FARMCON Conversations

Today on FARMCON Conversations, Kevin and I spend a good part of the show on something producers are going to be talking about: NASS acknowledging a processing error in its September corn estimates for Kansas and Nebraska. The correction itself changed the national number only modestly, but the bigger conversation is about confidence, risk management and what a producer should do when information capable of moving markets can later turn out to be wrong. From there we get into the current corn, soybean and wheat setups, what the market still needs to see from demand, and why Kevin continues to believe a marketing plan has to leave room for uncertainty rather than depend on one USDA number being right. Outside the grain markets, we talk about collectibles and scarcity, how Kevin thinks about putting money into assets that have already appreciated, Bitcoin and where another wave of capital could come from, the competition between investments as rates remain attractive, and a broader conversation about wealth, lifestyle and why having more does not always mean enjoying more. MARKETS 36:00 — The NASS corn error is bigger than three-tenths of a bushel – Kevin and I dig into NASS acknowledging a processing error in its September corn estimates for Kansas and Nebraska. The mistake involved how irrigated and non-irrigated acreage was weighted and ultimately forced a correction to the national September yield. The bigger question is what producers should take from a confirmed error in data that can influence markets and real financial decisions. 42:00 — After the NASS correction, what actually matters for corn now? – Kevin separates the controversy around the corrected September data from the current market. USDA says its October national yield remains unchanged, so the focus shifts back to what the market itself is telling us through demand, basis, spreads and money flow. 48:00 — Big production means demand has to do more of the work – When production is strong, the burden increasingly shifts to exports, ethanol and feed demand. Kevin explains why simply growing a large crop does not automatically create a bullish opportunity later and what he needs to see before becoming more constructive. 56:00 — Soybeans still come back to China and Brazil – We discuss the soybean demand picture, Chinese buying and the competitive relationship between U.S. and Brazilian supplies. Kevin remains focused on actual evidence of additional demand rather than allowing the market to price too much hope into a possible headline. 61:00 — Wheat still has a proof problem – Geopolitical disruption can create a compelling bullish story, but Kevin continues to come back to the same problem: at some point the U.S. has to actually capture more business. Until the demand shows up, the story alone is not enough. BUSINESS + CAPITAL ALLOCATION 12:00 — Why Kevin increasingly prefers quality over quantity – Kevin talks through how his thinking around collectibles has evolved and why scarcity, quality and replacement difficulty matter more to him than simply accumulating more things. It becomes a broader lesson in how he evaluates assets. 18:00 — A great asset can still be a bad place for the next dollar – We get into something Kevin thinks about constantly: opportunity cost. An asset can still be scarce, desirable and valuable while no longer being the best use of new capital because the alternatives have improved. 28:00 — Your network changes the opportunities you can see – Kevin and I talk about how relationships with people operating in different businesses, industries and investment circles expose you to ideas that simply do not appear when you stay inside your normal lane. INVESTING 67:00 — Don’t keep adding money just because something has been winning – Kevin discusses gold and the temptation to chase an asset after a strong move. The investment may still be attractive, but price, position size and the alternatives competing for that next dollar still matter. 72:00 — Bitcoin: Kevin wants exposure without needing to make it an oversized bet – We discuss Bitcoin’s volatility and Kevin’s willingness to participate while still maintaining discipline around position sizing. Being interested in a major trend does not require betting the farm on it. 76:00 — Where does the next big wave of Bitcoin money come from? – Rather than debating whether existing Bitcoin believers remain bullish, we ask a different question: what would have to happen for another major pool of institutional or traditional capital to enter the market? 81:00 — Every investment is competing against the return you can get somewhere else – Interest rates change the hurdle. Stocks, farmland, real estate, commodities, crypto and collectibles do not exist in isolation; each one has to compete against increasingly attractive alternatives for capital. LIFE + SUCCESS 90:00 — Keeping up with the Joneses can become its own trap – Kevin and I finish with a broader conversation about wealth, possessions and lifestyle inflation. More money can quickly turn into more commitments, more things to maintain and more pressure. At some point the better question becomes not what else you can afford, but what actually improves your life.

