Stoel Rives | Deeply Rooted Podcast S2E4: Skye Root, Founder of Root Agricultural Advisory
Skye Root and Wade Foster discuss the integration of sustainability and technology in farming, exploring how Root Agricultural Advisory aids farmers in managing regulatory risks, enhancing farm value, and navigating the farmland investment market.
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In the latest episode of the Stoel Rives | Deeply Rooted Podcast, Skye Root, Founder of Root Agricultural Advisory, joined Wade Foster, an environmental and natural resource attorney for Stoel Rives LLP, to discuss how Skye's family roots in farming led him to create a company helping farmers navigate regulatory risks, embrace sustainability, integrate cutting edge agricultural technology, and his perspective on the current market for farmland investing. Skye shares insights including:
- Regulatory Risks for Farmers
- Integrating Sustainability and Technology to Increase a Farm’s Value
- The Future of the Farmland Market
Episode Recap
In the latest episode of the Stoel Rives | Deeply Rooted podcast, Skye Root, Founder of Root Agricultural Advisory, joined Wade Foster, an environmental and natural resource attorney for Stoel Rives LLP, to discuss how Skye's family roots in farming led him to create a company helping farmers navigate regulatory risks, embrace sustainability, integrate cutting edge agricultural technology, and his perspective on the current market for farmland investing.
From Family Farm to Helping the Agricultural Industry Navigate New Challenges
Growing up as the oldest of seven children on their family farm, the risk profile of what it means to be in production agriculture was ingrained in Skye at an early age. "We live in an ever-changing regulatory environment that is often hard to navigate. It's hard to manage the labor or the environmental issues, water issues, export, trade, there's just a litany of challenges that seem to be never-ending, but with those challenges, there's certainly plenty of opportunities that you can capitalize on," Skye said.
After leaving the family farm to work on Wall Street, Skye wanted to start a business to help farms, like his parent's, navigate complex industry regulations, implement sustainable farming practices, and maximize their value by implementing new technology.
Labor, Water, Emissions, Tax Policies: Reacting to Regulatory Risks for Farmers
With small and large farms having to manage a wide range of regulations, Skye shared his perspective on the most pressing issues, saying, “I think that some of the most shocking or toughest to navigate regulatory issues have been labor, and navigating the various nuances that have come up in the labor industry, particularly in permanent crops and dealing with apples and cherries.” Skye added that new regulatory categories are also increasing, “but then also, I didn't think 15 years ago that we'd be regulated on air emissions, for example,” Skye said.
These have made it difficult to react to for agricultural producers. Add in regulations on water and tax policies that change frequently, and Skye's team stays busy helping farmers. "When you're involved in a lot of the nuances of agriculture like I am, it's hard to manage the labor issues or the environmental issues, water issues, export, trade, those types of things, there's just a litany of challenges that seem to be never-ending, but with those challenges, there's certainly plenty of opportunities that you can capitalize on," Skye said.
Integrating Sustainability and Technology to Increase a Farm’s Value
Sustainable farming has become a broad term with many good and misunderstood associations for farmers. Skye's father was an early adopter of sustainable agriculture as a sizeable organic alfalfa grower, which Skye contributes to his passion for helping farmers integrate sustainability. "I have the advantage of having all of my upbringing years, which was 30 years ago, now being tied to organic production. And so that in some ways put me at almost a DNA level at the cutting edge of interest, if you will, on the sustainability ideas and movements," Skye said.
Acknowledging that 'sustainability' can be a loaded term for farmers, Skye's approach to defining it leads back to his family farm. "It's, hey, Dad, what do we need to do or what can we do differently than we're doing today to make sure that this resource is around for my grandkids?" Skye said, adding, " it starts from a conversation that it's much less of an indictment and much more about what can we do to come up with win-win strategies to help you keep making money and in some cases, make more money, and do a better job to steward the resources that you're responsible for." In practice, some methods Skye advises includes using less synthetic fertilizer or chemicals to deal with pests and weeds, and stimulating microbial action in the soil itself through a variety of different biological products. Even new sprinkler packages on the irrigation systems can help use 25% less water. Skye said, "it all costs money. But the cost-benefit, in most cases, is such that it's worth it to spend because you're going to make your money back in some cases almost immediately."
