class of 2007. We’re going to talk about some of those nice high boots those seniors got to wear. He went to Texas A&M on a Marine Corps scholarship and commissioned as an Infantry Officer in the United States Marine Corps. Mike, welcome to the program. Thanks for being here.

Mike (00:50):

No, thank you for having me, Bob. It’s really a pleasure.

Bob (00:52):

Well, it’s good to get to know you. I always like to start out with our guests and learn a little bit about their background. Where’d you grow up and how’d you end up you know, pursuing a Texas A&M [degree] and going into the Corps. I want to hear all about that. I like the Aggies.

Mike (01:09):

Yeah, sure. I grown up in San Antonio and I had always been interested in the military, but it wasn’t until I was really 10 or 11 that I can remember sending a handwritten note to the [local] Marine Corps office. I think it was one in the San Antonio area saying, “Hey, I’m interested in joining. What’s the process?” The head of that office actually responded back with a typed note that said, basically thanks for writing, but you can’t really join until you’re 17. Come back to us then.

Bob (01:47):

World War II veterans lied about their age to get in the Marine Corps, right?

Mike (01:52):

Sure. Even at 10 or 11, I think that would have been a hard sell, but I can remember thinking, wow, that’s really impressive that they would respond. And at that point it looked like it was a typewriter generated-note that they had hand signed. Enclosed with the note was a poster, the typical picture of the Marine in camouflage with a dark background and a weapon. That poster hung on my wall basically until I left for college. And it just so happened that I joined the junior ROTC program at the high school I went to in San Antonio and lo and behold, the senior enlisted advisor at that program was a retired Master Sergeant – Tony Cavazos. That was pretty much it. I graduated high school, got a scholarship in the Marine Corps, spent some time at A&M and then was commissioned in the Marine Corps in December of 2007. And I remember asking Master Sergeant Cavazos to come back at commissioning. He actually gave me my first salute. And so you had this sort of full circle kind of mentorship. So it was really impactful for me.

Bob (03:09):

I’ve always been impressed with the Corps at Texas A&M. You’re one of the seven senior military colleges like Norwich, Citadel, VMI, Virginia Tech’s Corps as an example. And of course, you’ve got the Texas Aggie band, which I just, you know, that’s probably a bucket list item for me, see them perform at the halftime of a football game. But tell me a little bit about being in the Corps there. I mean, it’s a pretty big enterprise, but part of a much larger school.

Mike (03:46):

Yeah, it was. And candidly, I didn’t know much about it at first. I had it set in my mind that the Naval Academy was really where I wanted to end up and I had made it all the way through the Senate application and approval process. And I was set on going but for some reason, towards the end of the process, it didn’t feel right anymore. And I remember a relative saying to me, well, what about A&M, what about the Corps of Cadets? And it opened at that point, a whole other door for me that I didn’t even know existed that was four hours from where I grew up. So, I went down there, spent the night with the Corps of Cadets, where you go and you stay with either a sophomore or junior in their room. And you experience an evening formation, an overnight, and a morning formation. If you’re lucky enough to go on a Saturday, you can stay through a march-in. And at that point that I realized that there was a lot about the Corps of Cadets that was fitting as to how I wanted to spend my time in college. It was not obviously a typical public university time, but one I very much enjoyed.

Bob (05:05):

What is the first year like? I mean, they put you through sort of a Plebe year, correct?

Mike (05:13):

Yeah. From what I understand, it’s very similar to what Rats go through at VMI. A guy whom I served with in the Marines was a VMI guy, and we exchanged stories about it. It turns out that there was a lot happening that was similar to what we experienced through the Corps of Cadets at A&M.

Bob (05:31):

What do they refer to first year cadets?

Mike (05:40):

Fish. All of your time, from the time you wake to the time you go to bed, is structured. So you’re up early, you’re doing some type of activity with the unit (the Corps of Cadets is all broken down into different units). And because I was on a Marine Corps scholarship, I was in a Navy/Marine Corps unit. And it just so happened that my unit, K-2, was also the same unit that my future wife’s father was the CO (Commanding Officer) for as well as the First Sergeant, sometime in the 1978/1979 timeframe. And so it was just sort of divine intervention I think at some point. But you do a morning formation and then usually about seven or eight, after breakfast with your unit, you’re off to classes most of the day. But what you still do during the day and how you treat upperclassmen and interact when you get to certain areas of campus are all very regimented and controlled. And then when you show-up in the afternoon, we’ve got an entire two hours or so of afternoon activities. Some are good and some are not so enjoyable. And then

Bob (06:55):

It’s a lot about time management, isn’t it?

Mike (06:58):

Time management, physical fitness, responsiveness to orders. I mean, a lot of the same stuff that you experienced. It was pretty tough through that entire first year, both semesters until you finished that year. And then you show up the next year as a sophomore or a “pisshead” at that point, and your sort of directly responsible for training of the [new] freshman class. So it was really a unique experience, one I didn’t really know existed at all, but one I wouldn’t change.

Bob (07:36):

So you graduated from A&M in 2007 and go into the Marine Corps?

Mike (07:43):

Correct. After A&M, I went through The Basic School in Quantico, which every Marine goes through after they get commissioned and depending on how you perform there, you pick up your Military Occupational Specialty (MOS). And I was in the top 1% of the class, so I picked up infantry, which is where I knew I wanted to go. And then the Infantry Officer Course which is actually right across the street from The Basic School. So, I spent another three months there and then went to 1st Battalion, 9th Marines (1/9) in Camp Lejeune, North Carolina as my first duty station as a Platoon Commander. And that really started a seven-year career. My first deployment was with the 24th Marine Expeditionary Unit (MEU), which 1/9 was the Infantry Battalion in support of the MEU. My Company, Charlie Company, was the helicopter company for the MEU. They have other companies like the Truck Company, Tracks, etc. As part of that deployment, we first stopped in Haiti after the earthquake 2008, where we performed some disaster relief and damage assessment work. We did some small unit training and program development work in East Africa and the Middle East (Jordan) before coming home later that year. After that, I moved up to the Executive Officer (XO) position and then deployed to Afghanistan 2010.

Mike (09:17):

At that point, it was a really decentralized footprint, very partnered-focused. As a company of 250, we took over a 350-square kilometer battlespace that had previously been held by 2,000 Marines. We were tracking and maneuvering against an enemy that used anonymity to the best of their ability. We had Marines and DoS supporters spread out across 15 to 18 different positions across that area. There was a lot to manage and track, but the interesting thing in a way, I think, is how many of these learned skills relate to agriculture. We learned to deal with fluid, interconnected environments and people, the benefits of putting a local face on a solution. We learned to triage and solve the most pressing problems first. We actually used a lot of data; patrol-generated data to facilitate operations, human data and intelligence to drive operations. These challenges and learned solutions, I would find out later as I stepped into agriculture, were not that dissimilar. In fact, they were very similar to some of the same challenges that you face in agriculture.