Today on FARMCON Conversations, Kevin and I are joined by longtime FARMCON partner David Elser of UPL. David has a unique view across crop inputs, distribution, innovation and producer economics, and our conversation quickly moved beyond products into the bigger question of how agricultural businesses have to change when their customer’s economics change. We get into financial pressure across the farm economy, what separates companies that are still improving profitability, where consolidation could accelerate, how innovation has to earn the producer’s next dollar, and whether what we are experiencing is simply another cycle or something more structural. DAVID ELSER + UPL 46:45 — The producer is changing. What changes for everyone selling to him? – David discusses how tighter farm economics are changing purchasing behavior and why companies have to understand what producers are prioritizing differently rather than assuming yesterday’s value proposition will continue working. 50:00 — Where is the financial pressure really showing up? – We ask David what UPL is seeing across the customer base and where financial stress begins changing decisions on products, timing, purchasing and risk. 54:00 — How do you improve profitability when your customer is under pressure? – David explains the challenge of protecting margins and improving the business in a difficult agricultural environment rather than relying on stronger farm economics to lift everyone. 58:50 — Is another wave of agricultural consolidation coming? – We discuss whether tighter margins, higher capital costs and changing economics create another round of consolidation—and where David believes the pressure may show up first. 62:15 — Innovation now has a much higher hurdle to clear – The conversation turns to what producers increasingly expect from new technology. It is no longer enough for something to be interesting or innovative; companies have to demonstrate a measurable economic return that matters to the operation. 65:10 — The changing economics of agricultural distribution – David discusses the pressure sitting between manufacturers and producers, including inventory, working capital and the increasingly difficult economics of moving products through the traditional channel. 68:20 — Where are we still putting capital where the economics no longer justify it? – We get into crop-production spending and whether some investments in yield, technology and operating efficiency are still being made based on assumptions that deserve to be challenged. 71:55 — Is this another agricultural cycle—or are we watching something structural change? – We close by asking David which pressures eventually reverse with better farm economics and which changes may permanently alter how producers, suppliers and the broader crop-input industry operate. KEVIN + TODD 20:00 — Having conviction doesn’t mean making the biggest bet – Kevin explains why being bullish on an idea and deciding how much capital to put behind it are two different decisions. Position sizing still has to leave room for the possibility that your thesis is wrong. 25:45 — When should you admit the investment thesis changed? – We discuss the danger of becoming emotionally attached to why you originally bought something and the importance of recognizing when the facts underneath the investment have changed. 31:30 — Customers before scale – Kevin and I get into one of the biggest mistakes we continue to see in young businesses: spending heavily to build the company before proving that enough customers actually want what is being built. 37:10 — Growth can create its own financial problem – More customers, more employees, more inventory and more infrastructure can look like success while consuming enormous amounts of cash. Kevin explains why growth and a stronger business are not automatically the same thing. 41:45 — AI should eliminate work, not simply create another layer of it – We discuss where AI becomes genuinely valuable inside a business: removing friction, reducing repetitive work and increasing the output of good people rather than simply adding another technology expense. QUICK MARKET CHECK 2:15 — Corn – Kevin looks at what the physical market is telling him, where producer selling fits into the current setup and what would have to change before he becomes materially more bullish. 8:45 — Soybeans – We discuss the supportive demand story, why Kevin remains constructive longer term and how he thinks about adding exposure without getting too aggressive too quickly. 13:30 — Wheat – Kevin revisits the Black Sea situation and why a bullish fundamental story still has to eventually translate into actual demand and price confirmation before he is willing to press the trade.

Today on FARMCON Conversations, Kevin and I get into a question that may make some people uncomfortable: is straight farming, by itself, still a durable enough business model for most families? That conversation takes us into why Kevin believes free cash flow and additional revenue streams are becoming increasingly important, why a producer’s cost of production does not determine the global price of a commodity, and why some families may eventually have to make a much bigger decision about where and how they operate. We also cover the current corn and soybean setup, Kevin’s approach to avoiding major investing mistakes, what customers really want from service businesses, and why there is a huge difference between having ideas and actually getting the ball across the goal line. FARMCON + BUSINESS 8:45 — Is farming alone still enough? – Kevin explains why some of the strongest rural families he knows have built one, two or three additional businesses around the farm instead of depending entirely on production agriculture for profitability. His bigger point is that additional businesses can create the free cash flow needed to solve problems and stay aggressive when farming itself is struggling. 13:00 — What FARMCON was actually built to do – Kevin says FARMCON was never designed to teach people how to grow a better crop. The goal is to bring business ideas, business models, outside thinking and tools into rural America that can help families improve cash flow and build stronger businesses around the farm. 16:00 — Young people may have more opportunity in agriculture than they realize – Kevin argues that getting into agriculture does not have to mean starting with 1,000 acres and a full line of equipment. Land, trucks, equipment, relationships and agricultural knowledge can become the starting assets for entirely different revenue streams. MARKETS 22:00 — Corn: even if USDA lowers the yield, then what? – Kevin pushes back on the idea that a lower yield automatically creates a major bull story. Even with a meaningful yield reduction, he still sees ample supply and believes the market needs either a substantially stronger demand catalyst or a new production problem to materially change the outlook. 