We sat down with Shay Foulk, an ag business consultant who hosts the Ag View Pitch Podcast, to discuss the challenges facing farmers trying to secure their land base in an increasingly competitive market.
Here are six takeaways. Listen to the full conversation here.
Land sales are only getting bigger & chunkier
“We’re not seeing as many tracks come up for sale that are 40, 80 or 100 acres. We’re looking at 200, 400, 800-acre purchases at a time from a single landowner.” – Shay Foulk, Ag View Solutions
Landowners may want to sell to farmers, but many farmers aren’t prepared
“Landowners appreciate or know you as a tenant or know you in the community. They want their cash and to be done with it. They would prefer to do maybe a private sale instead of having to go and put it on auction… But by golly, you better have the capacity and you better be ready for those opportunities because they’re not going to be here in two years.” – Shay Foulk, Ag View Solutions
Access to capital is holding many farmers back
“It has never required as much capital as it does today to go farm, whether that’s equipment, inputs, and especially the cost of land. At the same time, we have a lot of landlords that are passing their wealth on to the next generation. To just keep the ground that you farm today, you might need to go out and buy it. That is a really tough spot for any business person to be in, especially in something as tough as agriculture.” -Ben Gordon, Fractal CEO
Farmers must rewrite their growth playbook in an increasingly competitive market
“You need to figure out how to be competitive in an investor-driven market moving forward. And if you’re not, you’re going to be left in the dust. And so what are your solutions? What are your opportunities? Because right now you wear so many different hats as a farmer, you may not be thinking about the long-term growth strategy. You may not be thinking about these opportunities to pick up 300, 500, 1,000 acres. And if you’re not, you’re going to look back someday, you’re going to regret it.” – Shay Foulk, Ag View Solutions
Fractal is a new financial tool that brings investors alongside farmers
“It’s really tough to compete with investors, especially when you need more capital as a farmer. And so we’re just trying to flip that on its head in a way that we think makes sense: Bring investors right alongside the farmer and keep that farmer in control. And we think that is a heck of a financial bet for an investor. And for us building a business.” – Ben Gordon, Fractal CEO
Farmers are using Fractal to access the debt they need to accelerate growth
“There’s a lot of farmers that have a strong balance sheet today… they’re usually thinking about us as (1) a complement to debt and (2) another source of capital that can help them through the downturn — not to survive, but to be able to grow. They’re thinking about us in a longer-term view because they know that having this source of capital, when they played out with their landlords and how much they need to grow in the next 5 to 10 years – they know that something needs to change.” – Ben Gordon, Fractal CEO
Learn more about how to access the capital you need with Fractal, so you never pass on a land opportunity again.
Note this is not investment advice. The information contained should be used for informational purposes.
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