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00:00:01
Can You Put a Value on Healthy Soil? With Cole Allen
175 Plays3 months ago
When it comes to building a robust regenerative agriculture movement, it takes more than just farmers. Cole Allen of Grass Fed Valley is pitching in in his own way by leveraging years of experience in the financial world to help regenerative farmers solve their most pressing business challenges.
We discussed the importance of local context and farming knowledge when advising clients, and dig into what it would take for the financial system at large to begin to properly value the ecological benefits provided by regenerative farming practices.
In this episode, we cover:
- How health challenges and a cross country odyssey inspired Cole to quit his job in finance and start working in regenerative agriculture
- The importance of the local context of each farmer when making business decisions
- The challenger of valuing the ecological benefits of regenerative agriculture in our current financial system
- The emergence of new kinds of funders who are prioritizing ecological health
- Why their services encompass much more than just fundraising
- The opportunity to reconnect people with the land and how that can shift perspectives
- And much more...
More about Cole:
Cole Allen is a generalist working across the fields of finance, business development/strategy, real estate, health and nutrition, hospitality, entrepreneurship and regenerative agriculture. He founded Grass Fed Valley (GFV), a company serving Farmers focused on regenerative practices and impact through various business, financial, and marketing/branding services. Cole spent four years traveling the US meeting, connecting, and learning from these Stewards of our Soil. The company’s mission is to "Inspire our children to be Farmers and reignite our passion for the living world". Prior to GFV he worked as a business development/strategy manager at a Fortune 500 real estate company and at an investment bank as an equity research associate. He graduated from the University of Virginia with concentrations in Finance and Accounting, is a current CFA charter holder and certified Nutritional Therapy Practitioner.
Agrarian Futures is produced by Alexandre Miller, who also wrote our theme song.
Transcript
00:00:01
Speaker
The problem becomes nature doesn't fit into a neat box and the financial world wants to buy and sell widgets and nature is just not a widget. And so I think that's where we run into all the difficulties with adoption from a financial perspective is that it's not widgets, it's nature and it's complex and it's very hard to value and then take that exact same methodology and apply it in a different context.
00:00:36
Speaker
You are listening to Agrarian Futures, a podcast exploring a future centered around land, community, and connection to place. I'm Emma Ratcliffe. And I'm Austin Unruh. And on the show, we chat with farmers, philosophers, and entrepreneurs reimagining our relationship to the land and to each other to showcase real hope and solutions for the future.
00:01:06
Speaker
Welcome Cole to the show. To start us off, could you tell us a little bit about Grass Fed Valley? Yeah, thank you so much Emma and Austin. Grass Fed Valley started about three, four years ago at this point. It started back in 2020 when I actually got pretty sick and that sickness made me take a really deeper look at kind of my environment and what was affecting me as a person and my health. And I ah quickly realized that There's an extricably interconnectedness in between the health of the soil and the health of the food that we're eating and the health of the people that we are. And so as I started to heal, I actually went on an omatic adventure throughout the United States visiting regenerative farmers along the way and figuring out how I can kind of lend support to that system.
00:01:56
Speaker
And that's kind of the genesis of grass fed valley. And so grass fed valley provides financial services, marketing services, branding services, and really project management services to regenerative farmers so to give them more time back in their day to tend to the soil and provide the necessary practices to heal it. Yeah. And I want to later in the show, get into a little bit more of what that looks like, but first, could you tell us a little bit more about your nomadic adventure, what you learned and yeah, what, what was that like? Yeah, absolutely. So, I mean, it was, one, a lot of fun. Got to see a lot of really cool places meet some really incredible people along the way and was able to dial in and see all these things that make us different and all these things that make us similar. The first of all, the space, and the regenerative ad space is incredibly welcoming.
00:02:45
Speaker
you know I was somebody that was working on Wall Street and then a large real estate investment trust and so I was an outsider looking in. But every single person I reached out to either made time to answer a call or or made time for me to come on site, come on farm and and learn from them. That journey was incredible. Everybody was a wealth of knowledge trying to share and learn what makes the complex system that is nature kind of work and produce fruit veggies and and meat and livestock and all of that great stuff. So did a couple laps around the United States and in that got to visit farms from all different types of geographies, topographies and environments. It was a very holistic view and incredible experience.