35:00 — Your cost of production does not set the price – Kevin says one of the most dangerous assumptions in commodity businesses is believing price “has” to rise simply because your own production costs are higher. U.S. corn, wheat and other commodities compete against producers around the world who may have cheaper land, labor and inputs. Wheat is becoming the warning sign of what happens when the U.S. loses cost competitiveness. 48:30 — “Pick change before change picks you” – Kevin argues that some families may ultimately have to reconsider where they farm, what they produce or whether they remain in the business at all. Somewhere in every family tree, somebody made a difficult decision to move, change or start over—and he believes another generation may eventually have to do the same. 52:00 — Soybeans – Kevin remains more constructive on beans than corn but wants either a deeper pullback or stronger upside confirmation before becoming aggressive. He believes the longer-term demand story may still provide another opportunity. INVESTING + DECISION MAKING 54:00 — Kevin is still comfortable holding cash – With returns above 5% available in relatively straightforward investments, Kevin sees little reason to force money into something where he does not believe he has an edge. His approach remains basic blocking and tackling rather than reaching for returns. 57:30 — Great investors don’t necessarily make better shots—they make smaller mistakes – Kevin compares investing with golf, pitching and poker. The real skill is avoiding the blowup: the lost ball, the five-run inning or the “second-best hand” that keeps you betting until the damage becomes enormous. BUSINESS 1:02:00 — Your customer may not want the cheapest option – Kevin uses his own frustrations with insurance to make a broader business point: sophisticated customers often care more about reducing friction, headaches and wasted time than saving the last few dollars. The job is understanding what your particular customer actually values. 1:07:00 — Ideas are easy. Can you get the ball across the goal line? – Kevin explains how he evaluates people who want to run projects or businesses. Plenty of people can start with a great idea, but very few can keep driving through setbacks, penalties and problems until something is actually completed.

Today on FARMCON Conversations, Kevin and I are joined by FARMCON partner Jake Espenmiller, President and CEO of Conterra Ag Capital. Jake sits in a unique seat where he can see what is happening across farm balance sheets, operating credit and institutional capital, and our conversation quickly moved to what happens when an operation can look extremely wealthy on paper but starts losing liquidity and financial optionality underneath. We also get into whether farmland has peaked, why some big buyers are backing away, what the strongest operators are doing differently, and how higher interest rates are changing the competition for every investment dollar. JAKE ESPENMILLER | CONTERRA AG CAPITAL 52:20 — Has farmland finally peaked? – Jake largely agrees with Kevin that farmland may have reached a point where continued appreciation becomes harder. He isn’t calling for a collapse, but low cash returns and a changing buyer pool are starting to alter the math. 55:20 — 70% equity and still running out of options – Jake shares examples of operators with 60%–70% equity on the balance sheet but almost no cash reserves and difficulty securing affordable operating credit. His bigger point: once liquidity disappears, so does your ability to solve the next problem. 1:01:15 — Be careful when the financial lifeline shows up – Kevin warns from personal experience that the capital available when you are desperate can sometimes become the final nail in the coffin. Jake says one of Conterra’s first questions in alternative credit is whether both parties understand exactly how the deal will eventually unwind. 1:04:15 — Agricultural capital has more competition – Jake explains why a Treasury yielding above 5% forces farmland and agricultural loans to compete much harder for investor dollars. Capital providers now have easier, more liquid alternatives available to them. 1:06:20 — What are the strongest operators doing differently? – Looking across Conterra’s portfolio, Jake sees stronger operators creating additional profit centers and optionality through livestock, grain storage, greater control over inputs and other forms of diversification. 1:15:30 — You can afford the neighboring farm. But should you buy it? – Jake says the better question may be what sacrifices you are willing to make if the investment doesn’t perform as expected. Kevin adds one of his favorite rules: never risk what you have and need for something you don’t have and don’t need. 1:25:00 — Kevin on the mistake he made with bankers before going broke – Kevin looks back at his housing-development years and admits he treated his banker almost like an opponent, trying to hide problems in order to keep borrowing. His advice now is exactly the opposite: get the lender behind the curtain early enough that there are still options available. KEVIN + TODD 2:15 — A handful of relationships can change your entire financial trajectory – Kevin shares a conversation with Jordan about how only four or five relationships may have materially changed the Van Trump family’s business and financial path—and why those relationships usually begin by putting yourself in the right rooms. 7:30 — When does cutting expenses start cutting off opportunity? – A startup deciding to conserve cash sparks a broader conversation about when cutting marketing, networking and customer access may actually accelerate the very problem a young business is trying to solve. 33:00 — Kevin starts putting cash back to work – After carrying roughly 40% cash, Kevin says he has started moving money back into equities, focusing heavily on large companies with strong balance sheets, free cash flow and the ability to fund the next stage of the AI buildout. 37:20 — Kevin is more negative on farmland than he has been in 20 years – After spending most of the past two decades bullish farmland, Kevin believes the growth in the buyer pool may finally be slowing. He isn’t predicting a crash, but questions whether the appreciation of the past can continue when capital has so many more places to go. 44:30 — Kevin on an investment thesis that stopped working – Kevin talks about high-end Kansas City condos and live/work properties that looked like great investments at one price but became much harder to sell as prices climbed and buyers suddenly had more alternatives. QUICK MARKET CHECK 17:00 — Corn – Kevin remains slightly bullish longer term but believes harvest pressure and uncertainty around production could offer a better entry before demand becomes the next meaningful catalyst. 23:00 — Soybeans – Kevin remains a longer-term bull but has stepped to the sidelines after getting whipsawed. Domestic crush remains supportive, while the market still needs fresh demand headlines to keep the bull story moving. 28:45 — Wheat – Black Sea disruption still hasn’t translated into the U.S. export demand bulls expected. Kevin believes wheat probably needs either a meaningful global weather problem or a major new buyer before the setup materially changes.

