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Sawyer Clark, Asset Manager joins Tim Hammerich to discuss Gold Lead's model for investing, hiring top talent, and utilizing the right technology along the way.
Tim Hammerich:
In 2017, a California farmer and agronomist teamed up with a Stanford MBA student to form Gold Leaf Farming. In six short years, the company has acquired 27 farms covering 12,000 acres, growing mostly almonds and pistachios.
Sawyer Clark:
Other large farm business groups I think are a little more pure real estate play. Gold Leaf takes the opposite approach. We want to farm for the long term, so we only want to get good at a couple crops and we want to then do the work ourselves rather than being a third party landlord.
Tim Hammerich:
That's Gold Leaf's Director of Asset Management, Sawyer Clark. Their approach to farming these acres themselves requires patient capital, top talent, and the ability to know when ag technology works and when it doesn't.
Sawyer Clark:
Especially with aerial imagery and some other stuff. We'll actually see that tree is more stress in this tree, but we don't have the tools to respond at a per tree level. Most of our tools are at a per block level, and a block might be 50, 100, 150 200 acres.
Tim Hammerich:
Today we'll explore Gold Leaf's business model, why they transition so much land to organic and how they look at talent and technology in farming.
Sawyer Clark:
What we're trying to do is find the best people, pay them way better than average, and then do hard things to create more food with fewer resources and to generate good returns for our investment partners.
Tim Hammerich:
Gold Leaf Farming's, Sawyer Clark on today's Future of Agriculture podcast.
Hello fellow ag nerd. Thank you so much for joining me for another episode of the Future of Agriculture. My name is Tim Hammerich, and every week you and I get to hear from the founders, farmers, innovators and investors, the people shaping the future of the ag industry. Now, before we dive in, I want to thank our quarterly presenting sponsor, which is a company that tells you what you don't want to know. Every three seconds, Farmwave's harvest vision system is counting your harvest losses off the header and from the combine and reporting them to you in the cab in real time. Make changes on the fly and watch your loss counts drop without having to stop or do manual harvest loss counts again. Models are currently available in corn and soybeans with several other crops in development for release soon. But don't take my word for it. Listen to an actual Farmwave customer.
Audio:
The system came to me about a week after we had started doing soybeans. I had about 300 acres already through the machine at this point, our combine, and we got into that field and started going and the system started showing you got loss out the back. The fan was set maybe just a little bit too fast. We went from non-irrigated beans to irrigated beans, so the yield was a little higher. I changed one millimeter on the sieve and slowed the fan down 50 RPMs. That immediately changed about four bushel back into the tank. And that small little change, it changed everything. I don't know how long I would've run in that field had I not had that and gone, "I need to make a change."
Tim Hammerich:
Join the ranks of farmers deploying harvest vision in their fields to ensure no bushel gets left behind. Put AI to work on your farm. Just visit Farmwave.io to chat with one of their experts or locate a dealer near you. Thank you so much to FarmWave for supporting farm innovation and the Future of Agriculture podcast. All right, now back to today's episode with Gold Leaf Farming's Sawyer Clark. Gold Leaf was founded back in 2017 by Brandon Ribeiro and Jack McCarthy. Sawyer met Jack while they were both in business school together at Stanford and he soon became part of the early team. In today's episode, Sawyer and I are going to talk about Gold Leaf's model for investing into farming and farmland their decision to specialize into just a few permanent crops, how they add value to their acquisitions, including transitioning to organic hiring top talent and embracing technology.
And we have a lengthy discussion about ag tech, specifically the types of technology that has worked and not worked for their operation. Sawyer describes himself as a farm kid from Oregon's Willamette Valley where his family continues to grow hazelnuts to this day. He spends his time at Gold Leaf split between acquiring new properties and leading operational initiatives with the farm team, especially those regarding the company's sustainability practices. Before joining Gold Leaf, Sawyer served as an intelligence officer in the US Army, bootstrapped and joined a couple of startups and completed a short stint in a family investment office. Sawyer received an MBA and a master's in environment and resources from Stanford. I'll drop into the conversation here where Sawyer is talking about his farm background in Oregon and what ultimately led him to joining Gold Leaf Farming.
Sawyer Clark:
The short background on me as a farm kid from Oregon growing up on a blueberry and hazelnut farm, and we did cattle, and goats and just kind of the traditional family farm up there and never thought I'd be farming again, but met the founders of Gold Leaf, Jack and Brandon, who as I was going through business school and thought, "Oh, maybe I should take a look at farming." And for the last five years then I've been part of Gold Leaf and I've been a part of the organization as we've grown from three farms when I started to 27 now. So been a lot of change over that time, but a good experience so far.
