Midwest Agriculture Conference: Fireside Chat

DAVID OPPEDAHL: All right, everybody. Hope you had a good lunch. We're ready to go with our keynote speaker here today. So, as you heard, I'm David Oppedahl with the Chicago Fed. And with me is Matt Carstens from Landus Cooperative. So Matt's going to have a fireside chat, even though our fireplace is looking a little dim here. But looking forward to talking about Landus and some of the changes in the environment for inputs. And so Landus is a regional player in Iowa that's expanded. And so I'm going to ask a little bit about that.

But Matt leads Landus work to advocate for farmer members and customers, empower employees, and lean into the future of the AG industry. His passion for and experience in agriculture spans every step in the supply chain, from agronomy, retail to end user grain customers, food manufacturers, grocery stores and consumers. So that's the whole value chain it sounds like. What business units do you oversee? And what geography does Landus cover?

MATT CARSTENS: Yeah, so thank you, everybody. Glad to be here. And Landus covers 34 states and 16 countries that we operate in. A lot of that is in our animal nutrition side and our grain business. That's always expanding and finding new markets. But we're in a predominantly grain agronomy. We've got animal nutrition, which is a soy processing facility. We built that for the soybean meal.

Today, it's now for the oil side. It's amazing how that turns around in a 10-year window. And then, we also have energy. So those are the main businesses that we spend a lot of time as we're talking about at lunch on innovation and demonstrating innovation for our farmers and leading them into that future of what's going on with drones or anything in the animal side, whatever the case may be.
 
DAVID OPPEDAHL: How do you demonstrate that for them?
 
MATT CARSTENS: Well, some have actually been there. A couple of times, we got loyal following here from the Des Moines area. I don't think I've been in there twice. So that's impressive for him. So what we do is it's about half of our office space is set up in a U-shape. And they kind of make the journey around that U-shape where we've got probably 30 to 40 different partners or collaborators that we put in there. And they're anywhere in the life cycle. If it's early in the life cycle, it needs to be something that we really think could be a huge change and help for our farmers to the stuff nearing market readiness that we're a little less judgmental on and let the farmer decide.

So what they get for being in there is an access to the farmer to demonstrate and get feedback from that development or innovation they've got. For farmers, they get to take a look at things like drones. And I think this is the first group I've shared this with, Dave. So I saved it for you and your group. We signed an agreement with Brave Harvest that we'll be doing over a million acres of spraying by drones this year. And we have that contract with them across the globe. Most will be in the United States, probably about a third of it in the Midwest, a third of it on the coastal areas, and then another third all over different parts of the rest of the globe.

But that showcasing the farmer, that may make them think different about buying their next sprayer, maybe delay that to see how this works in '25, or whatever that case may be. So we're trying to be ahead of the curve to show them and get them ready before we just dump it on them. Go, hey, guess what? This technology is here. And they're going, I don't know what this is. I got to wait a year. I got to see the neighbor prove it. They've now seen it 1, 2, or 3 years ahead of time walking through there.
 
So there's something for the inventor, something for our farmers. And I think we give anywhere from-- Steph knows better, but probably 7 to 10 tours a week in that thing, which is non-farmers. So we have people show up at our door from Morocco. They were OCP, the phosphate producer. Said, hey, we heard you. And we're like, well, you understand we buy phosphate from you. You didn't have to just show up as a stranger. But that's kind of the reputation that facility has received. And we're proud that. That's what I believe a new age co-op should be doing, not the things that our great grandparents put in play, but the things of how we lead the farmer into the future and do the things that we started the co-op like Grain and Agronomy as well as we can.
 
DAVID OPPEDAHL: And I think you had mentioned earlier to me that you were also getting into the broadcasting area?
 
MATT CARSTENS: Yeah, yeah. So in Iowa, it's a real great state. We wear a tie at funerals and weddings. That's it. So we've got a low bar to cross here. But there's a show, a noon show. I think it runs from 11:00 1:00 every day that's called The Big Show. And the individual that does that is named Bob Quinn. And he's a huge rural ag person, a great voice for agriculture, quite honestly. And we've struggled in this world of farmers and all this new means of communication. Do we talk to them through text, email, social media? And the answer is, it's kind of have to do all of it because some farmers are here. Some farmers are there. Some farmers are on this side of it.