This week’s conversation centered on how the edge is changing. Kevin talks about why information alone matters less in an AI-driven world, where he believes advantage comes from now, how higher rates are changing capital allocation, and the frameworks he uses to evaluate businesses, investments and opportunities. 1:15 — What FARMCON is really trying to build – Kevin explains why FARMCON is increasingly focused on helping producers become better business owners, capital allocators and leaders. 3:20 — AI made information cheap. So where does the edge come from now? – Kevin believes information itself is becoming less of an advantage. The next edge comes from networks, experience, wisdom and knowing how to separate noise from what actually matters. 19:00 — Kevin on patience – After taking soybean puts off one day too early, Kevin talks about how patience has changed throughout his trading career and whether he is actually becoming less patient as he gets older. 22:30 — When does doing more become doing too much? – Kevin questions when successful people should stop constantly adding businesses, investments and projects and begin protecting more of what they have already built. 27:45 — When is enough enough? – Kevin discusses the challenge of knowing when to stop chasing the next opportunity and redirect more energy toward family, community and helping others. 39:30 — Diesel: the next break may be the opportunity – Energy traders Kevin trusts believe diesel could experience a meaningful pullback before potentially moving sharply higher again into winter and spring. 42:30 — Don’t try to pick the bottom – Kevin explains why he would consider gradually locking in fuel on a major pullback rather than trying to perfectly time the low. 46:00 — Are the economic measurements getting old? – Kevin questions whether traditional economic data adequately captures how dramatically spending patterns have changed across generations. 54:30 — The $100,000 General Lee vs. a Treasury bond – Kevin compares buying a collectible Dodge Charger with putting the same money into a relatively low-risk investment and explains why higher interest rates change the hurdle rate for every other investment. 56:30 — Everybody is competing for the same investment dollar – Stocks, real estate, collectibles, crypto, private investments and other assets now have to compete with increasingly attractive returns available in safer investments. 1:00:00 — Has investing become another form of gambling? – Kevin talks about sports betting, day trading, collectibles and leveraged investing and his concern that delayed gratification is disappearing. 1:03:30 — Why ag-tech capital has changed dramatically – Investors have been burned, capital is no longer free and ag-tech companies now have to clear a much higher bar to attract investment. 1:06:00 — Kevin would rather back a bootstrapper – Kevin explains why he increasingly favors founders who use their own money, work directly with customers and prove the business before aggressively raising outside capital. 1:08:30 — Solve a real problem – Kevin argues that companies should solve problems producers already have rather than inventing problems simply because they have a technology or product to sell. 1:10:30 — The first thing every business needs isn’t money – Kevin says the first thing a business needs is customers. Before more capital or employees, prove that real people want the product and will pay for it. 1:12:30 — The Ted Williams approach to investing – Kevin explains why he now waits for investment opportunities that fit his experience, temperament and strengths instead of swinging at every good story. 1:17:00 — Kevin’s quick business matrix – Kevin explains how he quickly evaluates whether a business is commoditized or unique, its pricing power, customer acquisition costs, target customer and ability to retain business. 1:20:30 — You cannot learn greatness by reading about it – Kevin says young entrepreneurs need to move fast, make mistakes, learn from them and get back after it. Experience comes from doing. QUICK MARKET CHECK 8:00 — Corn – Kevin sees relatively little remaining production surprise and believes demand now has to provide the next meaningful catalyst. 15:30 — Soybeans – China did not provide the additional demand catalyst bulls were hoping for, and Kevin remains interested in owning beans on a deeper pullback. 32:30 — Wheat – Black Sea disruption still has not translated into the U.S. export demand many expected, making major rallies opportunities to consider extending producer pricing farther out.