Integrating the newest agricultural technology can also help enhance sustainability. Skye recommends farmers take a data-first approach with the latest agricultural technology, "it can show that you're being more sustainable, that you're using less water and you're improving the soil with higher nutrient products from your farm, all of those things, I think, are enabled by an open mind and the technology that continues to be innovated and developed today," he said.
Sky believes data management is the future of increasing value for farmers and encourages them to invest in data technology. "I really do believe that as we evolve forward, you're going to win if you're the one that owns the data," Skye said.
The Future of the Farmland Market
Even with interest rates rising, Skye says farmland asset values are still appreciating and does not think we'll see a significant drop in prices. The interest in farmland remains strong, with Skye saying, "there are hundreds of institutional investors (still looking to acquire farmland) that haven't dried up. And so they're still pretty motivated. And then the local buyers are kind of what I call the local private market; it depends on who you are. So, if you didn't have an operating line (of credit) and were operating on your own money for the last 18 months, you've made a lot of money. And you may be aggressive as a buyer."
Skye's optimism connects to his family roots as a farmer in Eastern Oregon. He remains passionate about helping small and large farms continue to grow, saying, "I'm very excited about the future and the competitive advantage that we're going to have, not only as a country or as the American farmer, but as someone that's able to contribute to the real global needs that are going to exist."
Episode Transcription
Wade Foster
Welcome to the Stoel Rives Deeply Rooted podcast. I'm your host, Wade Foster, an environmental and natural resource attorney, and a member of the Stoel Rives Agribusiness, Food, Beverage and Timber Industry Group. This season we're interviewing respected industry leaders and discussing how they and their companies are embracing innovation and capitalizing on new opportunities to move their industries forward in an ever changing world. Subscribe at stoel.com. That’s S-T-O-E-L.com or wherever you listen to podcasts.
Greeting, listeners! Welcome to this episode of the Stoel Rives Deeply Rooted Podcast. I'm your host, Wade Foster. My guest today is Skye Root, founder of Root Agricultural Advisory, where he manages farmland portfolios throughout the Western US. In addition to real estate and finance, Skye and his team provide farm management and sustainability services. Skye is a native of Eastern Oregon and currently resides in Boise, ID with his wife and Root Agricultural Advisory co-founder, Becca, and their four children. In this episode, Skye and I will discuss his experience starting his business and some of the challenges and trends influencing agriculture. Skye, thanks so much for being here today.
Skye Root
Hey. Thanks, Wade. It's good to be with you. I appreciate the invite.
Wade Foster
It's great to have you with us. I know our listeners are looking forward to hearing from you. We both grew up in Eastern Oregon. You grew up on your family's organic alfalfa and cow calf operation outside of Burns, Oregon. When you grow up in Eastern Oregon on a farm or ranch, sometimes, as we both know, it can be difficult to leave Eastern Oregon. So to start us off, I'm curious what prompted you to move away from the family operation and how you found your way into finance and real estate.
Skye Root
I love this question. There's probably short, medium, and long versions to answer it. But the short version is that I was raised by amazing parents, you know, farmers and ranchers to their core. And I'm the oldest of seven children. I have six younger sisters. And I think when I was 18 years old, I just couldn't wait to get out of town. And then I've wrestled for the last 20 plus years since leaving about how do I get back? But yes, it it's hard to do much in where we grew up, unless you want to work for a few select opportunities. And I didn't want to work for my dad as much as I love him. So that's mostly what got me out.
Wade Foster
Fair, fair. I understand that very well. So what have been some of the challenges of launching your own business in the farm finance and management space?
Skye Root
There's a lot of risk in Terms of starting your business. I'm sure your listeners, depending on who they are, certainly understand that kind of stuff. And I would say one of the form of fundamental comments that I would make about starting my own business and in the world that I work in is we live in an ever-changing regulatory environment that is often hard to navigate. And so when you're involved in a lot of the nuances of agriculture like I am – and, you know, we can get into some of that, you know, the specificity of that – but it's hard to manage the labor issues or the environmental issues, water issues, export trade, those types of things. There's just a litany of challenges that seem to be never ending. But with those challenges are certainly plenty of opportunities that you can capitalize on and clearly we've been able to find success in the midst of uncertainty, and many do. But it's certainly not without risk and without some heartache and some blood, sweat and tears. But yeah, that's probably the best answer.