But there's one thing that they all do in Iowa is thisBig Show. So Bob Quinn had been a big fan of Landus and our innovation and things that you got to see when you were out last, David. And so he came to us and said, would you want to look at doing something more prolific with this? And we said, well, we do have this issue communication and how we talk to our farmers and how we get information and back and forth. So we are now every day, The Big Show is broadcast from the innovation connector and Landus's headquarters there in Des Moines. And it's been really neat.

Now, we've got a space that the team is putting in where when they do that tour, which actually ends at our land works group. We talk about that later. But about halfway through is his broadcast area. So they get to see what a studio looks like, which is not much. But they think it's neat. So who am I to judge? And that tells the story a little bit of what broadcast has been. But here's a program that's on AM. I have a really modern GMC. And I can't get the FM because you got to do a decimal. And mine won't do it. So you got to listen to this thing on AM, right? And we almost got rid of AM bands.

But in Iowa, this is the deal. And it's been amazing how we've been able to communicate with our farmers in a way that they now are excited about and listen to hear what we're doing this week. And I think we talked yesterday about coming here to see you. And a lot of questions came in on what's the interest rate going to do? I said, it's not that kind of meeting. But there you go.
 
DAVID OPPEDAHL: Well, that's great to hear. And I was wondering a little bit, farmers have had some tough years in the last five or so. And then, they had some good years. And now, it's getting a little tougher again. What are you telling farmers in recent years when they face dramatic increases in input costs? And how can technology help with their inputs?
 
MATT CARSTENS: Well, for them, the farmer piece is really simple. They've got to drive costs out of it or make more money. I mean, and really the answer is they need to do both every year. How do we use technology to make them more efficient? And particularly in the farming, a little bit different than your question, David, it's getting really hard to find somebody to work in rural. If you've got a rural community, you've got the county, the major towns, the cities that are employing these folks. Those are the best jobs. They show up for coffee about 8:00. They back at coffee at 10:00, lunch at noon.

I mean, ours is we'll tell you when the train shows up. It could be any moment. And you're up there loading it for 24 hours. Right? They go, that's not the deal. And then the farmers piece, you've got these peaks and valleys of spring and fall, hard work, physical work. And we have to bring more and more technology. We talked about this also at lunch. The agriculture has been slow to adopt technology. You look at what military and space can do.

And some of those things, most of those things are very transferable, which you'll see most of them in our innovation connector, to AG.

But we seem to resist it because somebody's got to get a pocket book out. And then the AG channel, you go from a manufacturer to a distributor to a retailer to a farmer. Like in 2024, if that makes any sense, let me know. And everybody's got their hand out, taking money out of that supply chain to where innovation is stalled. And also, profit continues to be a struggle all the way to pricing to the farmer.

So to your question, we spend a ton of time on how we drive cost out and how we improve yield. We're also spending a lot of time right now on how we find new markets for their grains. You look at something like what was announced here last month with Brazil and putting a port with China in Peru. And now, that is a clean path for corn and soybeans to China, which our exports to China clearly show that.

And absent a major drought, because remember, Brazil's got two bites at the apple of grain production. Absent a major drought, that's way, way gone for us. And we see it. We see it in today's prices. We see it in the future or lack of future optimism on commodity pricing. So we have to think about things different. We have an office now in Guadalajara. We've got two employees living in Mexico reporting to an international leader that we just hired. And this is all-- these all just happened in the last three months since you've been out to see us.

So the change is here. And the change has got to be tariffs, whatever. We can't-- I don't think there's anybody in this room that can influence. If you can, I'd like to visit with you afterwards. But assuming there's nobody here that can influence that, how do we deal with it? How do we solve the equation? And AG has truly rested on our laurels for many, many years. We've got to be leaders in this room and leave here and go, how are we going to deal with these things? How do we create a different day for AG, for the farmers, for these rural communities?

And unfortunately, there's not an easy answer to any of that, David. I didn't save any surprise for you on that one.

But I do think it's meetings like this where we get honest with the challenges, and the changes that are upon us, and what we can do to drive cost out, and continue to improve overall production, and dealing with pricing as best we can, and that middle ground there.
 