Bob (10:47):

So, here’s the transition question – how did you get into the ag industry? Tell us the story of how AGD came into being.

Mike (11:01):

A couple of years before I left the active duty, I felt like I was being called to walk a different path, one that was more entrepreneurial in nature. It just happened that at that time in my life, I was looking to invest in something tangible, uncorrelated – an asset class with appreciative value. And I also wanted something that was geographically diversified away from the United States. I had previously invested successfully in Latin America in the past, so I had a general idea of how it worked and what the region was like, but I had never really considered the production side of agriculture as an investable asset class. The previous deal was more land development than it was production agriculture, but as I started to look at [production agriculture] more, it had a lot of the same criteria that we were looking for – lack of correlation, tangibility, positive appreciative trend, etc.

Mike (12:11):

So, this really set off about a two-year research endeavor for us into all regions of the world that could support increased demands on agriculture in the coming years. And what we found was that Latin America had a lot of these different criteria we were looking for. So, we understood the fundamental challenges of investing in a foreign region without boots on the ground experience. Therefore, we knew very quickly that we needed to see this for ourselves. When I left the active duty service in the summer of 2014 and in early 2015, our family executed what would probably best be described as a six-month, six-country due diligence trip down into Latin America. I think all total 15,000 miles or so traveled. We looked at a 100+ different assets across the agricultural value chain and ended up investing again in a mixed ag project in the Southern cone, which we still manage today, but Ecuador, Peru, Argentina, Chile, Uruguay, Panama, and Colombia [later].

Mike (13:27):

We tried to really see and experience as much of it as we could to build the groundwork for the consulting company, AGD, which I started in the early part of 2016 after we got back and got resettled. Today, we’re on a small farm near the Longview, Texas area, a couple hours East of Dallas. You could probably best describe it as a subsistence farm or a small-scale farm where we grow and raise most of what we consume – vegetables, leafy greens, garlic tomatoes, some tree fruits. We do some greenhouse work hydroponically. We have bees for honey and pollination, laying hens for eggs, broilers for meat, goats for milk and cheese, and cattle for beef. I mean, you name it, we’ve tried it. We also try to do as much of the processing and storing in house and ourselves as we can. It’s not a commercial endeavor for us. It’s more of a way of life and it’s something that’s really a part of both who we are personally and professionally.

Bob (14:42):

You’ve got an initiative for veterans in ag and talk some about that and some of the skillsets that you think veterans bring

Mike (14:52):

Yeah, I would have never really, again, put these two things together until about two years ago. I had started writing for a publication group called New Ag International – one of the largest, if not the largest, publication organizations and events groups for high-tech and precision agriculture. So we had published a couple articles with them and developed a relationship with their staff. After we wrote an article for our own organization about different tools of the trade, if you will, their staff reached out and said, look, we’d like to do something bigger together here. There’s lots of coverage on the mental health benefits and the transition benefits of a veteran going into production agriculture – a sense of purpose, a part of something bigger, producing something again with your hands. And so…

Bob (16:05):

Do you have any statistics about veterans in agriculture? I mean, this is an underserved market? Is it hard to figure out?

Mike (16:13):

There are no numbers that come to mind off the top of my head, but there are a number of organizations that support this. The Farmer Veteran Coalition, the USDA has several programs that specifically target veterans. There are certain pockets of money through different organizations that are designed to help veterans transition into these kinds of organization. There are lots of these sorts of intangible benefits that are specific to ag that veterans, I think, find attractive that they used to do in the service, but things like we had talked about – the ability to cope with fluid situations, etc. Agriculture is very interconnected. There’s lots of different factors that influence it, just like there’s lots of factors in a military member making a decision about an enemy or a unit action. We understand, as veterans, the idea of skin-in-the-game also, right?

Mike (17:16):

As veterans, we have vested sometimes our own lives and wellbeing in a mission, just like producers today are vested in their land. This is their livelihood. This is what they do to survive, but it’s more than that, right? It’s generational and this ability to understand skin-in-the game, triage these different problems and which to solve first that will make the most impact to yield, the same way that military members triage problems. And so, there’s all these soft skills, if you will, that I don’t think have the voice they need yet. And so, what we wanted to focus on with New Ag was bringing to light the skills that are unique to agriculture and, and the business side of agriculture in particular – running teams and organizations – all the way through to perhaps entrepreneurship. And so, what we’re starting to put together with New Ag is as holistic of an approach as we can as we can think of, targeting different parts of the transition process. So groups like Bunker Labs, Patriot Boot Camp, Centurion Military Alliance (CMA), HireMilitary, etc. We want a voice for them and to bring to light the issues that veterans face during transition that perhaps corporate agriculture or the business side of agriculture do not know about yet. Then we want to bring together the sort of recruiting end of things because sometimes veterans are not great at talking about the things that they did. There’s a humility factor in there that maybe feels uncomfortable to come veterans.

Bob (19:07):

No, I don’t think there’s a whole lot of farming that got done in the Marine Corps either. You know? And so, it’s a translation of skills and disciplines that sometimes you get stove-piped, you know as there are not a whole lot of positions from machine gunners in the private sector either. What are some of the steps you’ve taken so far that have led you to where you are you today and then paint a picture of where you’re going, where you hope to be? I don’t know, next two years from now.

Mike (19:46):

Yeah. And so, I mean, we have tried to grow as a firm as organically as possible. So, one piece of advice that I would want to give to a transitioning veteran that might be thinking about going into entrepreneurship – start to save and plan for it as early as you can. Tuck a little bit of money away every month, try to live as modestly as you can, because if you’re going to start something, oftentimes the easiest and most efficient way to do it is to bootstrap it, which is what I’ve tried to do and what we’ve done to date. But that takes preparation which starts while you’re still in the service and while you’re getting a paycheck. The other thing I would say is that I never would have guessed how valuable the construction of a network is and would be to starting a business. And I’m not just talking about the Aggie or, A&M network. I’m not talking just about the veteran military network either. I’m talking about the network that you build within the industry that you want to go into. It takes time to build this network and often, that time that you’re spending building it is not generally paid time.

Bob (21:03):

Well, let’s talk about that for a second, because you know, when you’re in the military, you have a military network, right. But you were in Jacksonville, North Carolina and now you’re in the Plains of Texas. You picked up and moved your family. So part of the transition problem is that veterans typically don’t stay where they are. The second thing is they have a military-based network and they haven’t cultivated a professional network. So if you could give one or two pointers on cultivating that professional network, I mean, how did you do it? And did you use tools like LinkedIn or what was the approach?

Mike (21:46):

I’d say there’s a couple of points. The first is that you would be, at least I was, surprised at how diverse the network base can be from within the military community. So there’s group of guys that I’ve served with and mentors and leaders at different points in my career, whether that was teaching at the Infantry Course, 2nd-in-command of a company, etc. Those leaders that you respect have their own networks, and maybe they did careers before the service, but there were lots of instances where that’s the first place I would turn. Again, you would be surprised what recommendations and networks they may be able to point you towards. So, you start where you’re comfortable. The second thing that I did that doesn’t cost any money and is a very efficient way to start to build a network is to start writing, to whomever will listen.