00:03:25
Speaker
What were some of those farms that you got to see and be hands-on? so Actually, ah the savory hubs is really kind of how I started that journey. so Going to different savory hubs throughout the United States, the first one I went to was actually in Virginia. Daniel Griffith down there went and visited him. and Then actually quickly went to White Oak Pastures down in Georgia, and then did a couple others kind of as I made my way west, Gunnison, Colorado, Gold Harbor, and Parker Pastures. There's more and more, and anding as you got to meet one person, they would invite you or introduce you to the set you know the next person, and it kind of just grew that way. so hang in and all we visited I visited over 30 plus farms um over a multi-year period, and it was i mean everything from small 10, 20, 30 acres to thousands of acres is is kind of what I got to see.
00:04:19
Speaker
And going into this, as you said, you came from Wall Street working in real estate, ah so I assume didn't know too much about farming. Did you go in with any specific expectations around what you were going to discover and how did that end out panning out? Yeah, no, not not really. I mean, like I said, I came from a health journey aspect of it and really I've always had just such an ah affinity for learning about health and and being proactive about my own health, exercise, getting outdoors, all that great stuff. but then like
00:04:50
Speaker
The more I read about regenerative ag, the more I was just kind of enthralled with it. Like, hey, here's like, you know, nothing's a silver bullet in life, but like, here's this thing that's like pretty impactful to like anything i and everything I care about. And so I was just like, man, how do I, how do I learn more? How do I get involved in this space? And then, you know, one conversation leads to a next and people are, talking about these really cool ideas and you're talking about like impacting people's health on a major scale by just participating in land management in a way that like we used to do but we don't anymore. And so, no, I had no expectations going into it and that openness like really kind of just led me to different places like ah like a leaf in the wind but like it was such a cool ride.
00:05:37
Speaker
I'm curious, Cole, what were some of the things that made a significant health difference for you? Was it reducing the chemical exposure? Was it more nutrient density in food? Are you able to put your finger on some of those things that move the needle for you? Yeah, I was. And so and I was ah actually talking with someone recently who put it in like really good terminology and was basically like, we're all this reservoir, like we're all individually this tank of energy. And every day you're taking in good things, nutritious food, healthy water, sunshine.
00:06:14
Speaker
But you're also taking in toxic things, whether that's chemicals or in my case, it was kind of more mold related. and So it was mold or bacteria, you know, yeah EMFs, all these kind of different things. And so like everyone's tank refills at a different rate and empties at a different rate. And so like eventually living in this world that is becoming increasingly more just like chemical laden, inputs laden that are kind of non-natural. It's natural that people are know starting to get more and more sick with what you're which is exactly what what you're seeing and so as i started to kind of travel i was naturally outside more i was working in the dc area you know in an apartment building very much city and so not a lot of outdoor access or access to healthy water, you know food is kind of hit or miss. You can go to Whole Foods, but sometimes that only gets you so far. So as I started traveling, I noticed just being outdoors more made a huge, huge difference. And then the food kind of just compounded that effort.
00:07:16
Speaker
So I'm curious, as you went through this journey and you got to see so many different farms, I think a lot of people would decide from there to then get into farming themselves, right? And that would put them in a position to be outdoors all the time and to be hands on on the farm and to be the one that's raising the crops or raising the livestock and making that difference firsthand. But you've decided to take a different approach. Can you tell us a little bit about why you decided to develop a financial services company rather than go into farming yourself?
00:07:47
Speaker
Yeah, absolutely. So it's kind of a multi-pronged answer here. One is, at first when I started traveling and asking these farmers and meeting these farmers, that the first thing and that I would ask them are like, what are their pain points? You know, like, where where do you have the most trouble in your day-to-day farming operation in your life? And almost all of them would reply somewhere in those top three with finances as being their top concern. you know and it was It looked a little different for each person in terms of what that finances meant. For some people, it was raising capital. For some people, it was budgeting. For some people, it was like figuring out how to use grants. you know and so like It was just a wide array, but it all dealt with money and financing. and so
00:08:26
Speaker
From the get go i was either asking leading questions are just being led to this area that i had expertise in. So it made a natural fit to start trying to help out there secondly and this is kind of a more profound realization as i travel more and more and kinda gained more experience here is that. We have this idea in our society that we have to do everything ourselves we have to be self sufficient everything needs to be done by us. And as soon as you get into nature, you realize that's actually never the case. Here I am like, I want to be outside, right? But also I have this talent or this experience, I should say, that can really help these people that have the experience to heal the land.
