International Consulting OpportunitiesInterest in the Agriculture Space

Gary Thien AFM, ARAThien Farm Management, Inc.101 East Graham Ave.Council Bluffs, Iowa 51503

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Thesis of Investment Community• Amount of Arable Land per person continues to

decline each year• Population growth continues to increase food

demand• Urbanization and family income levels

– Creates more protein demand– More protein demand means increased feed

usage for livestock

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The Investors• Sovereign Wealth• Hedge Fund Companies• Public and Private Pension Funds• Family Offices

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Investment Strategies• Spreading Risks

– Weather– Political– Currency

• Types of Markets- Developed Countries

• United States• Canada• Australia

– Developing Countries• Brazil• Argentina• Eastern Europe

– Frontier Countries• FSU (Former Soviet

Union)• Africa

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Land or Operation• Land Play -- Own and Lease to Others

– Expect Lower Returns without Operational Risk• Operational Play -- Own and Operate

– Expect Higher Returns with more Risk• Mix of Land and Operational • Agriculture Infrastructure

– Processing– Rail– Storage

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Decision Making on Agricultural Assets• How much to invest - % of total portfolio in ag.• How much risk to take - • How to spread or mitigate the risk• Investment horizon• Exit Strategies

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Investment Offices• Large Staffs of investment analysts• Responsible for other people’s money• Global Knowledge• Extensive Financial Models

Issues • Investment Committee turn-around time

– Exclusivity may be granted – When working with farm sellers-time is of the

essence

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Scope of Investments• Generally substantial investments in terms of

money– $10 to $100 mm into a land fund or single asset– 5,000 to 200,000 hectares

• Sole Investor• Partner Investor – Stack in the Existing

Operation• Targeting Specific Enterprises

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Challenges in Global Investment• Land is a limited Resource• Management is an extremely limited Resource• Expats• Logistics• Political and Currency Risks• Commodity Markets• Multiple and integrated enterprises

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Investor Needs • Appraisal

– US and Globally• Management

– US and Globally• Direct Management• Employee Searches• Financial Accounting

• Consulting– US and Globally

• Reviewing “pitch” material

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Investor Needs-Agriculture Specific • Understanding

– Soils– Weather– Crops to be grown– Yields– Fertility and Chemical

needs– Direct and Indirect

Costs– Machinery inventory

and capabilities

– Storage– Employees and

capabilities– Systems and controls– Capital Improvement

needs– Organic and outside

growth– Budgeting

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Hazards of International Work• Language Barrier• Working in foreign currencies & weights/meas. • Logistics• Time• Visas

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…. Utilize a minimum and no till crop production system

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…Modern and efficient grain storage and conditioning

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…Modern Seeding Equipment

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Questions?• What is the current attitude for agricultural

investment?