Tim Hammerich:
And what were you doing before business school?
Sawyer Clark:
Mostly I was an intelligence officer in the army. In undergrad I studied political science in Arabic and was going to go be a CIA or FBI kind of guy, be a spook. So I did army intelligence after college and after three years of that I fulfilled my commitment and then had the opportunity to intern with a family office in Seattle, Washington of all places. I didn't even know what a family office was. Turns out that's a family or an individual who has some financial resources that they want to manage personally as opposed to having a stock picker or somebody else do it. And so they basically just took a chance on me and gave me an opportunity to see how business goes a little bit through them. And then through that, went to business school and then met the founders of Gold Leaf three months into business school basically and have been all Gold Leaf since then.
Tim Hammerich:
I love it, and I think this is a great place too to introduce Gold Leaf Farming here. So I guess I would love to introduce it in this lens. When a group of MBAs say we want to go into farming and we want to do it our way, what is different about that? How does that look in practice?
Sawyer Clark:
Well, first of all, when a group of MBAs says they want to go into farming, they usually mean ag tech. So they don't actually mean ag, they mean they want to apply Google machine learning to an ag problem. And I think, maybe we'll get to some ag tech stuff in a little bit, but typically that's what that means. I remember being at business school talking about there's a food and ag club, and so a lot of the Food and Ag Club was a food club and there was five people in ag and three of them were doing ag tech. And there was two of us were like, "No, we actually want to operate farms and produce food." So it's pretty uncommon I think like the Gold Leaf approach. So Jack was the investor MBA and Brandon Ribeiro grew up farming, almonds, multi-generational, had farmed with other big investment groups before, had been a PCA for a while and pomology, did the almond track his whole life.
So they came together and said, "Hey, let's combine investing with almond operating and agronomy experience." And that's really what started the foundation of Gold Leaf. And then it was, "Okay, that's the start." So from the MBA perspective, the business perspective, it's what are the types of farms we want to own, including what crops. At the time, it started with almonds, we now farm pistachios and dates as well. So we do long hard looks at things like macro trends for consumption and supply. We do long hard looks at resource conservation and water use and organic or not. We do a lot of supply and demand stuff and I think most of the community that we interact with is our farmers and our neighbors, and that's because most of our company is farmers. Just for context, there's about 85 Gold Leaf full-time employees and probably 75 of them right now are harvesting almonds, pistachios, or dates. By far, most of our team is actually operating.
There's only a few of us that are management, accounting, HR, so we interact with the world mostly as farmers, but the farms we've selected, and the crops we've selected, and the areas that we want to farm in are the result of looking at supply and demand across the whole world, which crops, especially are developing countries eating more and more of, which crops are constrained by climate, water and soil. Which crops do we think we can learn how to farm well or we know how to farm well and then we go start farming them, or we'll go buy a small farm, or start trying to get smarter and smarter figure out is this something we want to do?
Whereas other large farm business groups, I think, are a little more pure real estate play or their thesis is we want to own American farmland in general and as long as we have a good tenant on it who can pay us rent, that's where we want to be. We basically want to be a landlord of farming assets. Gold Leaf takes the opposite approaches. We want to farm for the long term, so we only want to get good at a couple crops and we want to then do the work ourselves rather than being a third-party landlord.
Tim Hammerich:
And why is that last part important? Doing the work yourselves as opposed to there's lots of custom harvesters, custom everything out there, or like you said, the approach of just being a landlord, but you all really choose to create that farming core competency and what's the reason for that?
Sawyer Clark:
So we have some custom harvesters. There are some places where we just don't have enough acreage to make sense to have our own fleet of harvest equipment for example. That's pretty much the only thing we outsource. We will hire somebody to fly on a spray if we can't get in the field, but basically everything else we do ourselves and we do that because one of our values is to act like an owner and we say that we tell people we believe it and we've got to act like it. If we're acting like owners on our farms, that means when the alert goes off that it's going to frost at 3:00 AM on a Sunday, we want our team to hustle out there and to turn the irrigation on, not because if they don't, they get fired, but because they're invested in the farms and they take pride in it.
And if we were an absentee landlord, or a contract farmer, or we hired contract farmers, that expectation maybe, I'm sure there are some great custom farmers who would do that and who have that pride, but we don't have as much ability to respond quickly. And the other thing is we've got, like I said, 85-ish people. What we're trying to do is find the best people, pay them way better than average and then do hard things to create more food with fewer resources and to generate good returns for our investment partners. So that means we actually want, to fulfill that circle, we've got to be hiring, and training, and challenging, and motivating and all those things. It'd be hard to do hard things like organic conversions, or switching irrigation systems to be more efficient, or responding to frost if we've got to email somebody who's got a sales department who might get back to us quickly. So we really want to own that whole cycle so we can push the envelope.