Mike (22:43):

A little bit a day, write a couple hundred words a day describing what it is that you want to do, or what you find interesting about where you want to go. And then before, you know it, you start to get decent at thinking about the things that are important, the challenges with an industry and possible solutions. Start to write and put your thoughts out there and lo and behold, that not only builds your network within the industry that you want to go into, but it also starts to get your brand out there.

Bob (23:17):

You are blogging? Where are you blogging about the subjects you’re interested in?

Mike (23:21):

I first started writing a little bit for the Huffington Post. They had a travel section when we were in Latin America, so I started there and we quickly realized the value of what that could bring. When we came back and started AGD Consulting, we dedicated a section on the website to our own content. And then we realized that there are gobs and gobs of efficient and respected publications within the industry that we just started building relationships with. “Hey, I’d like to offer you some content,” or “I’ve got this idea on sustainability and technology within the cotton industry. Do you mind if I put something together for you?” Most of the time they’re always looking for content as well, so if you can develop a technically-supported piece of content that speaks to the industry that you want to go into, adds value, a new perspective, or perhaps incorporates some of the things that you experienced in the military, then you’re talking from a base of experience and also getting your point out there and building a reputation.

Bob (24:37):

So, to the listeners, I mean, you just hit on a very important point. I mean, so creating content, it creates value. We’re an open society now with social media and so forth. So how do you get your message out there and in doing so you know, you create the image or become a thought leader or an expert within the industry. And it’s a great way to expand your network. And I can’t say enough about the importance of this. I sort of call it “digging the well before you get thirsty”, or you just never know where these relationships are going to come from. And when you might need somebody who has connections in a certain place. If you only have 250 people on your LinkedIn you know, connections, you need to get to work, you need to have thousands and play that to start.

Bob (25:42):

What was the number? Hundreds of millions of people I think on LinkedIn right now. And it’s just, we don’t know them all yet. We’re not finished. So tell me a little bit, who are your competitors and how are you, how do you sort of fit in the market? I mean, if called you up tomorrow and said, I need your help. What are the services that you provide if you were going to list them?

Mike:

Yeah, I would categorize them as things like independent due diligence, business development and market access and access to earlier stage or later stage type capital, depending on where you are. And I think in support of diligence services, we’re unique in that we can work on behalf of either a buyer or a seller as we’re generally unencumbered by return hurdles or geographic mandates typically associated with private equity groups and institutions

Bob (26:44):

What are the type of client’s you’re working with?

Mike (26:45):

So typical clients are private equity funds specific within agriculture, asset managers, agricultural technology start-ups, and/or producers themselves to which they need one, if not many of those different kinds of services. But as a…

Bob (27:03):

Let me interrupt you. A lot of people have heard about aquaponics. And so what’s sort of an interesting agricultural technology that maybe I haven’t heard about. Is there something out there that’s just really cool that comes to mind, Mike?

Mike (27:21):

Oh, there’s so many. You talked earlier about [the reality that there] may not be a direct applicability in agriculture for a machine gunner, for example. But the point I would make back is probably not a machine gunner, but if you were a drone operator in the Air Force, then all day long, you’ve got applicability in the agricultural space. If you were…

Bob (27:46):

I’ve heard about people flying drones over fields and kind of assessing the moisture and, and those types of things and figuring out how to affect a unit.

Mike (27:56):

So that’s one. They have drones that have different sensors on them, different cameras. Most of them are autonomous. They fly out on a pattern and those images can be used to build different kinds of agricultural maps that help you make decisions. They also have ones that have payloads in tanks that you can fill with crop inputs that fly a certain distance off the ground that deploy that crop input chemical.

Bob (28:35):

So that’s kind of fascinating stuff, you know, in the U S agriculture, are we leading the world in productivity in terms of agricultural output or…

Mike (28:46):

In terms of what we actually pull out of the ground?

Bob (28:50):

Are we lagging behind others, you know, and in different areas?

Mike (28:53):

In the permanent crop space like almonds or stone fruits, they have a strong presence in Western United States and the Pacific Northwest. When you look at more row crop type, soybean and corn, we’re generally isolated what we can grow based off of climate in the Midwest. But when you look at a country like Brazil or Argentina, where land masses capable of producing crops are significantly larger than they are in the US. And so again, it kind of depends on what you’re raising and who you’re trying to sell it to because that has a big factor as well. If you’re a European producer, you’re a lot closer to China than, than we are. And so, there’s a lot of nuances…

Bob (29:48):

It just all depends. I’ve also seen an enormous amount of investment recently in greenhouses to bring things like leafy greens, closer to the markets. Right now, a lot of lettuce comes out of California as an example, so why not have a greenhouse in Pennsylvania and serve New York City?  You can get fresher product, less time to the table, those types of things. There’s a lot of investment going on there. Have you done any work with in, within that side of the industry?

Mike (30:20):

Yeah, we have, actually. We looked at some renovation work for one of those kinds of larger-scale, more localized greenhouse producers. They were looking to transform what they had done into a different crop type. But I think you hit on it when you described what these localized greenhouse production companies are trying to do, which is – bring the food source closer to its consumption. Right? They’ve got these display shelves now that they’re talking about putting these miniature greenhouses within supermarkets. They’ve got these kinds of standalone units that can go right into a display area. The whole thing is about number one, bringing that food closer to the consumer, it’s about making the supply chain that brings that product to the consumer more efficient. And if COVID has highlighted one thing within the agricultural space, I would say it is the fragility of our supply chain.

Mike (31:29):

In a lot of ways, it’s very complicated. It’s lengthy. It comes from operations that do things at scale, right? And so, when you look at right now abattoirs or smaller scale processing companies, on the rise, you have to wonder why? When Smithfield shut down several of their plants because of concerns over COVID, they shut down millions of pounds of product that was supposed to be destined for the consumer market. Well, consumers then said, “where am I going to get my meat from?” And they had never really looked locally or within their own communities that said, “Hey, there’s a local processor, 10 miles down the road here. It may cost a little bit more, but I know exactly where that food came from. I know exactly how it was produced and I can buy it right now.” And so right now you have these small-scale, decentralized processors that have months-long waiting lists of getting producers and product, their cows, or their pigs to their processors, because they can’t keep up with the demand. So, it’s really interesting.

Bob (32:42):

And then you have an E. Coli breakout somewhere, and all of a sudden, you know, you’ve got real issues there. So, a final couple of questions – if you could go back and talk to you know, Lieutenant DeSa right now, you know, go back 10 or 15 years, what would you say to that young second Lieutenant in the Marine Corps? And you know, what’s the next six months look like for you?