00:09:08
Speaker
And so, like most things in nature, working synergistically, symbiotically with farmers made way more incense for the greater impact that I could potentially have on the state, the region, the world, what have you. So that was a kind of more profound impact that's led me to continue to pursue this. And do I want to have a cow or two and maybe some chickens one day? Absolutely. But I definitely don't see myself becoming you know like ah like a white oak pastures or Alexander Farms or any of these like great kind of farms that are on multi-thousand dollar pieces of land doing it at a like much larger scale. So you're you're traveling across the country visiting all these farms. At what point do you start thinking seriously about starting a company?
00:09:54
Speaker
Yeah. So I basically did all this farm stuff on the weekends and kind of after work. So I was working still my kind of corporate job during the day. And so it was beholden to that world. And I was really caught in between this kind of crazy split world of like being on a call with investors and people within the company that are, you know, for through no fault of their own but they are at a for-profit company that's publicly traded or in our behold into kind of quarterly earnings and meeting numbers and talking about you know about increasing revenues decreasing costs all of that fun stuff and then likewise i started communicating with farmers and doing kind of you know just.
00:10:37
Speaker
Working volunteering work but those business conversations were more dealing with like making an impact on the community producing nutrient rich food and so like one was very numbers money focus and one was more community impact focus and I just realized that like. man, there's one of these calls that I really want to be on and there's one of these calls that I don't necessarily want to be on nearly as much. But with that, realizing that like, hey, look, I'm a human being in this world that does run on money. It takes money to live. And so like, how do you finance this passion and this world that you want to be in while being still responsible steward to the people who see yourself and to the people you care about from a financial perspective? So it took a long time.
00:11:21
Speaker
But gradually over time, I built these relationships with farmers and slowly started to see that there is some money there to to start a career there. And so it was a very gradual transition that happened over multiple years. There I built up a clientele base and was able to support myself and then finally able to make the decision like, hey, this is really what I want to do. Let's put everything in and and go for it. It's funny because it sounds um very similar to Austin's story in some ways. Yeah, absolutely. For me, it was starting very, very part time planting trees along streams. And then over time, getting a couple of clients that were interested in planting trees in their pastures, but there wasn't funding and support for that.
00:12:03
Speaker
It was a multi-year transition and very slow to eventually get to silvopasture. But I knew pretty quickly that this was something that was very interesting and and something that there was going to be significant demand for if I could develop the business for it, if I could develop the the services. And it sounds like something very similar for you. There's really a ah significant need out there for the type of creative financial services that you can offer to regenerative farms. And if you can get started and get your foot in the door, that that has the capacity to really grow over the years ahead. and
00:12:39
Speaker
No, absolutely. I would say two things. One, there's the definite need. Every farmer that I talk to has some sort of need for this. It varies in degree, whether it's just, hey, here's a project or hey, can you become you know a quasi team member? So there's an absolute need. But then it really is relationship-based, as everything in life is, is relationship-based. And so these farmers are looking for partners that can do some of these things that they frankly don't either don't want to do, don't know how to do, or just don't have the time to do. And so like, okay, let's partner together, develop this relationship and and see what we can get after. And that's been a really fun and just awesome ride to be on these last few years. And somewhere along this journey, you spent some time at White Oak Pastures doing the apprenticeship program, if I'm correct. Could you tell us a little bit about that and what you learned there?
00:13:28
Speaker
Yup, so after probably a year and a half of of nomading, I quickly realized that if this is truly going to be my future and where I wanted to be in, well, I can only give so much finance advice without really knowing how a farm worked. And so I was like, let's go get our hands dirty. And I had developed a really good relationship with White Oak, just such an awesome, awesome farm and family and friends down there. So I reached out to Will will Harris and was like, hey, i I wanna get on the farm I wanna chase some pigs around and he was like, yeah, just come on by say when and so the spring of twenty two I came by to white oak and ah yeah, I did like a three month in quasi farm internship quasi like financial internship where it was kind of like certain days were on the farm and certain days were.