DAVID OPPEDAHL: How much does data get involved in this whole process you're talking about?
 
MATT CARSTENS: Data is obviously more and more important. I would say AG is still way behind on the curve on data. But we're starting a system you got to see called Synthesis that is a partner out of Kansas City that works with Space Force and several other companies from the government side. Took that same technology and created this-- this Synthesis is like a vortex of data. And a farmer can use past and current conditions to forecast the future. And it's accuracy is off the chart. I mean, we're using satellite imagery that we actually got hooked up with NASA through Secretary Vilsack.

And using satellite imagery weather patterns, we actually now have a climatologist on our staff. Eric Snodgrass works for us, and taking the forecasts of everything, every bit of data that we can shove into this thing to run algorithms, AI, GPT, or LLM type of analysis that puts the power back in the farmers' hands. Now, if you come to the facility like you have, Synthesis has got, like, a quarter of it.

I mean, this is a massive display of what can simply be a screen in a farmer's office or home. But how it helps them take a hurricane that's coming up and what that will mean to infestation of pests to their crop three to four weeks later. And what they need to do ahead of that turn, how we can look at that and get product staged for that run of products that are needed to protect the crop. What that can mean to livestock and influenza and all the things that we're dealing with there. Data will be the driver.

And honestly, I think as we look at AI and GPT and Quantum, the need for sales reps and that is going to be dramatically different. Where today a farmer can log in with Tesseract down in Kansas City working on our own GPT system, and it just builds every day. Every bit of data, it just keeps building itself. It's not public yet because it's going through that building stage. But from where that thing is started to where it's at, and I say where "it," I don't even know what it is. It's just this thing that is in the cloud building. And the things that it can answer for you is scary, and not only accurate, but smart.

Like, it takes all these variables and go, here's what life will be like this year. Here's what the answer to that equation is for the farmer. We had one of our farmers. This is a funny story. The line doesn't spread very well. And they pile it. And he was trying to figure out what big of space he needed, plugged it into this GPT. And it said yeah, you need this by this. It's going to be this high. And it's going to-- like, I went to Iowa State. So I'm not that smart. Obviously, we're not talking about Harvard stuff here. Like, no chance I could do that. Right? No chance he could. Put the data in, this many acres. This many-- what's the space he needs? Based on the-- answers it in seconds. Like, there it is. That's where we're going. And you all go, well, yeah, that's just our life.

But you have to remember, these folks are in the middle of nowhere. I mean, their night out is to a greasy spoon. And I mean, you're eating the grease from the vat that made it, right? And that's the world they live in. We did this test. We had our farmers in last August. No, no, February, February of this year. And I said, who in here-- is our board. So it's our board. So these are some of the best farmers across the Midwest. And I said, who in here knows what ChatGPT is? There's 12 of them in the room. How many do you think raised their hand? 12 potential. How many raised their hand?
 
One. And I'm not sure he just didn't hear about it and no idea. So I showed him. I actually developed Steph's job description right in front of him. I said, I just got this email this morning. HR needs a darn job description. I said, AG chief of staff. And it chuckers it out in 30 seconds, all the way through. I mean, you all have used it. But the farmers are watching this going, what world are we living in? And now, we're building one for them around livestock, around grain storage, around grain production, around efficiencies, around storing wine. I mean, it's just crazy what we can do here.

But we sometimes are-- not sometimes, maybe all the time, are our worst enemy. Because somebody's got to lead the farmer. And somebody's got to sacrifice some profit to get to this and demonstrate and show them where we can go. And that's, in my opinion, been the big obstacle. Did I answer your question at all? Did I talk about something that had nothing to do with your question?
 
DAVID OPPEDAHL: You answered a bunch of them.
 
MATT CARSTENS: We're about done. Is that what this is? You're about done with me?
 
DAVID OPPEDAHL: No, no, not quite. I was just wondering in terms of the cost of all this, I mean, obviously you have to pay to do this, and getting reimbursed, and what kind of margins there might be for the farmer, and incentives for them to adopt this.
 