Tim Hammerich:
And your model requires some pretty patient capital I would think, on the part of the investors. Are these your old colleagues and family offices, or who are the investors that are going to say, "Look, we see this long-term bet and we're willing to go on this journey with you"?
Sawyer Clark:
Yeah, mostly family offices, like you said, it's basically family offices, high net worth individuals and some pensions, endowments, etc. And that's exactly for what you just said. Our model is we're going to buy something that we believe in and we're going to farm it for 20 years and we're going to farm it with our people. We're going to try to increase efficiencies, we're going to add technology, we're going to apply various sustainability things like organic or cover crops or pollinator habitat, whatever. And we know that that will take many years to have a good payback. We're not in the business of flipping or planting orchards to sell them to the next guy or gal. So we need capital partners who understand that and who are interested as well. So our typical investor looks at us a lot like a multi-family housing deal. If they think of Gold Leaf as similar to owning an apartment complex in terms of the returns, it's a real estate asset that over the long term is cash flow generated.
So that's the partners we look for and that's the partners who are most excited about what we're doing. People who are more constrained by the fund cycle who want a five-year exit and return all capital, that's not really a hit what we're set up for, but the people who say I believe in this long-term thesis, I think what these guys are doing is exciting to me. Those are the investors who are most excited about what we're trying to build.
Tim Hammerich:
And I imagine with those investors, you've got to tell the story of your analysis on the demand side, which you already talked about supply and demand globally where developing countries buying these types of products for their foods, for their diets. But you also got to look at the supply side too, I would imagine on crops like these, especially almonds and pistachios, I know nothing about dates, but you can educate me, you're pretty much constrained to California and maybe a little bit of Arizona. Both states have big time water issues. California for sure has big time regulation risk as well. How are you doing that analysis to decide like, "Okay, this is a worthwhile investment, not just because of the demand, but because we can manage the risks on the supply side"?
Sawyer Clark:
Yeah, that's exactly right. My numbers may be a year or two old, but generally the world market of almonds, about 80, 85% of those come from California. For pistachios, it's something like 40%, so it's the biggest player, but pistachios are a little more fragmented than almonds, but almonds, the whole market is the central valley of California almost, plus some Australia plus some Spain and Portugal. A few other pockets and dates is a way, way smaller industry. Some in California, some Arizona, some Mexico, some Tunisia, Israel, Middle East, so those are a little more fragmented. But when we look at water, water is definitely a constraint. For all three of the crops I just mentioned, you need a special climate, generally described as Mediterranean, dates are a little more deserty, but generally you need a Mediterranean climate, you need decent soils. Pistachios can take a wider variety than almonds, but you need a loam like a healthy sandy loam, not too clayey soils, and you need water and all crops take water, so no surprise.
But water availability in the summer in a Mediterranean climate is a very small parts of the world that do that, and California is one of them, partially because of all the investment there has been for generations into the water system of California. So when we're looking at a farm in California or Arizona, we have to look very locally, because the headlines about California running out of water generally may be true, but it really varies even this side of the road versus that side of the road. And that's because of the legal boundaries, the aquifer subbasin boundaries and the water district boundaries that have been overlaid and built for hundreds years. What that means is you could have, I'm going to pick Fresno for example, just Fresno County, which is a big county, big food producing county in California. There are some parts of that county that have some of the best water in the state.
They have tremendous access to service water, which means they're not using much groundwater, which means the groundwater is healthy, the service water is available every year. It's very affordable, so you can grow a wide variety of crops. So generally it's a very good spot. Legally the water's there, sustainability wise, you're not sucking anything dry and it's a great, great place to farm for the long term, but if you walk a hundred feet and you're outside that district boundary in a different part of the same county situation could be very different. The farm across the street could have no access to service water, have wells that are in rough shape and paying a lot of money to pump those wells. And so we've got to look farm by farm and say, "Is this a farm where 20 years from now, we think it's going to have," what I term as, "physical, legal and ethical access to water." Now physical and legal are more easier to turn.
The ethical we've got to gut check ourselves on and say, that's really more of a question of, am I going to be proud to tell my kids that we farm this in 20 years and we've just got to look each other in the eye and we assuming the legal and physical pan out, that's a question that we've got to be comfortable with before we purchase a given farm.