00:14:17
Speaker
in the office kind of helping them from that perspective so yeah that was an awesome experience and man something about manual labor is just amazing more people need to do it and i grew up my dad did it and i love doing it with him when i've grown up but just like getting outdoors is is amazing so it was an awesome experience and and really glad that i got to do that. but You weren't run over by any cows are. I actually blew out my back wrestling a goat um and kind of like crashed on the floor for like three days, but then eventually rose again and got back out there. so It was a crazy experience, but no, I was fine by the end of it. It was good.
00:14:56
Speaker
Cole, I'm really interested to learn more about your work at White Oak Pastures, particularly when it comes to like the financial side of things, because you get a really good shout out in Will Harris' recent book. I was listening to the audiobook version, and this is after we had been introduced a little bit, and I heard Will, as he's narrating in his wonderful voice, ah mention your name and the services that you're providing there. But I'm curious to to hear more, because I think it was in the context of Will going out and looking at acquiring a new piece of land. And there was one piece of land that was regeneratively managed, very well taken care of, was growing topsoil. And right next door to it was this beaten down, degraded piece of land. And when someone from the bank came to estimate the value of the land, they basically had the same valuation for both pieces, regardless of how well it was taken care of.
00:15:49
Speaker
regardless of how well that that land is going to grow, forages that are going to then feed livestock. So one is going to be much more profitable, but they're valued at the same amount. And Will was saying, we need a way to assess the productive capacity of the land and change the value of it from the bank or whatever. and so And I think it was then that he mentioned your services. So I'm curious to learn more. Yeah, so let's back up to like first visit on farm. And it was ah in February, 2021 is the first time. And this so that's like the very beginning kind of of my nomadic journey and very green about anything, you know, agriculture, specifically regenerative agriculture. And I come down to the farm and I'm very much still like a ah hundred percent working in the corporate world and just kind of trying this out on the side to like and more of a curiosity. And I came down to the farm and it was a rainy day.
00:16:44
Speaker
And Mr. Will drove me around in his Jeep, kind of telling me about the farm, talking about all these stories. just just He's an incredible storyteller and and incredible, just well of wisdom. And ah scales are falling off my eyes as I'm getting toward around this property, and he's talking about the community, and he's talking about all these great things. and I was only there for 24 hours and I remember calling my buddy leaving that place just completely through the roof. I was just so energized, so ecstatic about everything I saw and quickly realizing that everything that I had done in my career after that point in terms of valuation
00:17:22
Speaker
none of that was being captured in what was happening on the farm. And so I was, came up with this crazy idea of like, can you value it? Like, is there a way to value it? Cause that would speak to so many people in the financial industry. If you could find a way that they agreed with that, like, was like, Hey, here's a value to all this things. And then man, like what, what that could mean for getting regenerative ag to like the next level of growth and stuff. I kind of went back and forth with Will for a while on kind of pitching this idea. And finally he was like, yeah, let's do it. And so I spent probably like six to eight months working with the team there developing this model that basically takes intangibles previously like unable to verify, unable to like put a value to. And I dug into lots of research and kind of combined and created new methodologies to give some of these things values. So you know like the value, like you were talking about, that the little land. like What does it mean to have land that is a higher soil organic matter than the one next to it? like Is there tangible value to that? And the answer is there is.
00:18:28
Speaker
There's water holding capacity, and guess what? like A lot of the Western United States has a lot of water problems, and so there's true value in that. And so we ascribed a bunch of values to this, and the works spit out what he mentions in the book. and you know There's just an undeniable multitude of value not being calculated. And so that is a presentation that i give a couple times a year down at a center for agricultural resilience kind of going through that work and that's the nonprofit down in bluffton georgia created by white oak and so. Highly recommend that to anybody that goes down there is such a cool place such a cool experience to get down there and to learn what they've done down there but the work that the one of the main takeaways from that work is like.