MATT CARSTENS: Yeah, I mean, what's really interesting is the farmer of tomorrow-- and as a co-op, we've got farmers of yesterday, some farmers of today. And we've got-- and it's probably about a third, a third, a third. And then, the farmer of tomorrow. The farmer of tomorrow just-- and generically, I should back up. If you want to find your sweet spot to the farmer, there's two factors, profit and ease of business.

And I use ease of business. You all know farmers have auto steer, right? Which does nothing to help them profitability-wise but makes their life easier. Almost every farmer's got auto steer. I mean, there's no question they were going to install that, pay for it, pay the subscription all day long. And so those are the variables you've got to please the farmer with. And some on that curve are give me stuff that I can relate to back in yesterday.
Some are on today's level.

But there's a chunk that look at this GPT and go, I got to have it. I got to do something with this. I want to be better at what I do. I want to go to Mexico and find my own users of grain. So we partner with these companies in a way that we have the exclusive. So if you want to use Synthesis, it has to be through Landus in the world. You want to do Brave Harvest? Has to go through Landus in the world. And the list goes on.

So that's how we protect ourselves that we don't end up with a bunch of people in here eroding it or not authentic to the cause of what we're trying to do. And those companies then really work with their shareholders to develop it. They get somewhere around 50%, could be 60%, could be 40% of the profits that we make. We move that through the supply chain to them. But they do all the development. They own it. We're on the other side as that means to the end to bring it to the marketplace, including first peek at things and the innovation connector.
 
So I think we've developed a model that-- because as a co-op, we're eating Ramen noodles. It's like we're in college all the time. It is a co-op. There are no great profit here. But we've got to find unique ways to bring those smart minds and companies to our farmers and using their investors, giving them commitments that they can use with investors, to grow investors, and make that happen.

So LandWorks is a company that actually was born out of DefenseWerx. So DefenseWerx started when a Navy SEAL commander lost one of his war fighters. And the commander said, I will never lose, under my watch, another human life and said, I want to develop the Iron Man suit. And I know there's a lot-- I mean, that looks great in Marvel. But there's a big difference when you're in the field of battle. And they came back and said, if you us about six years and about $500 million, we can get this baby done. They said, I'll tell you what. You got six months. You got $50 million. Go do it.

And they came back and said, you got to cut through all the government red tape. You got to give us free reign. You got to give us access to-- Disney was involved in the development of this. They did it on time. They did it below budget. And out of that was formed DefenseWerx. So defense DefenseWerx is a 501(c)(3). 11 innovation hubs that are all government, so Navy, Army, CIA on down the line.

And then, there's this 12th one which is LandWorks. And LandWorks is the only non-government that we have access to all 150,000 inventors around the globe. So we wanted to develop Synthesis. We send that out in what we call Tech Thursdays. And all these responses came back. We took the top five, then narrowed it down to the one, which ended up being Tesseract in Kansas City that helped us develop it.

So we're using the power of the system in many different ways. I was teasing. I got a call when I was in our office here in Chicago from one of the regional-- I shouldn't have told him his name, but one of the regional co-ops.

Going, are you come to our annual meeting? No, I'm not coming to your annual meeting. Just tell me how you did. I sent my vote in. We're good, right?

What I need to do is go to meetings with smart people and figure out how to bring that back to our farmers and do it in a way that is cost effective and increase productivity for them. And that's when we were meeting with DefenseWerx for the first time. Another one of the regional co-ops was having their big meeting of the winter. And they go to somewhere warm. DefenseWerx is in Tampa. So I wasn't sacrificing a lot. But we're there meeting with them while everyone else is out boondoggling talking about how one company did last year.

And that's AG. And I say that in all transparency. I'm a part of the problem. But I also need to be a part of the solution that we've got to think different. We've got to use the hard work that's been done in other industries, like space, like military, like government, that we can bring in and solve problems. When Vilsack toured our facility and goes, I'm going to connect you with NASA. I go, [STAMMERING] he won't-- just-- that was nice. Thank you.

Right? He did. He absolutely did. Government helped us get to the point where, today, we can scout fields from satellite on three mil-- no, it's 10 feet above the Earth's surface. I mean, it is a really crisp image.