Wade Foster
Are there particular regulatory areas that you didn't anticipate when you got started that have come as a surprise?
Skye Root
You know, having grown up on a farm in production ag, driving tractors and feeding cows, dealing with regulatory issues at the dinner table, frankly. You know, hearing from my dad and mom and the other family members that were certainly involved in in the business, and just kind of internalizing those things and watching the ups and downs of commodity prices and issues there and weather events and the risks associated with that and just all those things it, I think it ingrained in me I guess an appreciation for the risk profile of what it means to be in production agriculture. So then as evolved through my career that involved, you know, degrees and economics and water law and finance and some time working as a water rights consultant and then onto a pension fund where I spent time acquiring farmland properties and ag private equity and some other things, as I evolved through my career over the last 15 years, it’s, I’d say that the skills that I've gained and the experience that I've gained along the way, while very important to my success and to my business’s success and my, I guess, even willingness and ability to start my own business, all of that pales in comparison to The ag DNA that I have. And it's just, it's hard to explain. It's not a prideful thing, but it's just when I'm out there on a farm or in a tough situation, you know, regulatory wise or whatever, because of how I grew up, all the kitchen table conversations, all the hours windshield hours in a tractor, that has helped me to be able to, I think, address some of the uncertainty that I've dealt with in in my career. So now to your specific question about regulatory risks that I didn't anticipate. So I, if I rely on the clock 15 years, and look at that steady state and then come to today where we sit today, I think that some of the most shocking or been toughest to navigate regulatory issues have been labor and navigating the various nuances that have come up in the labor industry, particularly in permanent crops and dealing with apple s and cherries. But then also, you know I didn’t think 15 years ago that we'd be regulated on air emissions, for example, or – I always knew, I grew up in a desert – so water, water issues and water regulatory pressure is not anything new to me and so that doesn't surprise me. But it's become more pronounced in the last 15 years as we've been in a pretty rough drought cycle in most of the western US. But anyways I'd say those are some of the bigger regulatory surprises. And then I ought to be careful to not open up Pandora's box, but, you know, tax policies, certainly the export with different, I guess, political regimes that might be in place over the last 15 years, how you handle, how you react as a producer and somebody like me that represents producers in a lot of unique ways, how you react to those kind of title changes are… it's been harder than I expected. We'll put it that way.
Wade Foster
Well, and we could probably have a podcast on each of the topics you just walk through and spend more than 15 minutes on any one of those topics. But we should probably keep ourselves moving forward, I guess. Let’s jump back and talk a little bit more about Root Agricultural Advisory. Let's talk about your business. So you've got three primary areas: real estate, farm management, sustainability. Can you just give us a little bit of overview of Root Agricultural Advisory and then tell us how you came to focus on those three areas and how they fit together?
Skye Root
Absolutely. Yeah, so my sound bite for people is that, you know, based on again my experience that I've described already and just general interest level and people that I've associated myself with, I felt competent in my ability to succeed in the farmland agricultural real estate game, you know, property management, farm management associated with farms, particularly larger farms and then doing sustainability, consulting and other types of consulting. And so when we stood the firm up almost five years ago that became our focus. And so we have all types of clientele in terms of… we focus pretty exclusively with a select institutional investor that we help them source deals on the real estate side. But on the sales side, I've done everything from distressed bankruptcy deals to, you know, Grandma passing away and the kids want to sell the farm, and dealing with both very small and very large operators throughout the western US. And that's the part that I enjoy and really love doing. And so from that core knowledge of real estate, real estate valuation and fundamental principles regarding farmland real estate, that has led us to be able to be successful in the farm management and sustainability consulting side where we, you know, help people manage their farm assets around the West and, you know, no different than a financial advisor would manage assets or a commercial property manager would manage assets for a high net worth family or just a farming family or an institutional investor. And so we get pretty involved in the day-to-day work there because that's our expertise and we understand how to navigate it and deal with vendors and negotiate leases and deal with the regulatory stuff that we've been talking about. So, and then in the last 10 years I would say this whole sustainability movement has become much more pronounced and I because of my upbringing, because of, you know, one of the things I guess I didn't underscore much is that, my dad is a large organic alfalfa grower and he's been doing that long before I would say that's was mainstream. And so I have the advantage of having all of my upbringing years, which you know is 30 years ago now, being tied to organic production. And so in some ways that put me almost a DNA level at the cutting edge of interest, if you will, on the sustainability ideas and movements. And so I like to consider the fact, for what it's worth, I think that… I want to be at the cutting edge of large scale agribusiness sustainability. And so we've done that in a variety of ways and not… some more known than others. But either way, it's something that we focus on and enjoy doing as a team.