00:19:14
Speaker
Hey this model is like ah it a new way to think about value and if there is somebody within the financial system that's willing to take on that viewpoint. Well there's now evidence to prove that like hey there's extra value here that's not being currently calculated and what that means and could open up to additional capital into the space is is tremendous. But that was my initial work down there with them, and we revisit it every now and then. Like I said, there's a presentation that gets presented, but that work, unfortunately, fortunately, has been backburned because financial institutions on a whole haven't really been able to see that value. you know It's very much the traditional financial industry is a creature of habit, and a creature of what's been happening the last 10 years is the way we're going to do it going forward.
00:20:00
Speaker
and so There's still a breakthrough that needs to be had there in order for that model to really take hold and to impact finances and capital into the space. Is there any intersection with some of the work that's been done in the financial markets around valuing ecosystem services? There was an article that came out a few days ago in The New York Times called, nature has a value, could we literally invest in it? And it's, if you haven't seen it yet, it's an interesting read. Not sure I agree with everything. But it talks about natural asset companies that are trying to do something along similar lines. Is is there any intersection between that work and kind of what you were doing?
00:20:42
Speaker
Yeah, so I'm not as familiar with natural asset companies other than I know that they exist, but I don't know the inner workings of it. But I will make a point on kind of as I dove into that type of work, I thought I was being really original and I wasn't. And you quickly realize that is that there's someone that's always had the idea before you and someone way smarter than you. And and that is true. But in that, I realize that it's it's a whole field, you know, and there's lots of people, organizations, nonprofits, companies working out there trying to solve it. because there is just blatantly value that we are not accounting for in our systems. you know There's a variation of credibility that you can go on, like so a scale, if you will. it's like That's definite and like that's like, maybe, maybe not. and So we'll see what happens. The problem becomes nature doesn't fit into a neat box.
00:21:32
Speaker
And the financial world wants to buy and sell widgets and nature is just not a widget. And so I think that's where we run into all of the difficulties with adoption from a financial perspective is that it's not widgets, it's nature and it's complex and it's very hard to value and then take that exact same methodology and apply it in a different context. Yeah, and it is kind of trying to apply our human society onto nature. It's like assuming that art that the systems we've developed, like the market, you know, these these systems that kind of regulate how we organize and interact with each other as humans can be applied to nature, but nature also has its own potentially even greater kind of wisdom then than we do.
00:22:18
Speaker
I mean that's why it kind of goes into ecosystem markets and carbon markets currently all that kind of stuff which. Yeah and carbon carbon markets is where people are fixated because carbon is probably one of the easiest things to measure and we're very stuck on measuring to 100% certainty or 99.99% certainty what something is. Whereas some of these other aspects of of nature are we have less certainty over. I'm curious Cole to understand how being able to ascribe a more ah more accurate value to land that's being well-managed and has good, let's say natural capital to it, good topsoil, good drainage, well-managed, it has good vegetation on it. How that might help.
00:23:04
Speaker
farmers who are farming regeneratively get an upper hand compared to those who are taking land and essentially mining it um and reducing the ability for that land to yield crops in the long term. And right now there's really no way for us to differentiate between those two and the value. And we want to incentivize people to continue to build on that land. So I'm wondering how you might see that shake out in the years ahead if you and others who are working on this are able to get some transparency. Yeah, so the long-term answer is exactly how you just laid it out, how the traditional or industrial farmers are mining the land. Well, eventually mines run dry and that's exactly what will happen. And so when that happens, there's going to be a natural shift to a more regenerative way. However, that's like trying to predict when the stock market's going to crash and when it's going to go up. And so it's like, yeah, maybe it's 50 years, 60 years, a hundred years, 200 years, two years, like,
00:23:59
Speaker
You know, that's that's really hard to do, but I do think that you are seeing with kind of this climate destabilization. um I think things like water are going to be the tipping point. The ability to truly retain more water on your land is an obvious huge benefit for any type of farmer, you know, whether it's crops or livestock, like having more water in the land. means that you can do more with it. And so I think you're starting to see, you know, there's, I don't know, it's private equity shops, but there's a lot of people buying large swaths of dried up decrepit land out West. And I'm curious to see what happens there um because I think there is this huge value proposition to the idea that you can regenerate land. And so if you buy, ah you know, dried up, non-biodiverse kind of mined land,
00:24:49
Speaker
and you bring in a farmer that can actually regenerate it, well you're actually creating unbelievable value. And I could see that kind of, I don't know if it'd be the next gold rush, maybe it's the next green rush, and that'd be kind of exciting to see. So I think that is a potential where we could go, but the timing on that is just really, really hard to nail down. I think there is so much value that is going to be realized by regenerative farmers. The scales are in their favor. Now we're going to try as humans do, try to create technological things that maybe give us the leg up on nature. But I just think the balance always swings back to kind of how things act on a second by second, day by day, year by year, millennia by millennia basis.