Now, once they release it from the military-- and that's leverage that we have right now and are talking to the Department of Defense, we can get within inches of the soil. But that's saved for the military. They were like, trust me, we're not going to do anything wrong with this. We're just trying to identify a weed and a pest. Right? But this is where great people getting together can solve it in a way that helps farming, helps agriculture, solve these challenges of the future.
 
DAVID OPPEDAHL: You mentioned Chicago briefly. So what's your link to Chicago?
 
MATT CARSTENS: Well, we just started a new company that has a different path to the farmer. Think more Amazon or DoorDash. So this company is called Conduit. We just started it six months ago. We launched it on Bloomberg here in Chicago. And today, it's got over $400 million of financing commitments from farmers. We're just starting our transaction to sell product to these farmers across the United States. And it's literally-- it's the Amazon. Like, you can, unlike Amazon, you actually call 618-CONDUIT and talk to a human. But that's it.

We're going to use satellite to scout your field. If there's a problem, they can send us imagery. It is a new age way of thinking about AG retail and working with that farmer from agronomy and a grain perspective. So that office is based here in Chicago. We based it here. Although I love Iowa, and I know Steph and others do, but we had to get where there was a population. And in the summer, nicest day in Des Moines, you'll probably see 10, 12 people downtown Des Moines. We came here. And there was, I don't know, 600, 700 walking by our place in the West Loop and out having dinner on a patio.

And it's not a place you would see a business like ours. And our building, there's John Deere. There's Snapchat. Across the parking lot's Google. McDonald's is over there the way. Mondelez is in the neighborhood. But we have to be where people are. And again, people that want to solve world problems, it's not a guy like me. All I know is I grew up in Bagley, Iowa. That's population 150. If we're lucky, a big day was going to Des Moines 60 miles away. Today, we got to be in the third largest city to attract the right talent and solve some of these problems with different minds that are out there.

DAVID OPPEDAHL: Well, this has been a great conversation. How about if we open it up to some of the questions from the others here?
 
MATT CARSTENS: Well, I saw the last presentation. And he's really smart. So hopefully, Victor doesn't ask any questions. Because I got nothing for him. OK? I defer those to Steph or something.
 
DAVID OPPEDAHL: All right.
 
MATT CARSTENS: Absolutely.
 
DAVID OPPEDAHL: Yeah. So any questions out there? I can bring a mic to you.

[LAUGHTER]
 
MATT CARSTENS: Well, we'll see how you do living up to it. How's that? Yeah, right back there.
 
DAVID OPPEDAHL: OK.
 
AUDIENCE: So I work for a university where sometimes we can be maybe unrealistic. But there's been a lot of conversations that I've overheard about there's going to be this new model for the way people sell to farmers, potentially with inputs where it would be a subscription service, like a clean acre sort of thing. Is that a real thing we should be thinking about? Or as the real person sitting here who's running one of those businesses, you should say, hey, we should maybe have that conversation a little deeper?
 
MATT CARSTENS: Yeah, it's funny you mentioned that. On the landing side, we just launched a program two weeks ago, I think it was, that you pay us a set number. We guarantee clean weeds. We have a yield guarantee that is insured for our farmers. I don't know how we did all of it. Again, we got smarter people than me. But it's a total package where that farmer never has to look at that field, touch it. The yield's protected with this insurance policy. It's absolutely amazing. And our farmers feel-- they're kind of like, yeah, we said we wanted it. We never thought this would happen. So we've caught them a little bit flat-footed.

So, yes, I want to say to your first part of your question, the AG distribution channel to the farmer, as I've already highlighted, has got to change. You can't have that many steps, that many people with their hand out, and have a business model as an industry that makes any sense at all. We're protecting a bunch of buddies. And I'll leave it at that. And that has got to die.

That's where Conduit and even this level that we're doing with Landus, taking all the guesswork out, let Synthesis do its thing is the next evolution of this. Today, we have it insured because we don't have Synthesis at its full capacity. But there's insurance companies willing to do this. And the day of the rate shows in that. Like, this is awesome.
So I think yes is that answer. And there's some of it even happening for a first time right now as we speak. How long it will take for agriculture to move this through depends on the market share growth that's taken. Because AG is a great follower, right? I mean, you take share, they'll react. Until then, the world's perfect. Just ask us.