Mike (33:13):

So, I struggled a lot in the service at first in the sense of, I think I’ve got a fairly strong work ethic and attention to detail tends to be at the top of the things that matter to me. But what that did in the service as a young second Lieutenant was slow me down. Because I was always waiting for all of the information. I was always trying to put together the plan that could not be undone by the enemy. And it just, it just didn’t work.

Bob (33:51):

That doesn’t exist. Does it?

Mike (33:52):

I had to make a lot of decisions over time without all the information. And what I found was that the more I did it, at least in my experience, the better at it that you got and the faster that you got. As the Company XO (Executive Officer) in Afghanistan, the day-to-day operations were really sort of my responsibility. I can’t tell you a number of times that you’re in a command type center, whether it’s where you were stationed or where you had set one up, where you have to make a very fast decision with not a lot of information and then task those units to support that decision. And I wouldn’t have believed you had, you told me when I was 23, that you kind of suck at this right now, but the more you practice it, the more you do it, the better you will get at it.

Bob (34:49):

You’re not old enough yet, but you know, it takes 20 years to get 20 years of experience. You get comfortable with that decision-making process. The good thing about the military for a young person is it forces you into a position where you have to make those decisions. And some of them have a great deal of gravity to them right now, they’re life and death decisions. How does someone get in touch with you? How do you how do we reach out to you?

Mike (35:20):

You can check out our website at www.desaconsultingllc.com, or you can just do a Google search for AGD Consulting.

Bob (35:33):

Do you participate on any social media platforms and putting any stuff up?

Mike: LinkedIn

Bob: We’ll put links to Mike’s connections here on the show notes. Really appreciate you coming out today and speaking with us. We’ve been talking with Mike DeSa, the Founder and Managing Director of AGD Consulting. And you know, this is the Veteran Crowd Spotlight. We publish on Tuesdays and Thursdays and are available on Apple podcasts, Google, Spotify, and Anchor among others. And I really appreciate Mike being our guests today. And thanks so much for coming out.

Mike (36:19):

No, my pleasure, Bob, really thank you for the opportunity.

Bob (36:22):

Again, you’ve been listening to the Spotlight on Veteran Crowd, and we appreciate you joining the show. Look forward to hearing and speaking with you again, take care.

Earlier this month, AGD’s Founder/Managing Director, Michael DeSa sat down, virtually, with Tim and Tyler Nuss from The Modern Acre podcast. They covered a range of topics from the impacts and opportunities within ag from COVID, starting a consulting firm, Michael’s take on agtech, and much more!

Every week on The Modern Acre, Tim and Tyler Nuss, brothers and fifth generation farmers and entrepreneurs, put a spotlight on the entrepreneurs, innovators and leaders that are changing the food and agricultural industry on and off the farm.

Enjoy the transcript from their conversation below!

—————

Tyler: Hey guys, you’re listening to episode 126 of The Modern Acre, presented by FarmTogether.

Tim: We have a really great episode this week with Mike whose the Founder/Managing Director at AGD Consulting.

Tyler: Well, guys, super, super thankful you guys are tuning in. Really appreciate you listening, excited to really kick off this sponsorship with FarmTogether, and I appreciate their support. But today we have an awesome episode with Mike DeSa, he’s the Founder and Managing Director of AGD Consulting, and we just have an awesome conversation about his background and what he’s built in the consulting space. I think it’s very unique, and he focuses a lot in South America and overseas investments, which I think is really interesting.

Tim: Yeah, Mike’s a veteran, so we talk a little bit about his experiences there and the carry-overs into agriculture, which I thought was really cool, and we also talk about his thoughts on COVID and how he sees that impacting the agtech space.

Tyler: Yeah, there’s a ton of nuggets, as I like to say, in this episode, Mike just has a ton of value to shares about starting his own business, but how he’s thinking about the industry as a whole. So without further ado, let’s jump in.

Tyler: Hey, Mike, welcome to the show. Great to have you here.

Mike: A pleasure to be here, guys. Thanks for having me.

Tim: Yeah, we’re super excited to talk to you about what you’re building at AGD, but before do you  were sharing a little bit about your perspective on how COVID is impacting the small producer space? Maybe talk to us a little bit about that.

Mike: Yeah, I think that it’s no surprise that traditional supply chains have been disrupted. I think that consumers are concerned about empty grocery store shelves, and so we wanted to sort of take a look at this as an opportunity in some ways for both tech and localized production to kind of re-shape some of the supply chain, and so we put out something not too long ago, an expert round-up of forms, if you will, where we interviewed several experts from across the value chain, representatives from the US Grains Council, The Yield Lab Institute, Bonnefield, Texas Farm Credit, to kinda gather some insights as to how COVID was impacting subsistence, hobby, smallholder type farmers here in North America, and what we found interestingly, was both anecdotal and concrete evidence of the increasing number of consumers really beginning to care more about where that food is coming from, and that it was coming from somewhere local, and in some ways raising it or producing it themselves. And this sort of rise and interest in locally grown food with shorter supply chains, we think may be beginning to propagate down into the sector with the shortest supply chain.

Your own backyard.

Some of that anecdotal evidence includes an increase in purchasing for laying hands, locally sourced protein for consumption and rearing, etc. Obviously more people jumping into backyard gardening and hobby farming with more time, and we think this may be the beginning of or signal and accelerated shift in our supply chain towards not only resiliency and sustainability of which tech can play a role in.

I think that historically, smallholder farmers have not been the target market for agtech startups for a number of reasons: disaggregation, lacking in scale, often lacking in discretionary income and spending for that kind of adoption is not there, but what if this was a way to aggregate this class of growers in a meaningful way that could increase adoption? What if animal processing was done in a decentralized way with smaller processors all over the world? What if a CSA type models that set up more purchasing power for producers, lower barriers to entry? What if these were the beginnings of momentum to bring together what has been historically a separated market to one that could be taken advantage of with technology. Certainly this trend is still in its infancy and will continue to evolve as consumer preferences sort of settle into a new normal. The longevity, I think of the hobby or subsistence or backyard farmer remains somewhat to be seen, but what I think is really clear is that today can present an opportunity for this kind of grower to adapt technology solutions and in some cases, sustainable farming practices or the right grower with a bias for, I think, change in innovation.

Tyler: Yeah, I totally agree. Tim and I have had multiple conversations about this exact topic about how COVID is really opening up some of these conversations about how do you have a more distributed supply chain and open the doors to local producers and connecting them with markets and so I think you’re spot on. And I think to your point, we are in the infancy of these concepts and local resiliencies and distributed supply chains and how all this plays out. I think we’re watching closely, but I think to your point, there is a big opportunity for agtech companies that wanna jump into this space. A lot of times, we see the agtech companies focusing on the vertically integrated supply chains, the highest volume crops versus what some of what you mentioned. So I think it is time that we start seeing some of the investment and the companies focused on this.