00:25:30
Speaker
And I'm guessing that these private equity shops are typically buying up water rights or gaming kind of like large scale water plays, getting access to water, that kind of thing. But I don't think they'll ever be able to understand and therefore leverage. the ability of a farmer to create decentralized, small water, capture different techniques to kind of have water circulate better through the land. like That mindset won't ever be able to, I think, understand real tools that regenerative farmers have to use water. It's a super important point is that it is a mindset change because that's what actually enacts real change at ah at a broader scale. And I agree with that 100%.
00:26:11
Speaker
Well, could you tell us a little bit about some of the other projects that you're working on? And you can keep confidentiality if you need to for clients, but whatever you're able to share, it'd be interesting to get a little bit more detail about some of the other projects you're working on that are able to add value, add significant value to the bottom line for a farm. Yeah, one ah a lot of times it's it's just being a problem solver for farmers, you know, whether it's like, hey, I've got this idea. How does this look? How does this sound? What does this mean? And then it's like putting numbers to it, whether that's working in Excel to kind of build out a model, or it's kind of like running down and being project manager to be like, okay, well, if you go to this area, we can sell this for at that price. Or if we go to this area, we could sell it for this price, doing market research, things of that sort. So it's like,
00:26:58
Speaker
It really is a wide array of different services that start with getting to know the farmer's context, um because that's the most important part. to To come in there and say like, hey, this thing worked over at White Oak, it's definitely going to work here is just missing the point considerably. each thing is different and so it's like how can we leverage my financial experience and some of our other team members experience to meet the farmer where they're at and and then help them take that next step in their business whether that's strategy whether that's financing marketing what have you it really is kind of a case by case basis.
00:27:36
Speaker
Yeah. And I'll share a little bit about how we've been working together. I worked for several years just slowly putting the other pieces on a spreadsheet to try to figure out how much is it worth to put a tree in the ground. So if you're putting a tree in the ground, especially one that is going to feed livestock and provide shade for livestock, how do you ascribe a value to that? It's really hard because if you're doing something like selling chestnuts or selling hazelnuts, You know how many pounds you're going to be producing roughly and the value of those product per pound. And it's pretty simple math to be able to to determine how much money that you're making. Whereas for trees that are there mostly to offset feed costs.
00:28:19
Speaker
you don't have a bill of sale, you have a lack of an expense. So it's really tough to kind of get into the numbers and figure out how much money am I saving on that. And so I slowly put together this Excel model. It was so crude and hard to work with that I could hardly use it, much less anyone else be able to use it and understand it. So right, Emma, it took like a half hour just to explain to you how to use this model. And so that's when I approached Cole and said, Cole, how can we make this model simple for people to understand so that we can as cleanly as possible communicate to people
00:29:01
Speaker
with the value of planting trees into pastures. And that's the kind of service that has been very useful for me, just trying to communicate more clearly the value of land that is being stewarded well, and it's hard to put a monetary value on that. Absolutely. and And I'll say on that point, so you know one of the main benefits I see of grass-fed value services is that bridge between people of different verticals. you know It's being able to communicate from the finance industry, which has all these technical fancy terms to farmers who obviously they don't have that background.
00:29:39
Speaker
And then likewise, you know, as we've learned more about farming and agriculture to transfer that back to the financial world and be truly this kind of bridge of communication that allows people to simply understand each other. So that's like one of the biggest values we see that we offer here at grass fed. Yeah, and and I would say that in my experience working with your call also, if you only had financial experience, you wouldn't be all that helpful. It's like the financial experience combined with like pretty in depth knowledge of farming that makes it valuable. Because then you get to apply the rigor, but you have the understanding of context to be able to, you know, understand some basic numbers around cow calf and that sort of stuff.