Wade Foster
So let's just talk about sustainability since we're on the conversation. Sustainability can be a fairly loaded word, especially in the ag space when you're talking to growers. How would you define sustainability and what are you focusing on for your clients with regard to sustainability?
Skye Root
Yeah. So let's pretend I'm talking to my dad right now, who is a large producer, you know growing crops, livestock and farming. The language that I would use with my dad is, it's not the definitional ESG, you know, out of the textbook talking about, you know, some of the special interest groups, those types of folks. You know, that wouldn't be where I'd start with him. Where I’d start with my dad is… although it's the same story, right? It’s the same, at the end of the day, it’s really the same concept. But it’s, you know, hey, Dad, what do we need to do or what can we do differently than we're doing today to make sure that this resource is around for my grandkids. You know, and that's the right approach with the farmers that I'm familiar with, at least in the West, because… you know what… they really don't want to just mine – no offense to the word “mine” – but they don't want to just mine the resource, whether it's water, soil or livestock specifically right into the ground and do a poor job of managing it. I mean, my dad sent a great job of managing it, but he could make incremental improvements and does make incremental. Improvements. And I think it's just… it starts from a conversation but it’s much less of an indictment and much more about what can we do to come up with win-win strategies to help you keep making money, and in some cases make more money, and do a better job to steward the resources that you're responsible for, you know, the natural resources that he's responsible for that any given producer is. And that's where we start and that's frankly where we find success.
Wade Foster
So let's drill down on that a little bit more and I know you're managing a diverse portfolio for farm management and the different crops have different requirements. If you've got livestock involved, it gets even more complicated. But on a field level, what are some examples of sustainability measures you’d put into the field, I guess?
Skye Root
Yeah, that's a great question. So it, one of the high level ones that is becoming much more mainstream than it used to is figuring out how to responsibly manage the soil in a way that's not only affordable to the farmer, but also beneficial to the environment and to the overall ecosystem. So, you know, using less of this synthetic fertilizer or chemicals to deal with pests and weeds and all those types of things, and you know actually stimulating microbial action in the soil itself through a variety of different biological products or tillage practices or water application practices. All of those types of things to actually improve the situation. So what does it look like in practice? Put new sprinkler packages on the on the irrigation systems, spend the money, You'll use 25% less water. Put the variable frequency drive pumps on your… the irony is that it all costs money. But the cost benefit in most cases is such that the money is worth it to be spent because you're going to make your money back, in some cases almost immediately and in others within just a few years where you're going to use less power, you're going to use less water. You're going to get the same yields. In some cases you potentially get better yields by utilizing more proactive practices and getting away from the mindset, Wade, of this is how dad did it because that's how his dad did it because that's how his dad did it and getting much more to how should we do it? And actually asking the right question, and how can we make this more efficient. And then the other comment that I would make is how do we integrate agtech into this. And I have been involved… I have another business that's involved in ag investment banking and we do some capital raising for some ag tech firms. And there is so many unique, you know, soil probe monitors and irrigation system technologies and, you know, autonomous tractors and various commodity pickers. I won't be surprised 10 years from now if we get to a point where we have apples that are picked, you know they can be picked by a machine. And so utilizing some of that agtech and actually compiling the data and analyzing that data to show that you're being more sustainable and that you're using less water and you're improving the soils and you're coming out with higher nutrient products from your farm. All of those things I think are enabled by an open mind and the technology that continues to be innovative and developed today.
Wade Foster
So I don't want to open a whole different can of worms. But let's jump around and talk a little bit about ag data and data management since we kind of leaned into that part of the conversation. You know there's a lot of, as you mentioned, a lot of technology. Precision agriculture is advancing rapidly. And there's this question out there of who owns the data? Who manages the data? Do the farmers have the data? How are you seeing that conversation play out in your business?
