International Consulting OpportunitiesInterest in the Agriculture Space
Gary Thien AFM, ARAThien Farm Management, Inc.101 East Graham Ave.Council Bluffs, Iowa 51503
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Thesis of Investment Community• Amount of Arable Land per person continues to
decline each year• Population growth continues to increase food
demand• Urbanization and family income levels
– Creates more protein demand– More protein demand means increased feed
usage for livestock
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The Investors• Sovereign Wealth• Hedge Fund Companies• Public and Private Pension Funds• Family Offices
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Investment Strategies• Spreading Risks
– Weather– Political– Currency
• Types of Markets- Developed Countries
• United States• Canada• Australia
– Developing Countries• Brazil• Argentina• Eastern Europe
– Frontier Countries• FSU (Former Soviet
Union)• Africa
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Land or Operation• Land Play -- Own and Lease to Others
– Expect Lower Returns without Operational Risk• Operational Play -- Own and Operate
– Expect Higher Returns with more Risk• Mix of Land and Operational • Agriculture Infrastructure
– Processing– Rail– Storage
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Decision Making on Agricultural Assets• How much to invest - % of total portfolio in ag.• How much risk to take - • How to spread or mitigate the risk• Investment horizon• Exit Strategies
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Investment Offices• Large Staffs of investment analysts• Responsible for other people’s money• Global Knowledge• Extensive Financial Models
Issues • Investment Committee turn-around time
– Exclusivity may be granted – When working with farm sellers-time is of the
essence
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Scope of Investments• Generally substantial investments in terms of
money– $10 to $100 mm into a land fund or single asset– 5,000 to 200,000 hectares
• Sole Investor• Partner Investor – Stack in the Existing
Operation• Targeting Specific Enterprises
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Challenges in Global Investment• Land is a limited Resource• Management is an extremely limited Resource• Expats• Logistics• Political and Currency Risks• Commodity Markets• Multiple and integrated enterprises
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Investor Needs • Appraisal
– US and Globally• Management
– US and Globally• Direct Management• Employee Searches• Financial Accounting
• Consulting– US and Globally
• Reviewing “pitch” material
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Investor Needs-Agriculture Specific • Understanding
– Soils– Weather– Crops to be grown– Yields– Fertility and Chemical
needs– Direct and Indirect
Costs– Machinery inventory
and capabilities
– Storage– Employees and
capabilities– Systems and controls– Capital Improvement
needs– Organic and outside
growth– Budgeting
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Hazards of International Work• Language Barrier• Working in foreign currencies & weights/meas. • Logistics• Time• Visas
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…. Utilize a minimum and no till crop production system
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…Modern and efficient grain storage and conditioning
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…Modern Seeding Equipment
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Questions?• What is the current attitude for agricultural
investment?