00:30:21
Speaker
Yeah, it's really beneficial to take a base step back and be like, are these numbers being spit out? Do they make any sense? And if the answer is no, well, let's find out. Let's find out why. And I think you occasionally see people that come into the space and look at a financial model and think it's going to be amazing and don't necessarily have the ability to to know whether it's realistic operationally. I'm curious to talk a little bit more about another area of service you sometimes provide farmers that is also something that a lot of people talk about, at least in MySpace, which is the fundraising and supporting farmers that need access to capital.
00:30:57
Speaker
Could you talk a little bit about what you've seen emerge with the farmers you work with on that front? Yeah, absolutely. And so really, I mean, when I say finance to people and I don't explain any more than that, almost everybody assumes it means fundraising. That's kind of like the assumption across is like, oh, you raise capital for people. And when I first entered the space, I did none of that. I didn't have those relationships, but that has obviously become a ah part of our business and to kind of tie this back to the work that I originally did at at White Oak of like creating that value.
00:31:29
Speaker
or of that model that shows value for those kind of code benefits and tangible ecosystem services the banking system hasn't accepted it yet. However it doesn't mean there aren't financial institutions that are starting to see the world that way and i call my car like these new age regen financing companies here, stewards of the world, mad capitals, dirt capital, like all of these institutions that see the value. And each of them has their own slightly different lens that they look through, but they are able to come in and provide financing to these regenerative agricultural operations and farms where there wouldn't be financing from traditional banking systems.
00:32:09
Speaker
So maybe they're not underwriting exactly these holistic value models that we're talking about are, but they do see the value and they are willing to underwrite, which means evaluate a farm in a way that other banks just aren't. And that I see is continuing to grow. You're seeing more money come into this space and more of these companies and funds, Iroquois Valley, Madcap are getting more money to then invest in these farmers that are farming in these regenerative practice ways. so That has been a ah huge growth segment in the space since the time I've been there. and I see it moving forward because you have more and more people that want to make their money do good in the world versus you know just sitting in probably S and&P 500 ETF.
00:32:51
Speaker
So can you flesh that out a little bit? So say a farmer has two pieces of land that they're looking at. One is completely degraded and the other one is well managed, well stewarded, has good vegetation, good water holding capacity. and How might a an institution like steward or dirt capital look at that differently from let's say a more conventional bank? Yeah, absolutely. So one, the process is slightly different. Um, you're still going to have cashflow models that are showing that the business is viable. I think that that is the basis of, and it should be the basis of any kind of investment opportunity that expects to return is that you have to make sure that the business is viable. And so that's like a huge aspect, but secondly, this kind of new age region financing.
00:33:37
Speaker
You know they're they're putting in covenants you know they're putting in basically rules within the lending or investing that says like a farm has to practice these particular practices or at least operate in a way that is in line with their mission and they can default if they don't do that so you're actually holding these new regenerative or you're holding these are farmers to that standard that they're saying which is great because both sides need to be accountable. But when they do that, they're also then looking at the farmer's context. The traditional banking industry is, hey, we're going to lend you this money and you're going to pay us a monthly coupon every single month until it's paid off until the turn.
00:34:16
Speaker
these new you know regen finance companies, they're they're like, okay, well, we see what you're doing. We understand that the next six months, the next two years, the next whatever amount of timeframe, you're going to be going through some different things. And so we're going to structure this lease. We're going to structure this loan. We're going to structure this investment so that it best suits your business model as a type of investment that you need to have in this space to make it grow. Because once again, working with nature. Nature is not beholden to a monthly report or a quarterly report. And so we know things are going to flux. And so you're seeing these institutions adapt to that in order to advocate and support these farmers, which is awesome.
00:34:56
Speaker
So you're seeing more and more of these new age institutions that are basically working to support farmers by being flexible and understanding context and and believing in the story of the farmer. You also come from the very traditional corporate finance world, which is still where 99% of all capital is, the trillions of dollars. Do you think that having worked there, having been in that, that structurally that system that is huge and that still detains 99.9% of all the capital that they can adopt to financing truly regenerative farms, but obviously other things as well, but more place-based ecological ventures? That's a very complex and complicated question, and it's probably even more complex and complicated answer, but
00:35:47
Speaker
You have to kind of delve into where are the incentives in that business? And so ah you know these most of these institutions are publicly traded, which means they're beholden to quarterly earnings and they're legally set up to earn a profit. you know Whether they say that they're going to do that or not is is different, but they are legally set up and they have a fiduciary duty and requirement. To their shareholders and so the companies from that perspective are not set up to see or change or even if they want to enact policies that kind of support this type of of farming that being said. If the shareholders started to care more and more and more what you're seeing happen they can demand that of the companies because they're beholden to the shareholders so in the setup that they currently are in the environment that we're currently in.