Skye Root
Yeah. It's front and center in terms of conversation. I mean I'll show my cards. In my opinion, that I think that the farmer needs to own that data because that data is going to have value in the future. And by the way, not only just the farmer but also the food processor. Wherever you are in the supply chain and whatever value add you're doing to the agricultural commodity or piece of food or whatever it is that we're talking about, you need to own that data that’s relevant to the value add that you're contributing because I really do believe that as we evolve forward, you going to win if you're the one that owned the data. In the overall conversation, whether it's a regulatory conversation, whether it's an economic conversation in terms of value, I think either way, you want to control that data. But then the Catch-22 of that, though, is that the average age of the American farmer… I think I've shown my cards enough in terms of the respect level that I have for the American farmer. You know, I am one. I was raised by one. But I hate to break it to you. They are not good at data management. And I’m okay with any of them knowing that. There's a few corporate farmers out there that I've come across in my years of work that frankly impress me. Basically, everybody else doesn't really impress me when it comes to their ability to manage data at this type of scale. And so I think there's opportunities for firms not only like myself, but other consulting firms and other folks to be intermediaries in this process. So maybe they don't own the data, but they can help collect it, compile it, analyze it, recommend based on it. And so I think I do see an ecosystem of that happening. But you know, getting to a spot where some private equity firm or big CPG company or just a big tech firm owns all the data. That's scary to me. I don't think that's the right approach.
Wade Foster
I'm actually going to jump around a little bit more and take us back to where I thought we were going to start because we could talk ag data and precision ag and all of that for a long time. But let's talk about the real estate side of your business for a minute. Obviously you work with sophisticated clients. You help less sophisticated clients. Do you have some key principles when you're talking to clients about real estate or buying or selling or the financial decisions related to that that you use to guide the decision making process?
Skye Root
We do, yeah. So it's a… at a high level we have something that's called the due diligence checklist that really outlines all the things that we think there are most fundamental in purchasing or selling or leasing any sort of farmland asset or rangeland or… we don't work much in timber, but it would apply to any of the above. And it's interesting because I have the farming upbringing, but I have a pretty heavy finance background, you know, Wall Street related finance background, and so when you look at the stock market and analyzing stocks from a technical analysis standpoint, or a fundamental analysis standpoint, it's no different in farmland. And so we're … just the fundamental principles of farmland investing would be what are the soils? What's the water? What's the yield? What's the production capacity, heat units, climate. All of those types of things are the things that you're going to fundamentally analyze, and then you're going to get to the business side of, you know, who are the growers in this area? Who are the processors in this area? What do the economics look like in terms of my ability to generate revenue off of this farmland and what are the… and then overlaying the risks of fundamentally weather risk and then also some of those other things I just mentioned: soil risk, water risk, all those types of things. So that's the type of analysis that we do, that is probably a bit more analytical than like an average… because of my background and experience and the clients that I specifically deal with, we probably do that in a bit more of an analytical way than just your kind of run-of-the-mill real estate broker that might be out there working in the real estate space. But you know again it's just because that's who we are, and that's how we approach these conversations from a bit broader and larger scale perspective.
Wade Foster
Great. So it's… thinking about real estate and thinking about the markets, it's been a fairly wild couple of years in the in the markets lately or I guess the last couple of years. What effects are the markets and interest rates having on your clients’ decision making right now?
Skye Root
Yeah. So there's a lot of …we could spend a lot of time on this. But as a general comment, with interest rates going up, you know, farmland asset values are actually still propped up pretty high. We're not really seeing much of a drop yet, and may not frankly. We’ve seen big cap rate compression in the farmland space. But where I see them negatively affecting things are commodity prices have been phenomenal for about a year now in just about every single commodity that you can think of. But if we, you know, because of some geopolitical issues and other things that drive them to be such. But one blip in commodity prices with rates where they are now, when you think about things like operating lines, it's going to be a disaster to kind of deal through that. But what rising interest rates are doing fundamentally is there's not a whole lot of transactions. And so you have people that are not selling because they're very skittish about, you know, what's this all going to do? What's going to happen? People don't want to borrow money at 6% when we've had basically 15 years of free money with rates being so low. And so anyways, that dynamic is changing the volume of transactions more than anything else that I see so far.