Mike: And that by no means me, it will be an easy challenge for that path to be paved, and it’s unfortunate that it took a pandemic to perhaps serve as that tipping point, but I certainly think we’re there.

Tyler: Totally

Mike: The momentum is behind us now.

Tyler: Totally, yeah, I think to your point, there was already a lot of interest from the consumer about where their food was coming, and then the fact the pandemic hit at that time, I think really did, potentially will prove as the tipping point. But, Mike, let’s jump into a little bit more of your background. Tell us about where you grew up and your early career.

Mike: Absolutely. I am originally from San Antonio, Texas, and while not a farm kid, we always did have some kind of backyard garden growing up. My technical background is in Ag Engineering with an emphasis on power and machinery from Texas A&M. I was a member of the Corps of Cadets there. I was on scholarship actually with the US Marine Corps, and so when I graduated, I then spent the next seven years in the Marines on the infantry side. Had the chance and opportunity to do some disaster relief work in Central America. We did some small unit training and program development work in parts of Eastern Africa as well as the Middle East, and then a combat deployment to Afghanistan in 2010. A very decentralized, to our points earlier, partnered mission that was across a 200+ square mile battlespace while we were trying to track nearly $40M worth gear and an enemy that utilized anonymity at every opportunity. And in that role, was second in command for that 250 personnel group. It really was an experience in learning how to deal with fluid, interconnected environments and people. We learned the benefits of putting a local face on a solution, the ability to triage problems and then sometimes and instances people themselves to solve and render aid to the most pressing ones first. We learned to pool and then task resources, use data and intelligence, human intelligence, to drive operations, and I think a lot of the same learned skill sets have a unique applicability to the agricultural sector. I was fortunate enough to bring everybody home Christmas time of that year to where I then transitioned my last two years in the service in instructional capacity. Got selected to teach it a couple of the Marine Corps’ more rigorous schools. And in that capacity, formally lectured class sizes from 80 to 250, etc. The unique thing, I think, is that in the final school I was at, it was very infantry-specific, but at its foundation, was rooted in how to train and evaluate leadership skills in uncertain and dynamic environments. Not that dissimilar in many ways to what we just., or are currently going through.

And so I think a lot of these skill sets are and will be applicable within the private agricultural sector as we as a firm or aiming to try to transfer some of these skills to investment funds, accelerators, private equity groups, to help them build out the objective measures they need to evaluate, for example, leadership or unity or cohesiveness.

A couple of years before I left, so I left in the summer of 2014, but a couple of years before I left, our family felt like we were being kind of called to maybe walk a different path, one that was more entrepreneurial in nature and separate from military service. Coincidentally, this was also at a time in our lives where we were looking to invest in something tangible, uncorrelated that had appreciative value and was also geographically diversified outside the US. So we had previously and successfully invested and exited a more raw land type development project in the region in Latin America in 2010- 201 time frame. So we understood the region, but we had never really considered the production side of agriculture before as an investable asset class. So this sort of epiphany set us off on what would best be described as a couple of years’ worth of desktop research into all regions of the world that could support long-term demand requirements on ag and had under-valued potential. What we found through that research was that Latin America, at least foundationally, met many of these criteria, but having invested in it before we understood the challenges of putting capital to work in a foreign country without boots on the ground experience and a network, and the regionally-specific support. So we said we need to go see us for ourselves, and in the early part of 2015, my wife and our three boys, who at the time were four years old, two years old, and six months old, executed a six-month, six-country due diligence strip down in the Latin America. I think total, we spent traveled about 15,000 miles. Ecuador, Peru, Chile, Argentina, Uruguay, and then finally finished in Panama in August of that same year. We looked at over 100 different assets across the value chain, and we ultimately ended up investing in something, a mixed ag project in the Southern Cone, which we still manage today.

I think in addition to showing the boys that there was this whole world out there that they could explore that had different people and cultures, and that there was more beyond what was in front of them, was really important to us as one portion of that trip. The second was to really build out a network of producers, land managers, financial relationships, which laid the groundwork for AGD Consulting, which I started in 2016. Today, we’re settled back in Northeast Texas. We live on a small subsistence farm ourselves, where we grow and raise most of what we consume: vegetables, leafy greens. We do a lot of what you guys do on the Nuss Farm – like tomatoes, although not to the same extent, obviously. Some fruit trees, we do work in greenhouse production, bees for honey and pollination, we’ve got laying hens ourselves, boilers for poultry, goats for milk and cheese production, pork, cattle for beef, and we really try to do as much of that in-house as we can. We butcher and process all of our own animal protein, store and can and manage all of land ourselves, and so it’s very much a way of life for us.

Tim: Wow, there’s so much to get into here. What an amazing background. And first off, thank you for your service. That’s incredible to hear your story and background there, and I guess to start, there’s so many things you brought up, which I think could be podcast episode in and of themselves, but maybe talk to us about this initial investment that got you started, maybe talk to us about how you got that in first investment going that led into AGD.

Mike:  We had always kind of looked at the geographical, the benefits of geographical diversification, and we knew that we had some criteria that we had built: tangibly, un-correlation, the ability to appreciate, but we never really connected the dots before until we had started just reading about the region and looking around, and we made our first trip down into Ecuador in, like I said 2010/2011 timeframe, and said, “this is a phenomenal region, it’s a phenomenal culture, the people here are fantastic, there is underutilized, undervalued potential, etc. There’s a lot of opportunity here and so that first investment was more of a kind of “get your feet wet”, there were some other co-investors, there’s less production, more development, but we were able to navigate some of those initial challenges of bringing capital overseas, putting it to work in a foreign jurisdiction, it was easier because it’s the US Dollar in Ecuador like it is here. So we wanted to do that process incrementally, and when we had success in that and were able to repatriate some capital and knew that we wanted to put some more back to work, and all of these sort of things and situations, I think divinely kind of united with my time in service coming to an end and us looking to put money to work as a family as well, and this idea about Latin America, so all of these things kind of aligned and then we said, “let’s go check this out for ourselves.” That prompted this diligence trip, which led to the second investment in, its actually down in Argentina.

Tyler: Tell us about… You go on this diligence trip, you obviously have an incredible experience and a successful investment, so talk us through the origin of building that out into your own firm, AGD Consulting.

Mike: It originally started with this idea of offering two services, one being strategic or advisory work and diligence for expedition trips to begin to take investors to showcase them, some of the same opportunities that we found.

So we actually built several, five – seven day all-inclusive trips to Argentina, Uruguay, Ecuador, Chile, and Colombia to both support, showcase and guide retail, high net worth investors into the region to experience it for themselves, and if a client was interested, we then have the network in place already to perform secondary or diligence, help that investor negotiate terms, close, etc.