Tim Hammerich:
Right, right. Yeah, no, I think it's cool to hear that that is part of the thought process, just because something is legal doesn't necessarily mean it's ethical and that you really have to, as you said, gut check yourselves on that, especially considering how you guys are pretty substantial in size. If I remember from talking to Brandon, you've been around since 2017 and are you, what, 12,000 acres now or where are you at currently?
Sawyer Clark:
Yep, 12,000 acres and that's about 50/50 almonds and pistachios. And then actually going back to crop selection, we have 33 acres of dates and so some people, guys like, "You have 12,000 acres and 33 of them are dates, what are you guys doing?" Well, that's a crop. We looked at the macro of the supply and demand said, "Hey, we don't know this crop yet, but I think it looks like it might be a good one for us, so let's try to get smart on it." So we bought a small date farm and have operated it for years and are slowly getting smart, learning a lot of things the hard way, but slowly getting smart. And then most of our pistachios are immature, so we've got about 4, maybe 6,000 acres of pistachios total and about 4,500 of those are about to produce. They're young, they're under six [inaudible 00:18:40]. So as far as in terms of harvest right now, we're harvesting a lot more almonds right now than pistachios.
Tim Hammerich:
That's cool. And I imagine, so you're working alongside these investors and we already talked about how patient that capital needs to be, especially considering something like almonds. It's not a secret that the economics of almonds have been in a bit of a rough patch the last few years, so they definitely have to be patient, but I imagine you guys are also thinking about how do we add value and from the outside looking in, I would guess it's probably one of two ways. It's probably in operations getting really, really efficient with operations. And then secondly, it's in some of the sustainability stuff you've talked about. And I understand you, you've looked at transitioning some acres to organic talk about that decision and what you're seeing there as far as going organic with mature orchards.
Sawyer Clark:
Yeah, you're exactly right, especially in almonds and it's been, I don't know if maybe entering our third year now of the worst almond price in 30 years. If you adjust for inflation, it's sustained at the lowest levels we've seen and in almonds we see that pricing cycle. Part of that is because it takes about five years for an almond tree to reach maturity. So when price is high, a bunch of people plant almonds and then those trees ramp up and there's an oversupply and so price comes down and then people get tired of almonds and they switch to other crops or they rip them out.
So we're in the bottom of one of those cycles and it's important to have patient capital when you're in a cycle like that. And that's actually one of the reasons that we don't want to do the build to sell model, is on the build to sell model, and by build I mean plant. If we plant and we're expected to sell in three or four years and that generates the return on the money that we invested, we're totally dependent on the value of that sale in year three or four and if the market's good or bad, that can really weigh in the outcome.
So we have the value of time we're farming for the average price over 20 years rather than hoping that in four years we'll hit a high spot in the market. But your question was on value add. So yeah, we've converted the majority of our mature almonds to organic, our dates we converted to organic after buying them also. We're converting organic pistachios also. Why do we do that? That goes back to the circle of find the best people pay, them way above average and do hard things to generate a better return.
So one of those doing hard things is converting to organic. Converting to organic in our crops especially almonds is tough. Almonds, a lot of pest pressure, mostly navel orangeworm. But the biggest challenge is the orchard floor management. So the weeds just get out of hand. If you have a Mediterranean climate and you irrigate it in the summer, like well, you're going to get a lot of weeds. And so we get a ton of weeds and almonds are harvested off the orchard floor, typically. You don't need to have a skating rink, but you need to have most of the orchard floor clean so that you can brush and sweep into a windrow, the almonds in. If you have too much [inaudible 00:21:48], or grass, or weeds, then nuts will get stuck and you won't get the harvest or you'll have so much material in your harvester that your processors will get mad at you.
So the big challenge we control, the second-biggest challenge is nutrition. So normal almond grower, pistachio grower takes soil samples and tissue samples in the spring and fall and says, "Oh, your trees are deficient on potassium and deficient on nitrogen." So you have your PCA, your crop advisor mix up a special blend and you put it in the irrigation lines and you give the trees exactly what they need and it's available to them and you've given them nutrients they need. In organic, there are some fertilizers you can use that that can be injected through the irrigation lines, but they're very expensive. So that's one option. The other option is compost, which is also very expensive. And then there's some smaller options of other organic matters, even like mushroom compost we've heard of or biocharged [inaudible 00:22:43] additives and things you can do, but all those things take time to break down and become available to the trees.
So when we shift to organic farming, we have to shift our nutrition program for the orchard to multi years and saying, "Hey, we're going to spread compost this year. We know only 30% of it is going to be available to the trees and the next year it's like 17%, and the following year another 9%, and it's this long tail of nutrition. So it's a multi-year investment to get the trees what they need. So really you go from sprint farming each spring of like, "Oh, pest? All right, spray." Or "Oh low on a certain fertilizer or nutrient? Bad fertilizer." "Oh bad weeds? Spray." You go from that, which is conventional farming to all right, we need to put compost out every winter and let it sink in slowly, and we're building this whole system. We need to stay on top of the weeds with mechanical weed control or with weed mats or with burners, because if they get big, we can't catch up and with pests we have to do mating disruption because we can't spray.