Right? Even though it's not, we're going to play that card. So things like that are happening. And I think this is just the beginning. As you look at what could be coming with sustainability and different dollars back to farmers growing that, I don't know what the new administration change will do to that.

But based on the path we're on, I think there's huge opportunities for things like you're talking about,. And it has to happen soon because change is needed for these farmers to compete long-term.
 
DAVID OPPEDAHL: You mentioned sustainability. How about green fertilizer? What are you doing in that way?
 
MATT CARSTENS: I should never let you have a tour of our facility before you come to here, should I, David? One of those companies we have up in the Innovation Connector, we just built a green ammonia facility with them in Boone, Iowa. So if you go to our new facility in Boone, Iowa, we make some of our own products that are all yield- enhancing products, not pesticides and that, but more yield-enhancing products. There's a facility that is a demonstration. One ton a day that facility produces. It's been up and running, produced for a little bit.
 
And then, we shut it down. Talus is the company. Talus AG is who runs that and owns that. We do all the distribution of it. Ran, it produced. We need to make-- they needed to make some changes. So it should be up and running again permanently starting in January. And then from there, we're building 220-ton-a-day facilities, which will be enough to feed our whole system, actually, in Eagle Grove, Iowa, and Manning, Iowa. So if you look at the state of Iowa, they kind of are on opposite ends of the state. And we're really excited.

That green ammonia is the same Ci reduction as a pipeline. So you think about all we're doing to try to get these pipelines and the wrestling over that. I'm not saying I'm for or against them, just saying that's what it is.
 
DAVID OPPEDAHL: The pipelines for carbon sequestration.
 
MATT CARSTENS: Yep, this production of nitrogen is the same CI, just maybe even slightly better of a CI reduction than a pipeline. So we're putting that power back in the farmer's hands with or without a pipeline and really able to control that. And we're excited about what that can be. So Talus AG, you can look it up. You can see it in our connector or real life about 45 minutes North of Des Moines, Iowa, in Boone, Iowa.
 
DAVID OPPEDAHL: Any other questions from the rest of you?
 
AUDIENCE: Yeah, I'm curious what, if any, views you have on the future pace of consolidation in agriculture and what you would highlight as either the benefits, costs, or risks associated with that.
 
MATT CARSTENS: Yeah, this is one I hate, is the one I don't know the answer. But I'll give you some history. Our family is a big independent hog producer in Iowa. And by big, it ain't that big. There's 18 left in Iowa that are independent hog producers. When I was growing up, that was probably 3,500 to 4,000. And today, we've got 18. Now, I don't stand-- sit in front of you in front of this beautiful fire we have and say, I think that's going to happen on the land side. But it's going to be a pretty dramatic change.

Our largest farmer in Iowa, when he came into my office, now probably just short of two years ago, was 35,000 acres. Today, he's over 60. Now, that's a family-ran business, purest definition of family farm. His boys are all involved. His wife's involved. And then, they employ a bunch of people. But it's coming. Do I like it? You know, on one hand, obviously, no.

But on the other hand, we can't find workers. It's just getting harder and harder by the day. Also, is 60,000 in a state like Iowa, Illinois, in your district, is that right? That's probably high. But I think there's two on his heels that also do a good chunk of business with us, three or four more behind them. And I would just caution you all to open your eyes. I don't think it'll be as fast as what we saw on the livestock side. But it's coming. And we're watching it. And we just can't see it.

I mean, the numbers are staggering. Those top 10 farmers of Landus, where they were two years ago and where they are today, it blows your mind. And I think that's going to continue. The thing we should fear is we've got to make sure it's not foreign ownership. And that I think our government's, state and federal, are doing a better job of acknowledging. But I think we still have a long ways to go there.
 
One of the biggest landowners, and this isn't a religious statement, it's just a fact. One of the biggest landowners we have in the Midwest is the Mormon church. And is that good or bad? I don't know. I just know it's happening. And we've got to open our eyes because we won't have a say if we don't open real quick and decide where we sit on this and what the pros and cons are. I think there's some of both, without a doubt. Our 60,000-plus farmer that's got a family business, that's great. It works pretty well. But boy, that's an interesting business. And it's coming.