So we work both of those avenues for over a year, but what we found was that the investors who wanted to put that kind of capital to work themselves or in the region, were the kind of people that wanted to digest those asset themselves. So we had that real market feedback in hand, and at that point, pivoted full-time and exclusively to the advisory services. So today, we are still 100% veteran-owned, strategic advisory firm that services the food, agtech and ag investment sectors globally. Clients typically include asset managers, private equity groups, agtech startups and producers, to which we provide services such as independent due diligence, market access and business development support, strategic partnership, sourcing, and access to capital for early stage and later stage, more institutional type, capital. When we originally started, we were focused heavily on just Latin America as an emerging market, but through the last several years have expanded into other emerging markets, such as Sub-Saharan Africa, parts of Eastern Europe, as well as here in our own backyard in North America, Australia, New Zealand as well.

Tim: Mike, when you look at the industry, maybe talk to us about what trends you’re seeing. You have a pretty interesting perspective evaluating investment opportunities and looking at a lot of businesses besides the one that we started with with the decentralized supply chain. What are you seeing as the highlight this year?

Mike: Domestically or abroad, or collectively

Tim: Maybe lets stick domestically in the US market

Mike: I think that the challenge is still the noise. There are so many new technology companies coming to market today and it is becoming more and more challenging for farmers to extrapolate out what’s the most unique and what would be the most applicable for them. Your discretionary incomes to be able to adopt that technology from a hardware standpoint, in today’s commodity cycle being towards the bottom with corn, wheat, soy, those kinds of crops, is challenging. So you tend to see, at least from our experience, broader adoption for hardware in sectors that have more margin in which to be able to deploy that capital, permanent crop space, for example, tree nuts, stone fruits, perennials, those kinds of crops are more able to adopt newer technology, at least hardware technologies, because they have a wider margin in their cost structure to be able to free up some of that cash. Farm management services and platforms, software as a service, data management, these kinds of models that have revenue basis around subscriptions or monthly participation; those tend to be in a little easier to adopt in smaller-margin producers just because they can execute it in a trial way and really kind of prove it out for themselves. Marketplaces are there, but there are some nuances depending on which kind of sub-sector with ag you want that marketplace to go in, but those are certainly at present nor do I think they’re going away any time soon. But in my mind, the biggest trend is still this somewhat of a disconnect between what the technology can do for the end user and which end user your targeting, and I think a lot of that message is lost because the economic, either economic value to the producer is not clearly articulated or the efficiencies that can be gained from that adoption aren’t readily apparent. You can’t just create a technology for the sake of creating a technology that doesn’t solve a real problem, and producers have real problems, but they want to know how that technology can either make them more efficient, save them money, or make them money. So, if technology companies can focus that economic and efficiency message to a specific target market in terms of what’s the return on this upfront investment in dollars or time, how quickly can they recoup that upfront cost if it’s a hardware adoption?

And so we still have to try to cut through some of this noise with a more clear message to the end user. It’s getting better, but I think we still have some work to do.

Tyler: 100%. I think you nailed it at the end there, about how it’s hard to find the sweet spot in terms of the technology that you provide and the value to the farmer, just because, to your point, I even think about my Dad right now, just how much he has going on on the farm, and it’s just a head down one day to the next, solving problems in real time, and it’s so hard to come in and convince someone like our Dad of technology, if there’s not that clear real-time feedback and value presented and you clarify it was either time or money.

So I think that’s so true, and I feel like there’s been probably the exception rather than the rule of companies that are able to really hit that sweet spot, so… I definitely agree.

Mike, maybe talk us through some of the challenges you’ve faced building this firm. You started this from scratch, and obviously you had some connections in the space, how have thing has been so far? And how have you scaled?

Mike: I would say those challenges have been many, but I would not say they have been unique to us. I think almost every start-up experiences these in some form or fashion, where you’ve got months of uncertainty about when that next client may come. You are trying to decide between spending revenue on growth of the business, putting some of that away for future uncertainties or just providing a living for your family, trying to stand out amongst other consultancies in our case, the Deloittes, the McKenseies and those kinds of groups, and trying to find the opportunity, and that’s really what I think it boils down to for us in terms of challenges, is just the opportunity to get in front of a potential client and communicate the story. It’s not even about at that point converting that prospect into a client, it’s just the opportunity to present the case, right? In some cases, that’s all you ask for. So that’s really been… I think if I had to sum it up would be one of our biggest challenges today, it’s just kind of that opportunity. If I’m going to look at scale from how we kind of built it, I would first maybe point out the marketing efforts that we tried originally. We did some targeted Facebook work early on, late 2016, early 2017, but that was at the point where we were still trying to reach two audiences, basically – groups that needed advisory services and people that wanted to take diligence trips. And so we were using Facebook to target retail and high net worth investors who were going to potentially do these kinds of trips, but it wasn’t the right audience. We should have been targeting the advisory side of things, and we should have been doing it on LinkedIn and not Facebook, it just wasn’t the right method of outreach for our group.

I’ve then just started writing to whomever would listen or read. It first started with me in the Marine Corps, I wrote an article on the way out about values and the underpinning of those values as a service, it’s a topic for a different conversation, but it really opened a door for me.

When we were in Latin America, my wife and I both wrote about our travels for Huffington Post, they had a travel section. So we knew that it was a cost-effective way to get your name and brand out there. So after I started AGD, I focused exclusively on writing industry-specific pieces for as many recognizable publications as I could, Global AgInvesting, both their News feed and their print publication that they give it their conferences, New Ag International, who is one of the larger publication and event organizations in the world on high-tech ag, AgriInvestor – geared more towards PE groups behind a paid firewall, but still a very applicable source, AgFunder who you guys know well, AgTech Nexus. We just tried to get as much information out there about what was going on from our perspective as we could. To date, I think we’ve put out close to 20 different pieces across those platforms, ranging on anything from equity crowdfunding platforms within ag for AgFunder to variable make technology and a contributing author role in an eight-part series for Global Ag News with the investment group out of Canada – Bonnefield.

We’ve got another article that’s going live with a New Ag International later this month on cotton’s reputation as a high consumer of resources, we think making it an ideal candidate for sustainability practices and tech.

We recently started a digital marketing relationship with a group called AgSocial where we’ve addressed a number of SEO issues, we’ve looked at both on and off page link building, focused keyword targeting, and then we began to create our own original, evergreen content for our own News section. We learned that most people were searching for us by our name, so we knew that was something we wanted to capture and maintain, but we also recognized that we needed to do something to capture other parts of that market to begin to grow beyond that. I think that really led us to our two most recent pieces on small-scale farming, amidst COVID, and the veterans in ag piece that we just published.

Tim: Those are all really good insights, and I love the approach of just creating valuable content for ultimately, you’re in clients and getting you in front of more opportunities to continue to grow and scale the business case. Mike as we switch gears here to a section, we call quick takes – What’s your favorite business book and why?

Mike: Oh, let’s see. Tim Ferriss’s Tribe of Mentors is a pretty good. It’s a collection of over 100 different, mini interviews where people to share ideas and habits. There’s a particular lesson there about failure holding chances or having chances in it that if you look for; I think resonated with me a lot. You can control all of the outcomes for people’s response, so set high standards, maintain those and press on.