Wade Foster
Are there certain types of investors that are still in the market or is it really frozen across the board… or not frozen but slowed down across the board?
Skye Root
Well, there are definitely people still in the market. There's hundreds of institutional investors that have whatever sort of retirement money or whatever funds they’ve gathered to invest in farmland, hundreds of them. And so that hasn't dried up. And so they're still pretty motivated. And then the local buyers are kind of what I call the private local market. It depends on who you are. So if you didn't have an operating line and you were operating on your own money, the last 18 months, you've made a lot of money. And so you may be aggressive as a as a buyer because there's some tax advantages potentially for you to go over-pay for a piece of farmland other than… you know, your choices are overpay for a piece of farmland or pay an incredible amount in taxes. Most farmers I know I know what choice they'll make. They're going to overpay for the farmland. So we're still seeing some of that that's happening.
Wade Foster
On the real estate side, you mentioned commodity prices. Are there other factors that are influencing… are there other factors that are influencing decision making right now?
Skye Root
Well, you know, some of the things we've already hit. There's various pockets of the West – you know, again, my sandbox – that are… have some pretty big regulatory uncertainty. What's the Colorado River going to do? What's the… you know, are they going to be breaching dams on the Snake River, which I sure hope not. Those types of conversations have people skittish and thinking about, “Okay, what's going to happen here?” And then roll it all the way back to Mother Nature herself and weather. Some of the droughts that have happened. And “My gosh, should we be really be buying farmland in this area?” Like it’s, you know, it’s 100 year average rainfall is 10. But for the last 15 it's been getting 3 inches of rain. And so, you know, is it a bad time to be buying in these areas? But I think some of those exogenous variables are hitting the decision making process right now, far beyond just what the market's doing and what interest rates are.
Wade Foster
It's hard to grow much with three inches of rain a year. If you don't have good irrigation water.
Skye Root
That's right. Yeah, you’ve got it.
Wade Foster
So let's jump back to the farm management side of your business. There's a lot of factors and different cropping decisions that influence management. Some are more important than others. Do you have any key factors that you're looking to when you're making management decisions? Obviously, bottom line’s important, what you can grow. Anything else?
Skye Root
Yeah, my answer to this question would be it depends on what specific commodity we're talking about. And there are general principles that I think apply that we've already touched on. But if I'm talking about an organic apple orchard in Wenatchee, Washington, that's a very different conversation than a lettuce farm in Imperial Valley of California in terms of the farm management decision drivers. They're just entirely different in terms of the needs and the issues and what have you. So I think the… maybe the fundamental principle is that you need to know your area and you need to know your farm specifically and, and what it needs in terms of optimizing its output, and not only present output, but also future and looking into the future. And when I think about something like an apple orchard in Wenatchee that's getting water out of the Columbia River as one of the first grabs out of the Columbia River in the US as it crosses the Canadian border, water is not a problem like not even remotely a problem. But labor is because virtually 100% of the labor force that's on that orchard is coming from H2A labor utilizing H2A government program and bringing in, you know, the visas and bringing people in from several Latin American countries, generally speaking. And so that… you know, that that we spend more airtime, a lot, more airtime in an orchard, you know, organic orchard in Wenatchee talking about those types of issues than we do anything related to water or soils or, you know, no till or strip till or any of those types of things. So hopefully that gives this question justice. But that's how I think about it.
Wade Foster
No, that's great. We talked about ag tech generally, precision ag, advances in ag. One question I didn't ask, but I'd be curious about… you talked about maybe apples being picked mechanically in the next 10 years. Are there other things on the horizon you're seeing coming that are exciting or interesting?
Skye Root
Oh, yeah. No, I’m … yes, I’m an ag tech junkie in some ways. So I think there’s a lot of pretty interesting things that are out there. It’s just which one is going to be able to scale, right? So these… and I'll tell you one of the biggest ones that is… t our earlier conversation about data is there's myriad companies out there right now that are talking about or are attempting to consolidate ag data from, you know, its myriad sources that you grab. And that to me is one that I am watching with great focus to see who's going to rise to the top in collecting the kind of data that is the most meaningful to someone like me. Because right now you got to go to about eight different places to get it and some of them are not that good.