There's nine more behind him. And they're close. And you just start doing the math on a state with-- what have we got there? 28 million acres of high-producing row crop land. It's close and quick. And I wouldn't sit in front of you because you're all way smarter than I am. But we probably should answer that question. I'd say from a business side, we're struggling to find people as well. So maybe less is better for us. But you miss on three of those farmers, that takes our P&L in half in any given year. So as much as the personnel side, you can throw a pro to it. The P&L side is, without a doubt, a con.

So we better answer it. And I can't answer it today, which is probably unacceptable, quite honestly. But my watch out is it's happening. And it took the livestock side no more than 15 years. I think land, we're on no more than 15 years again, and maybe closer to 10 with the recent numbers we've seen there. Thanks for the question. We want to end on that staggering, great news?
 
DAVID OPPEDAHL: We do have another question.
 
MATT CARSTENS: Hopefully, you didn't slam your fist down going, I hate this guy. I get that a lot. Don't feel bad.
 
AUDIENCE: I have two points of contention here.

MATT CARSTENS: Yeah.
 
AUDIENCE: You said foreign ownership. Less than 5% of all US AG land is foreign owned. And if you take out forestry, it's more like 2%. So I would push back on that being our biggest factor. You say that consolidation is coming. Yet, you also said that family farms aren't ending. I find that hard to believe. It doesn't make sense because a family structure can't have a successful pass on generation to generation without some business model that's beyond just word of mouth.
 
MATT CARSTENS: Yeah.
 
AUDIENCE: I'd also like to push back on the livestock side. It seems like that's still consolidating. Now, we're almost to zero competition it seems like between swine. I mean, you look at-- is it JBS? I think is the correct--
 
MATT CARSTENS: Yeah.
 
AUDIENCE: Yeah, they're pretty much dominant. If they have a bad year, everybody's paying and consumer. So I guess I'm just a little upset the fact that you said foreign ownership is what's causing this. I'm a little confused on what that had to do with anything.
 
MATT CARSTENS: Yeah, so on foreign ownership. I would just say this. I won't get into debate in front of everyone. Do your homework. If you think you can pull up a report that says China owns this much, you're absolutely crazy. I'll give you a personal story. I used to have a home in a rural area that was on a lake. And a guy bought the house two doors down. And ironically, paid cash. And the deal actually fell through, even though he paid cash.

But I went over and introduced myself as he was there looking. And I go, what do you do? And he goes, I buy land for China, Chinese companies. Like, what? I thought that was illegal. Like, you couldn't do that in the state. So then, I started doing my own research and finding they're like, well, look at this. And this ties to this. And this ties to that. It's not as black and white. I do not know the percentage. That I cannot tell you.

But I know it's bigger than we think. And we know. And I know it's an issue because our government is talking about it very aggressively. And particularly, the senators from Iowa with Ernst and Grassley have been really good champions. And I'm proud of them for standing up and getting to the bottom of whatever's going on here. I don't perceive to be the expert. Something's going on. We've got to figure this thing out. And if it's 1%, or 5%, or 10%, I don't care. That, to me, all of those numbers seems like too many.

I mean, think about that. I mean, AG is how we feed and fuel the world and clothe it, by the way, mostly in this country. I acknowledge there's other good countries too. But this one's pretty darn good at it. And here's this thing that you go, not a problem. I go, I'm not sure. But it's a bigger problem than we think. How do we not know this answer? This is United States of America. And we're sitting there going, I'm not sure what the answer is.

So do your own research. Come up with your own deductive reasoning. I assure you, there's a challenge here. Don't take my word for it though. Follow some of the work that the government is doing on it. And do some on your own. And I think you'll find some interesting twists and turns there.

Relative to the family farms, I don't think the family farm is going to die. That's 60,000 acre farmers. Absolutely a family farm. What will go down is the number of family farms, without a doubt. A lot of them are struggling to get the next generation to come home and farm. I mean, a lot of them come and work for Landus or the Feds. Or they went to college. And they want to do something beyond being a farmer. I'm not saying that's wrong.

I'm saying the number is clearly going down. And we've got to do something to make sure those keep coming back. And we protect what we can of the family farm. But the number of family farms, without a doubt, are falling and falling at a pretty steady rate. Again, is that right or wrong? I don't know. There's just a ton of complexity.
What was your last one?
 