00:36:39
Speaker
I don't see companies making that change to be able to kind of foster and support this type of agriculture or this type of thinking. However, they're owned by, you know, you and me in a lot of ways. And so as those that populous shifts and thinks more about sustainability, regeneration, all these other things, it is possible that they could eventually change. But I think true change is probably going to come from a more grassroots effort. And what do you think a more grassroots effort could look like? Yeah, well, I think it is kind of like your stewards, mad capitals, Iroquois Valley. I think there's plenty of space um for that space to grow and it's really going to be, I think,
00:37:17
Speaker
you know well You talk about in regenerative ag this huge land transfer that's going to happen over the next 10, 15, 20 years. With that, there's also a huge wealth transfer that is going to happen. And so where does that wealth end up? And then where that wealth does end up, what are those people's thoughts? What are their values? What are their beliefs? And so it's kind of weird to think about, but each generation has kind of a reset mechanism as as you age and and die and move to the next generation. And so it's like, what are the values that we're instilling? In our children and what will they instill in their children and you know we want. Change now today we want the world to be a better place today, but you have to realize the context is this blue rocks been around for a couple more years than all of us and so things take time and so how can you start adding to that value that you want to see in the world um as I think the biggest aspect and that's the longer term change.
00:38:10
Speaker
That's great. Cool. With that, I have a question for you. Getting into this a little bit more visionary and forward-looking, what would you say is the more beautiful world that you want to see and that you want to work towards? you know I think it's there's a fascinating statistic about how urbanization has increased over the last couple of decades and we have increasing population in cities and out of the country. and and I think that disconnect from the land is an opportunity. I'm an avid outdoorsman hiker climber type guy and and so when i take people outdoors into mountains into forests into what not you just see people's perspective change and you're not like wow this is so much better than david Attenborough on my couch on a friday night and so i think getting people back to the land is just such an incredible opportunity.
00:39:06
Speaker
Getting them outside getting them into community as well you know and so as i think about the longer term vision towards you know what is what is the better beautiful world look like i think it's getting people back outdoors cuz when you get outdoors you see the interconnectedness of it all and you realize that we're not just widgets you know where people that care and have a community and family and friends that we love and so moving towards a world where. people get to be more involved in that you know physical reality versus virtual as the world that I'd love to sponsor and and move towards. I love it. I love it. That's something that Emma and I have been talking about quite a bit in our conversations around this podcast, recognizing that there's multiple crises going on. There's a climate crisis, but then there's also like this human disconnection crisis and that we we're not made to
00:39:56
Speaker
be on Zoom all day long. We're not made to be in the front of a computer sitting at our desks all the time. We need to be involved with the land. We need to be involved in natural systems and food growing systems, and then also with each other and being in community. Because so many people today, I'd say, don't feel human. and aren't able to fully express who we were meant to be and be connected the way that we're supposed to be. And that's going to lead to a whole bunch of people who are frustrated and not able to live their lives fully. So we want to be having conversations just like this with folks who are figuring out how do we solve both of those things at the same time? How do we be farming better? How do we connect better as humans? And how do we live more fully the way that we're supposed to be?
00:40:41
Speaker
Absolutely. I'll sign up. You just show me where. Well, I think that's maybe a good place to end the podcast. Really appreciate this, Cole. Thank you so much. What you're doing is incredible. And I'm really excited to see where it goes. And thanks again. Thank you, Emma. Thank you, Austin. It's been it's been fun. Thank you, Cole. Have a good one. You too. Agrarian Futures is produced by Alexander Miller, who also wrote our theme song. If you enjoyed this episode, please like, subscribe, and leave us a comment on your podcast app of choice. As a new podcast, it's crucial for helping us reach more people. You can visit agrarianfuturespod.com to join our email list for a heads up on upcoming episodes and bonus content.