Wade Foster
Are you seeing the data improve across the farming landscape, or is it still semi-isolated pockets? It seems like there's more and more uptake by the farming community of these different technologies.
Skye Root
Yep, it's improving. It's still got a long ways to go, but it's improving because I think that these different entrepreneurs that have risen these companies up in the in the space we're in now have done a really good job of educating. And I spend a lot of my time educating different growers and investors and folks about various forms of technology. So it… yeah, that's… and I'm excited about that. And I think that's good. So, and by the way, I mean I think that… you know, I think we're going to get… there's always going to be a need for decision makers, right? We're not like automating the agricultural industry. But the idea of a tractor being able to self drive on low emissions with, you know, some sort of a unique fuel source. I don't know that it's going to be electrical powered, but you know, whatever it might be, hydrogen or something you know. All of those things, those are exciting to me. Like that's… talk about a new frontier. When we think about globally feeding the planet and just population growth on a global scale and we think about the endowments that we have in the United States specifically with, you know, just the soils we do have and the water profile. We do have the climate we have, like all of those things. When you roll it up with some really innovative agtech, I'm very excited about the future and the competitive advantage that we are going to have not only is a country or as an American farmer, but just as someone that's able to contribute to the real global needs that are going to exist. Frankly, they already do exist, but that will continue to exist even more pronounced.
Wade Foster
So this is an oddball question. but just this conversation sparked in my memory. I judged FFA Oregon Future Farmers of America public speaking last year, and there were several speakers who talked about greenhouses and the roles that urban, even greenhouses play in getting food to inner city folks. And I know this isn't necessarily your space, but have you explored that at all or thought about it?
Skye Root
Oh, incredible amount. So in fact, on the investment banking side of another company, I'm actually transacting a big greenhouse right now. So we have very, you know, interested in that space and the sound bite that I would give on greenhouses are that they will play a very important role in feeding the world. But they can't produce the volume that's needed to feed the world. And so I am not one of those like all or nothing personalities when it comes to these types of… you know, solving these types of issues. I think it's they're probably far beyond my pay grade, if you want to know the honest truth, to try and solve world hunger. But in all seriousness, and I really am in this sandbox that probably have the eyes to see, but that green houses will play and they currently do play and will continue to play a really important role in a sustainable food supply chain, particularly as we look at climate change and how the world changes and over time and areas that were really good to grow XY or Z, vegetable or fruit may not be in 20 years from now. And I think without greenhouses and the ability to conserve water and the ability to manage some of those weather risks that exist, I think that the food supply chain could be at risk when you think about it at scale. So I am very supportive of indoor ag and what it can do for the overall system.
Wade Foster
Let's talk a little bit about the line of soil biological products you sell. Soil biology is important. It seems like biological products are relatively new in the marketplace. They're not necessarily always new technology, but their new products in the marketplace. What are they? What's the attraction to them?
Skye Root
No, you bet. At a fundamental level you're trying to… the role of a soil biological product is just to stimulate microbial action in the soil. That's all you're trying to do. You're just trying to get the ecosystem, the biology itself, to actually be productive and not be hydroponically farming where there's not, you know, not much role for soil if you. And so in that in that process there are so many ways you can do that, literally from as simple is just manure or something like that from a livestock operation to taking various strains of proteins and enzymes and acids and mixing those things together in an organic way or in a synthetic way, either one. My preference would be in an organic way and really just mixing that together to meet the needs that exist. I mean there's hundreds and hundreds of what I would call snake oil salesman out there in the ecosystem and that's OK. There always has been and there probably always will be. But the ag, you know… I’d say the average farmer is much more willing to listen now than they were 10, 15 years ago because it's been proven so many times, time and time again, how this really can add value, not only to the bottom line, but to the long term quality of the asset and so they listen. People listen a lot better than they used to.
Wade Foster
And it seems like they're… you've got a more mature market for some of these products, and you're starting to get the research to back them up…
Skye Root
That’s right.
Wade Foster
… or have the research developed to back them up.