Tyler: What are you spending too much money on right now?

Mike: Yeah, we are actually in the process of building a house, but we are doing it somewhat unconventional in the sense that my father-in-law and I are doing much of it ourselves- framing electrical, plumbing, interior cabinets, etc. So I’m spending too much money right now on things like wrought iron spiral staircase spindles and pocket doors.

Tim: Yeah. That can definitely add up. I had a landscape architect out last week to give me some pricing on the backyard and it came up pretty high, so I think I’m gonna have to turn into a do-it-yourselfer as well, so I might reach out for some tips and pointers.

Mike: Absolutely.

Tim: What are you not spending enough on?

Mike: date night. Yeah, they are – date night with my wife. They’re piling up at this point, and so I think by the time that everything re-opens, we’re gonna have to go to go to Paris or something. I’m not sure, but not enough at this point on day night.

Tyler: That’s awesome. As we finish this section, what app or tech tool can you not live without?

Mike: Yeah, DeWalt actually makes a Mobile Pro calculator right now that’s been invaluable for me so far in adding and subtracting mixed numbers for length, area conversion, slopes, those kinds of things. I would be two weeks behind with pen and pencil math, or paper and pencil math, if it wasn’t for that calculator app.

Tim: I have not heard that one before, hahah. Mike it’s been an absolute pleasure having you on as we wrap up here, how can listeners get in touch and connect with you?

Mike: Our website is www.desaconsultingllc.com or you can shoot me an email at michael@desaconsultingllc.com.

Tyler: Awesome, this has been a ton of fun, Mike, really appreciate the time. Thanks for being with us.

Mike: My pleasure, guys. Anytime.

—————–

Tyler: So, Time, what did you think?

Tim: It was a really fun episode with Mike. He’s got such an amazing background, I really loved hearing him talk about his military experience and how that translates into his day job with agriculture, and I think really looking at the trends around COVID, whether it’s the emergence of smaller farms and self-sustaining victory farms, and also how ag tech and must find a new niche with these smaller scale operations to go to market.

Tyler: Yeah, I think he’s just super smart guy. I loved his thoughts on that, and I also… I don’t know if you guys caught it, but he talked a lot about marketing and getting the word out, and I think he’s thinking about that really, really well in terms of doing guest posting, to link back to his website and just find these creative solutions to increase the awareness of what they’re doing with AGD Consulting. So hope you guys got a lot out of it. I know, I sure did. Really appreciate you guys listening.

Tim: So if that will wrap things up here and talk next week

• Event Dates: July 29-30th, 2020
• Time: 11am – 4pm Brasilia Time (BRT) (9am to 2pm CDT)
• Price:    
  Early Bird (expires June 30): USD $195
  After Early Bird: USD $295

AGD Consulting is pleased to be a marketing partner for the virtual WorldAgriTech South America Summit, previously scheduled to be held in São Paulo, Brazil.

Join us live online on July 29-30, 2020 for 1-1 meetings, interactive group discussions, start-up pitches and critical intelligence from industry leaders on how our industry will emerge from the current crisis.

Our expert speaking faculty will present live, before hosting virtual roundtables on new technologies and strategies to achieve a more secure, resilient and sustainable agri-food supply chain:

Key Themes include:

• Precision Ag: Accelerating adoption of sensors, satellites, drones and imagery
• Farm Management: New digital platforms driving profitability for farmers
• AI & Automation: Creating integrated solutions for smarter field systems
• Soil Health: Innovation in biological crop protection and plant nutrition
• Animal Health: Optimising animal health and welfare through smart livestock management
• Animal Feed Innovation: Building sustainability and quality through alternative feeds
• Agtech and Fintech: Changing our perspective from yield to profits
• Investment and Incubation: Opportunities for growth in South America’s agtech ecosystem

VIEW THE FULL AGENDA

Over two days of online content and networking, you will have the chance to hear from the leading farm operators, livestock producers, agribusinesses, equipment manufacturers, start-ups and investors in South America – and to meet with them individually in online video 1-1 calls.

With a regional focus while attracting an international delegation, this is a platform where valuable business connections will be made to accelerate the transition of technology from the laboratory to the field.

• Website: www.worldagritechsaopaulo.com
• Social media https://www.linkedin.com/showcase/world-agri-tech/ and https://twitter.com/WorldAgriTech

PLUS: Discover South America’s Most Exciting AgTech Start-ups in our: Technology Showcase

An Opportunity for Tech to Reshape the Supply Chain

A silver lining for agriculture amidst the COVID chaos may be closer than you think – in your own backyard.

With traditional ag supply chains disrupted and consumer concerns about empty grocery store shelves on the rise, we wanted to examine this potential opportunity for tech and localized production to reshape the supply chain.

Over the last several weeks, we interviewed six experts from across the value chain, crop, and livestock sectors to gather insight into the impacts of COVID-19 on subsistence, hobby, and small holder farmers across North America. What we found was both anecdotal and concrete evidence of an increasing number of consumers beginning to grow/raise their own food and for those who cannot, an increased interest in producers with shorter supply chains and locally-grown products.

According to Judith Redmond, founding partner for a 450-acre organic farm, Full Belly Farm, in California’s Capay Valley, “Interest in locally-grown, fresh produce has skyrocketed during the crisis.” In a May 10th article by Eric Westervelt from NPR, Redmond commented that “We’ve doubled our Community Supported Agriculture (CSA) box numbers and quadrupled our add-ons like wheat flour, oils like olive, nuts, fruit juices, even yarn.” In the CSA model, members buy a share of a farm’s harvest that gets delivered to them on a regular basis. Sarah Voiland, operator of an organic CSA, Red Fire Farm, in Massachusetts noted that people “don’t want that many hands on their food right now” as supply chains for CSA models generally only include harvest and boxing/packaging before the consumer picks up on site. “In all the time we’ve worked with CSAs, which is several decades, we’ve never seen a surge as quickly as we have of the last few weeks,” said Evan Wiig with Community Alliance with Family Farmers.

This rise in interest in locally-grown food with shorter supply chains has propagated into the sector with the shortest supply chain and closest proximity – our own backyards. 

It’s important to note that what follows is not an effort to paint a comprehensive picture as we are clearly in the early stages of conflict with COVID and the “fog of war” has settled in thick and heavy.

Consumer Growers

We started by asking several experts if they’d seen an increase in the number of consumers beginning to grow/raise their own food and trying to be less resilient on a shuttering supply chain?

---

---

---

A More Resilient Supply Chain

As Allison alluded to, this move towards resilient and shorter supply chain as well as a rise, at least anecdotally, in backyard gardens could present an opportunity for broader agtech and regenerative farming adoption. We asked the experts their thoughts:

---

---

Ingram – Texas Farm Credit

The right person will latch on to the idea of learning what technology has to offer as well as the intricacies of raising a crop. One underlying goal for any small farmer would be freedom. They need a system in place that allows them to work on their crops or livestock when they are able to, but also gives them the freedom to leave on vacation, [for example] and now worry if there is death or damage. This system is certainly more possible today than ever.

