The 16th annual Land Investment Expo hosted by People’s Company in Des Moines, Iowa boasted record attendance and a full agenda of nationally recognized speakers.
Peter Zeihan
Geopolitical strategist Peter Zeihan was the first to take the stage for a keynote called “Getting Through the End of the World.”
He opened with an explanation of global population demographics, noting China has the fastest aging workforce in human history. “We’re at the end of the Chinese system,” the strategist told attendees. He added, the real question is when and how the country will go down. Zeihan believes part of China’s problem is the country’s leader, Xi, operates in an information vacuum. President Xi has literally shot the messenger so many times no one in his circle wants to tell him anything or disagree, the strategist says.
Although it may prominent in the headlines anymore, African swine fever is a “smoldering crisis” in China, Zeihan explains. Without a solid domestic pork supply, that leaves rice, a phosphate hungry crop, as the only culturally significant crop China can grow. The country has stopped exporting phosphate.
Globally, livestock production (and manure) has been divorced from the plant crops, so we need industrial inputs to sustain agriculture as we know it, Zeihan says. Farmers should know China is disrupting the phosphate market, the Russia/Ukraine war is creating even more fertilizer issues, and the Middle East is not stable even though we’re paying attention to other things, he notes.
Zeihan also predicted more trouble for Germany. He estimates the manufacturing base in the country will end in two years. “If you want a BMW, get it now – and 10 years of parts,” he says.
These, and many other factors combined, mean a famine claiming 1 billion lives is near, the strategist forecasts. “Farmers will try to feed the world and fail.” However, Zeihan says now is the time for farmers to expand their operations. He’s especially bullish on soy and wheat crops.
Why wheat? It needs industrial agriculture inputs to be grown on the marginal land it’s currently raised on. If that industry blows up, wheat must be shifted to better land and prices will increase, he says. Zeihan is bullish on soy because the crop can fairly easily replace corn in the places it is grown and is a good source of protein for a hungry world.
Vivek Ramaswamy
Co-founder and executive chairman of Strive Asset Management Vivek Ramaswamy was next to take the stage. He’s the child of Indian immigrants and rose to CEO of a medical company that makes cancer treatment earlier in his career. Now, he works to fight a different “cancer,” the new secular religion of ESGs, he says. Much of his keynote centered on the economic and cultural threats of communist China, and growing corporate and government power. Not all solutions have to come from politics, he says. Here are his four ideas that “go beyond partisanship.”
- Prepare to defeat the Chinese communist party. “We cannot defeat an enemy we rely on.” Ramaswamy called for semi-conductor self sufficiency.
- Destroy the managerial class in this country. He suggests replacing civil service protections with sunset clauses. The same concept applies to corporations, too, he says.
- Restore free speech. This is Ramaswamy’s biggest passion. We need to close the gap between what people will say in public vs. in private, he says. “If you tell people they can’t speak, they scream. If you tell people they can’t scream they tear things down.” Free speech is necessary for peace in this country, he says.
- Embrace merit again. Referencing Martin Luther King’s famous speech, Ramaswamy says people should get ahead on the content of their character and contributions. Get rid of race and gender based quota systems in the federal government, he urges.
Wrapping up his time at the mic, Ramaswamy stressed, Americans have celebrated our differences so much that we’ve forgotten the bigger things that bind us together.
Jim Knuth
Jim Knuth of Farm Credit Services of America led a breakout session titled “Agriculture Looking Forward” with standing room only. Farm Credit believes 2022 was the third peak of modern grain production history. “Farmers have to have a payment they can afford every year, not just at the peak of cycles,” he says.
In addition to land values, interest rates, and grain production agriculture, Knuth shared these six bits of food for thought in 2023.
- It’s time for both hands on the wheel. Margins for error are narrower.
- A decline in commodity prices is not likely to mean a decrease in costs.
- Entering longer term cash rent agreements at the peak of commodity cycles can be expensive. You don’t want to be farming just for practice, he says.
- Restructuring debt for stressed farms will be much more difficult this time around. The math won’t work the same way as it did coming out of the ethanol boom.
- Be patient and maintain your liquidity.
- Ask yourself… What is my cost structure? Breakeven? Fixed cost? Land costs? Machinery costs? Are these sustainable if margins normalize (shrink)? What adjustments could or should you make?
Mike Dunleavy
Recently re-elected Alaska governor Mike Dunleavy joined the event via Zoom after lunch. He encouraged attendees to consider investing farmland there. Here are some of reasons Dunleavy believes The Last Frontier is an attractive agriculture investment.
- Lower or no taxes (income and sales) in Alaska.
- A lot of land in the state has never seen pesticide or herbicide . It lends itself to specialty marketing if those are the sort of crops you want to grow.
- Alaska has few limits on who owns farmland.
- The state offers “copious” amounts of freshwater, open access to the Pacific ocean for export markets, a climate that will grow crops, and a variety of livestock options with plenty of room.
- Our land is cheap and we have lots of it, the governor says citing a recent sale for $500/acre.
Jimmy John Liautaud
Jimmy John Liautaud engaged the audience after lunch with the energetic retelling of his story, starting with his high school graduation in 1982. Raised in an Army family, Liautaud knew that wasn’t the path he wanted to take. With the agreement that if it failed, he’d enlist, his dad gave him a $25,000 loan to open his dream hot dog stand. The dream quickly pivoted to a sandwich shop where the young Liautaud worked 20 hour days and learned to watch his pennies. As the business grew, he remained very hands on, raking in $200 million profit in 2019.
Today, Liautaud has farmland in Illinois, Kansas, and Wisconsin where seed corn, corn, and soybeans are grown. He also owns two wineries. Farming and the sandwich business have a few similarities, Liautaud noted saying there’s not just one silver bullet that works for either business.
When it’s go time, it’s go time. “If you don’t go, you don’t get,” Liautaud says.
“Tenacity will beat brains seven days a week,” he says. Every Wednesday, Liautaud would cut and taste each product on the menu. “You can only expect what you’re willing to inspect.”
Sarah Frey
Another entrepreneur, Sarah Frey was welcomed to the stage next. She’s an author as well as CEO and founding farmer of Frey Farms, a multi-state produce wholesaler. Her success story started on a failing southern Illinois farm. After spending her first 18 years planning everything in her life to get as far away from the home farm as possible, young Frey had a sudden change of heart. A golden sunset as she sold the family’s last horse prompted her to reflect on her emotional connection to the land and the memories it held. In that moment, Frey resolved to save the distressed farm.
Closing her keynote, Frey urged Land Expo participants to remember there are people involved in every land transaction. “That brings emotions. Don’t forget the human aspect.” Frey credits her sensitivity to the emotions that come with land deals for some of the opportunities that have come her way.
Frank Luntz
Public opinion researcher and pollster Frank Luntz followed Frey, calling her an amazing mother. He challenged parents in the audience with six questions he says statistics show make a difference in the success of children as they become adults.
- How often do you sit down and have dinner with them?
- How often do you take them to a faith/religious meeting?
- How often do you check their homework?
- How often do you take them on trips of one week or more? (And put down your devices.)
- Do they tell the truth about where they are on Friday and Saturday nights? Do you demand that of them?
- How often do they participate in team sports?
The higher you score with these questions, the better off your kids will be, Lutz says.