Skye Root
And the other comment that I’d make, too, Wade, is that the… there's a lot of kind of live biological products. People would call him “bugs in a jug,” if you will. And, you know, the stars kind of have to align for those to really be their most efficient. The weather is too cold, the soil is too cold. If it's raining or if it's not raining or, you know, just about everything can go wrong with a live product. I personally you know. not only is it what I rep, but also what I'm a bit more passionate about is those that are more inorganic. So they're not live products and so it's not dependent on so many variables that a live product would be and if all the stars align on a live product, it's going to do miracles in the field. But all the stars have to align. And I'm more of the philosophy of let's have some marginal improvement. Let's unlock some of the nutrients that are tied up in the current soil. Let's open it up and let's not be so dependent on all the stars aligning in terms of having a perfect product for a perfect scenario, etc., etc. So I guess I'm a bit more of a generalist in the biological space than a specialist because I think that general focus is going to make the asset better over the long run.
Wade Foster
Well, that's another… again there's been about four pieces of this conversation I could spend several hours on. But I'm not going to for right now and we've covered a lot of ground. We've talked about a lot of different topics. But I'm curious. Did we miss anything that our listeners might be interested in? Is there something out there that you're thinking about that we haven’t talked about?
Skye Root
You know, I don't know. I don't think so. I mean I think… when I think about everything that I do day-to-day and how that overlays to the legal profession, other professions in the world we live in and then certainly to the down to the grower themselves, I think that, if I had an opinion, it would be that the more Everybody strives to understand the other person's world, the better the future looks for all of us. And I think that I feel like my career has progressed to a point where people are living in their own silos less and less, and I love that. It’s a much more open minded ecosystem than it was 15 years ago. So I think because of that, we're going to see… we all have to eat… You know, the food system is fundamental to survival and so when I think about farmland, farmland investing, farm management, sustainability, all the things that I deal with every day of the week, I'm just thankful that the ecosystem is continuing to evolve to a point where we're all in this together and it doesn't need to be so contentious, special interest groups. You know all those things still exist and it's frustrating at times. But the bottom line is I'm one that wants to get everybody at the table and think about what this thing is going to look like in 30 years from now, 50 years from now, and push in that direction rather than just grind my own axe for the decade that I get to and then move on.
Wade Foster
So to play off of that, what's next for you and for your business?
Skye Root
Well, we're growing. You know I think we'll keep doing what we're doing. We won't lose our focus and our principles in terms of what got us to the dance, if you will. But I think for us we're… you know, what's next for us is maybe a bit more of a pronounced focus on the whole value chain, as opposed to just farmland because the more you really get into this food space, the more you realize that the farmer is the one growing it, but so much of what they do is dictated by the end consumer and those that are CPG companies that are making the food, making the products that people buy, down to the wholesalers and retailers and food processors. There's just so many people in that overall supply chain that I see us, Root Ag Advisory, getting a bit more involved on the sustainability consulting side, and even on the transaction side of up-the-value chain stuff in in our world. And that's exciting. It's… in some ways it's… you know, it'll be a learning curve. But in other ways, I think that we can actually bring a really valuable perspective to the conversation because we get it at the ground level, no pun intended.
Wade Foster
Well, hey. Skye, thank you so much for taking the time to be with us today and for sharing your insight. This has been a great conversation. I really enjoyed it.
Skye Root
Well, thanks, Wade. This is awesome and you guys do good work. And. yeah, we appreciate the connection and opportunity.
Wade Foster
Thank you for listening to the Stoel Rives Deeply Rooted Podcast. To follow along and get additional insights from each episode, visit stoel.com. Please also take a moment to rate and subscribe to the podcast on Apple Spotify or wherever you listen to podcasts. The views expressed on this podcast or solely those of the individuals involved and may not reflect the views of Stoel Rives LLP. Participation in this podcast by any individual is not an endorsement of any view or opinion expressed. This is not legal advice and the podcast does not create an attorney-client relationship.
About Stoel Rives | Deeply Rooted Podcast
This season, our hosts are interviewing respected industry leaders and discussing how they, and their companies, are embracing innovation and capitalizing on new opportunities to move their industries forward in an ever-changing world. The first three episodes will be hosted by Claire Mitchell, Merissa Moeller and Kristin Russell of Stoel Rives’ agribusiness, food, beverage and timber industry group.
The views expressed in this podcast are solely those of the individuals involved and may not reflect the views of Stoel Rives LLP. Participation in this podcast by any individual is not an endorsement of any view or opinion expressed.
This is not legal advice and the podcast doesn't create an attorney-client relationship.