The GuidePost: December 2024
What does the next Trump Administration mean for regenerative agriculture?
Market Signals
$5.34 vs. $27.36: There are hidden environmental costs in our food. For example, the retail price of a pound of beef (from a Concentrated Animal Feeding Operation, not regenerative agriculture) in the U.S. is $5.34, but its true cost, after factoring in the cost to the environment, is 5x higher.
$500 billion: Agricultural lenders provide over $500 billion in financing to U.S. farmers, ranchers, and supporting businesses each year.
15% increase in deal value: According to recent PitchBook data, Agtech in Q3 2024 saw $1.6 billion invested across 159 deals, a 15% increase versus Q2 in deal value. Deal volume was down, continuing the recent trend of a “shift toward larger, more strategic investments in the sector.”
What does the next Trump Administration mean for regenerative agriculture?
What does the next Trump Administration mean for regenerative agriculture, and the food & agriculture space more broadly?
It’s too early to tell, and there’s been plenty of speculation about what’s ahead in our industry, but there are reasons to be optimistic.
The message is expanding: For us, regenerative agriculture has never just been about climate change and biodiversity collapse. Its value also rests in transforming the food system, using food as medicine, and better farmer livelihoods. Now with a new Trump Administration, this expanded message is beginning to take hold. Yes, regenerative agriculture offers proven ways to enhance our soil and sequester carbon, making it a powerful tool to improve the health of our planet. But it is also a powerful tool to reimagine our food system and grow food that doesn’t make us sick. At scale, it has the potential to make America healthy again.
The messengers are new and different: A new message around making America healthy again—championed by messengers like Robert Kennedy Jr., Donald Trump, Calley Means, and Dr. Mark Hyman—has the potential to resonate more widely. Kennedy and Means have been ambassadors of regenerative agriculture for some time, and with Kennedy as Trump’s pick for the Secretary of Health & Human Services, this message is already beginning to appeal to a broader and more diverse audience that spans political affiliation and rural/urban divide. In an example of how bipartisan—or nonpartisan—the message of regenerative agriculture is, Dr. Hyman went on Tucker Carlson’s podcast to talk about regenerative agriculture, food as medicine, and Wendell Berry. This could be a “Nixon Goes to China” moment for regenerative agriculture, where a breakthrough is possible because the unlikelihood of new messengers championing an unexpected message gives greater credibility and visibility to the cause.
A new message plus new messengers could expand the Overton Window: When everyone from small-scale farmers in the midwest to liberals in coastal cities to Joe Rogan diehard listeners is talking about transforming the U.S. food system, using food as medicine, and getting Big Ag and Big Pharma out of the Farm Bill, the Overton Window—or the range of policies and ideas that are considered politically acceptable by the mainstream population—has shifted in ways that could lead to new opportunities. The lesson here is to remain steadfast in a commitment to a north star (in our case, regenerative agriculture), but be open-minded about how the message and messenger can get us there.
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A new administration that focuses on improving government efficiency and eliminating Big Food and Big Ag subsidies could lead to benefits all along the spectrum of human health to planetary health. Of course, all of this is still speculation and there are plenty of risks. But if the playing field does shift as the messages and messengers change, we believe Calley Means could be right when he said, “The next four years can go down in history books as the start of a golden age for American farming.”
Founder Fundamentals
The W Framework for strategic planning. Planning for the year ahead can be one of the most challenging tasks of a leader. But few things are as important as aligning your team: forward momentum is the result of alignment, and alignment is the result of excellent strategic planning. In an article in First Round Review, leaders at Eventbrite and Airbnb outlined a framework for teams to use when conducting strategic planning processes: The W Framework. It involves four steps: 1) Leadership shares a high-level strategy with Teams, 2) Teams respond with proposed plans back to Leadership, 3) Leadership integrates into a single plan, and shares with Teams, and 4) Teams make final tweaks, confirm buy-in, and get rolling. For more, read (or listen) the full article in First Round Review. (23 minute read-time)
Portfolio Updates
Avalo was featured in an article on CNN. Avalo uses machine learning models to accelerate the creation of new and resilient crop varieties by up to 70%.
Global AgInvesting News interviewed Trailhead’s Managing Partner Pete Oberle on the state of regenerative agriculture and what’s ahead for the firm.
Andrew Keesee, Trailhead’s Vice President of Investor Relations & Fund Operations, wrote an op-ed in GreenMoney Journal about Trailhead’s progress to date and what’s next.
Emma Fuller, Co-founder of Fractal, was interviewed on the Soil Upside podcast: The Business of Soil Health: Financing Regenerative Agriculture.
An article on the Rockefeller Foundation website featured Mad Capital as an example of new models of financing for regenerative agriculture and organic practices.
What We’re Reading
The farmland & Agtech investment landscape. An op-ed by Sarah Nolet, the GP at Tenacious Ventures, broke down the tech-enabled farmland investment landscape and explored opportunities for investment. LinkedIn.
The regenerative agriculture revolution starts with women. A new book, From the Ground Up, focuses on the efforts of women driving food and agricultural change in the U.S. Agricultural Dive.
Healthy soil is a great business. Nicole Shanahan, Robert Kennedy’s running mate for his 2024 Presidential campaign, interviewed Phil Taylor and Brandon Welch from Mad Agriculture on why the greatest American comeback lies in restoring the lifespan and vitality of agricultural soil. X.
The hidden benefits of regenerative agriculture. Beyond addressing climate challenges, regenerative agriculture has four main benefits that are often overlooked: 1) Soil health, 2) Water quality & conservation, 3) Biodiversity, and 4) Farm productivity & profitability. Agricultural Dive.
A first-principles based primer on the U.S. food system. We liked this in-depth analysis by Martin Reiter of the U.S. Food system and the relationship between agriculture, nutrition, and health. “Agriculture’s logical aim should be to feed us well, promoting our health, happiness and productivity, and do so in perpetuity.” Medium.