---

Ingram himself is currently researching available livestock tech to outfit on cattle to provide him both freedom of maneuver while maintaining insight into his animal’s health.

As a subsistence farmer myself in northeast Texas with a variety of vegetable and brassica crops, livestock, and greenhouse produce, I agree with the sentiment that an attractive component of agtech adoption is the freedom to continue a more subsistence-based way of life without it consuming all of our time and resources.

Morin – Kipling Ridge Farm

There is a huge learning curve so there will be a ready market for things to make that easier from the agtech perspective. For the regenerative side, as people begin to have a closer connection to their food again (doesn’t get any closer than growing it yourself), they will want to be sure they are growing in the healthiest way possible. Wide open door for regenerative to take a foot hold.

---

Smallholder Farms as a Market for AgTech

We believe that despite the opportunities for adoption, smallholder farmers have historically not been the target customer market for agtech companies as this market is too disaggregated, lacking in scale, and generally not commercially-oriented. We asked our experts about the possibility of aggregating this class of growers in a meaningful way to increase adoption.

Ingram – Texas Farm Credit

There are three main factors here. First are the two mentioned above. This is a hobby, and technology could bring an appealing facet to that hobby. Next, technology could help the grower have the freedom they need to raise a healthy crop and still go on vacation. Last, one concept I can see working to slightly commercialize subsistence farming is similar to a CSA in neighborhoods.

Certainly not everyone in the neighborhood would enjoy the hobby of growing a garden, but those that did could raise and sell to their neighbors. The CSA model will never be a huge revenue generator, but it could potentially pay for a hobby farm. If you could create a system around this that met the above goals and was structured in such a way that it had a relatively low barrier to entry, I could see much wider adaptation of this in the next few years.

---

Caldwell – Lessing Flynn

I think the smallholder farmer right now doesn’t have the revenue potential or scalability to justify spending on ag tech. The necessity of financial viability makes it difficult to target the development and marketing of products to such a market.

It’s a call for some kind of efforts to create cooperatives or business entities that provide smallholder farmers more purchasing power when it comes to technology that can bolster production and output. I think something like a smallholder farmer cooperative encompassing enough members to create some purchasing power can directly connect with ag tech companies to create a value chain that can be financially beneficial to both parties. It’s a strategy that’s historically enabled farmers to access things like crop inputs at costs that wouldn’t be possible if they were doing it alone.

And I think it can work for ag technology today; there’s a mutual hunger in agriculture right now — farmers want technology to be more productive, and tech companies want customers. The money required to make that connection remains the main hindrance.

---

Morin – Kipling Ridge Farms

I understand the sentiment – but I think tech in general is becoming more accessible, so I don’t see it as a barrier. That being said, we don’t employ much of it ourselves and we certainly aren’t a subsistence farm – we just haven’t seen the need for it as of yet.

---

Nepveux – U.S. Grains Council

I do think there is a distinction between digital ag technologies and ag breeding technologies. Things like biotech are often adopted by smallholder farmers (when governments are open to these innovations) because they are size and scale neutral. [This] hasn’t always been the case for digital ag tech, like robotics, machineries, tracing technologies, etc. The front-end investment has been too high.

---

Bowen – The Yield Lab Institute

That’s part of the reason.  The bigger reason (and this is the same driver, probably, of the fact that VCs tend to invent further downstream) is that money follows opportunities to make more money.

I also think that measurability is a big factor here – digital tech is useful and valuable largely as an aggregator of data, and biological/mechanical tech is difficult to get to market without having the pre and post implementation measurements provided by digital tech (chicken & egg problem.) It’s difficult enough to measure impact of various technologies on large scale farms where everyone speaks one language and has access to WiFi.

I think that the oft-cited “fact” that subsistence farmers aren’t commercially oriented reflects societal bias against poverty more than it reflects reality. Mindsets can shift when space is given for said mindsets to shift. There are ways to aggregate smallholder farmers, but none of them are easy.

---

---

The Impact of COVID

Many believe COVID-19 will have both positive and negative impacts on the smaller farmer in the coming months.

Ingram – Texas Farm Credit

In the coming months, actually, I would assume people will start moving back towards their old life. There has never been a better time than now to market agtech at a subsistence level than right now. Until the next crisis, subsistence farming will decrease in popularity over the coming year assuming we work our way out of these supply chain issues.

---

Caldwell – Lessing Flynn

I think the COVID-19 pandemic will cause increased interest in consumers raising their own food where they can if concerns remain about our country’s food supply chain. We’re a nation that’s become accustomed to having easy access to an incredible diversity and quantity of food, and meeting those diverse, specific needs may increasingly become a matter of consumers producing exactly what they want and need. On a broad scale, adopting that sort of trend will require changes in how food is raised, distributed, processed and sold in this country. And that will be no small effort. I suspect the pandemic will cause continued panic-buying as a knee-jerk reaction to occasional disruptions in food availability. Empty grocery store shelves will continue to fuel angst, and smallholder farmers and local food systems could see increased opportunity in connecting directly to consumers if that angst continues.

---

---

---

Conclusion

This trend is still in its infancy and will continue to evolve as consumer preferences adapt to the downstream impacts of COVID on their store shelves. The longevity of interest in hobby farming today remains to be seem as traditional supply chains settle in to a new COVID “normal”. What is clear today is that opportunities are present to adopt both technology solutions and sustainable farming practices for the right grower with a bias for change and innovation.

If you found this article interesting, please consider sharing with your audience or subscribing to our newsletter to be informed of future blog posts.

We’re pleased to announce that our Founder/Managing Director, Michael DeSa, will be participating as a panelist at the New Ag International conference September 15th-16th 2020 at the Hilton San Diego Mission Valley, San Diego, California.

The conference will offer dual tracks: biological and precision ag while keeping an eye on the bigger picture of sustainable agriculture. Rarely do you get such a diverse group of ag experts together to discuss everything from integrated pest management to agricultural investing within precision ag and agtech.

At a time when collective minds are needed to solve some of the most pressing issues within the ag supply chain, New Ag International aims to bring together some of the brightest and most innovative minds to begin to tackle these unprecedented challenges.

Michael will be a panelist on Day 2, Wednesday September 16th at 15:10 titled: Strengthening Communication and Sense of Community between Farmers and Growers. He will be joined by Brad Fruth – Director of Innovation for Becks Hybrid, Jeff Caldwell – Content Marketing Manager for Agriculture for Lessing-Flynn, and Mariana Vasconcelos – Founder of Agrosmart, Brazil.

The discussion will center around addressing farmer concerns in adopting new technologies and minimizing the gap between technology providers and producers.

We hope you can join us!

Visit the conference website for more information or download the agenda by clicking the link below.