DAVID OPPEDAHL: The farm transition, how is a family farm, like 60,000 acres, going to be able to transition to the next generation and stay a family farm?
 
MATT CARSTENS: This one has done successfully. His kids are all in it. They actually homeschooled them. I don't think they would mind me sharing with them. And they are all 18 years or less. The last one's just finishing up school and will be joining the farm. That's how they did it. Right? I mean, it's their farm. It's that one family. It's not like our family farm is multiple families with the same last name. Theirs is one family, one name. And what will happen with their kids when they have other-- I don't know. It's a challenge, without a doubt.
 
I think there's been a lot of good progress with insurance policies in that made on transitioning family farms, like is what our family operation is doing. So insurance makes it possible. There's a lot of complexities to that. But there's getting to be better ways and more known ways to do it. So I don't think the family farms are dead by any means. But also, a big land buyer in Iowa is called the Delta Group. Look that up. That's one individual in the Delta that's buying a lot of land. I never met the man. I don't have any issue with it.

But to your question, how do we feel about it? I don't know. This is all-- I'm giving you data that's no more than three years old. And this is happening right in front of us. So to the tension that we all have, we need answers on this. And I share-- I will slam my fist down. And in this topic spirit of we should have answers to this instead of vague shades of gray of what I see, what you see, what you see. That's just not right. And we deserve better. The agriculture sector deserves better.
 
DAVID OPPEDAHL: Well, unless someone else has-- one more question there.
 
AUDIENCE: I saw a really interesting report just the other day about the top 100 landowners of agricultural land. Most of them are not farmers. And they're not farming the land. They're actually just renting it to farmers. And some of them are the biggest billionaires in the world.
 
MATT CARSTENS: Yeah.
 
AUDIENCE: Which the top 100 farmers, I was kind of stunned to see this trend of buying--

MATT CARSTENS: We've got a session in two weeks in Des Moines with a group coming out of New York. Because the problem is look at what Iowa-- I'm just going to pick on Iowa here. Iowa farmland, what are we at? $12,000, $13,000 an acre? And some of the land is going for $22,000 to $28,000 an acre? How do you transition that? I mean, that's real cash. Like, no bank is going to take that risk. So you end up with these big pocket books, whether it's other countries, other buyers. I get it. Our role is-- and what I'm telling you, I guess to be really transparent with you, what we're doing is we're finding a way to connect our farmers to those buyers. Because I don't have a solution for the transition, although there are some.

So you look at the massive movement of an Iowa, an Illinois, an Eastern Nebraska, Northern Missouri, Southern Minnesota, and on, I mean, how do you transition that when farmland is what it is? When the ups and downs of a market? Where you've got China, who used to be our biggest buyer by a mile, exiting the market? These are real challenges. So I love talking about tech because as a positive. There's a path there.

But these are other things that literally keep me up at night. And I don't normally talk about them unless I'm with David. And he gets it out of me. Because there isn't an answer. And it is frustrating. I've got my own family farm. It's got to transition. And I'm not going back to it. So now, it's down to my cousins. How are we going to do that?
 
How do they compete with-- in our neighborhood, anybody heard the name Harry Stein, the richest guy in Iowa, well known, big seed dealer, Stein Seed? He buys land and ours. When he shows up, just turn around and walk away, unless you want to drive the price up for him and make him mad. And I have nothing wrong with Harry Stein, a great human being. That's who we compete with to buy land. There's a day in the life of the farmer. And this is-- I'm just giving you my examples. This happens on every corner of our country in agriculture.

And how this ties to the feds, I don't know. David, you can wrap this up and make it work for us. But it's a great point. All of them are great points. And these are strong challenges that are very, very great to me at best.
 
DAVID OPPEDAHL: Well, our fire's down to the embers here. I think we've been at this long enough. And we'll appreciate Matt's honesty and his laying out some of the challenges that are facing agriculture today. And appreciate your being here. So let's give him around of-- thanks.

And next, we'll move back to the other room for a panel at 1:30. So we'll look forward to Nathan Kaufmann and his leadership on that panel.