So there's all these things that become a long slow game versus a quick sprint and if you can do all that well, you get higher price per pound. So for almonds, organic almonds sell for 80 to a hundred percent more than conventional. So if there's a $2 conventional almond, it may be sell for $4, 4.15 a pound organic. So we do hard things. We think it's better for the environment, it's better for our team and hopefully we believe it'll be better for the bottom line also.
Tim Hammerich:
Well, yeah, I imagine with your guys' approach to farming in general, definitely looking at it in a data-driven way and from fresh eyes, you are coming into new ground for you all as far as taking over an orchard, you probably are able to look at technology from an open mind as well, especially when you're covering so many acres. Let's talk about technology for a little bit here. Maybe a good place to start is what type of technology do you embrace at Gold Leaf that maybe some of your neighbors might not be embracing yet?
Sawyer Clark:
Yeah, so a couple of the tech that works and maybe is embraced and the tech that we've like, "Oh, we wish it would work," or we haven't seen this solution for or is a nice idea but we couldn't get done. So we use a lot of soil and weather monitoring. I think that's pretty common. There's a ton of soil moisture monitors. We've tried a variety of them and have since standardized what we use there. For weather, we have both weather stations and then we also have some pheromone disruption, which is a pest protection, organic pest protection, which is also quite good that has weather stations on it. Weather monitoring is important and we use a lot of it. It's also relatively inexpensive compared to other things we do, but I wish I could tell you if we're going to have a frost in February in the northern end of the valley, that tech would be really valuable.
Last year most of the central Valley, north of Modesto, got hit with a crazy frost and it just wiped out walnuts and almonds and all sorts of stuff that were in bloom and it was so cold that there was nothing we could do. Even if you irrigated, you did all the right things, it was just too cold. So that's going to happen sometimes, but we don't really have a look ahead of that, so some long-term weather or believable climate stuff would be helpful. Right now we have precise but very short forecast that we can use. We use some aerial imagery that can be good to see if parts of the orchard are stressed or not with NDVI or I always mess up the acronym.
Tim Hammerich:
NDVI
Sawyer Clark:
NDVI, thank you. I get that and NVIDIA, the big graphics card company mixed up. So there's some companies that do that from satellites or planes, which can be useful. Those are a little delayed though, so if you're using it for irrigation management, which we do do, you get a weak look back and you get once a month or a handful of pictures a year. So it can be good to see over time what is changing. It's not really that we haven't found it to be useful for how am I going to irrigate this week? It's a little slower loop, but you could look at year-over-year progress in the orchard, so that's useful but not useful in the weekly. That's more useful in the monthly or the yearly. Things like flow meters are really useful for irrigation. The combination of soil moisture monitoring and actual flow meters either on your wells or your surface water connections can help you see if you have leaks, if they're not obvious, but also make sure that you're not using any more water than you need.
We talked a little bit about water diligence, but assuming that we're comfortable with the water on a farm and we acquire a farm and start farming it, then it's all about using as little water as possible to create as much food as possible. Both because we want to make sure the water's still there in 25 years, but also because the water is not cheap. Water is one of our biggest expenses everywhere, so from the business perspective aligns with the steward, the natural resources perspective there, and so we want to make sure that the trees are getting just what they need and not a tiny bit more. And so knowing what you're seeing from the soil and then what your pipes are showing in terms of flow is really important. Some of the things that don't work or we wish we had more of is, we mentioned this a little bit earlier, but is off-ground harvest for almonds. That's kind of coming.
I haven't dug too deep in that world. We've done some trials with some of the vendors that you can Google and find, and I think the machines are getting better and some of them are working. Some are essentially like pistachio harvesters just modified for almond. Some are a different set-up altogether, but my understanding is the backlog there is actually the drying process, because almonds have traditionally been dried in the field. You shake the tree, the nuts fall on the ground and then you wait until they're dry enough, then you pick them up and take them to the processor. So if you shake the almonds right into a bin like they do pistachios, you've got to dry that somewhere and the processor, the almond processors aren't yet set up to dry. In walnuts or hazelnuts or even pistachios, there's more drying infrastructure as a part of the processing, so that's more normal.
But almonds, the off-farm infrastructure is set up to not need to be dried. So I think the machinery is actually pretty good at the farmer level. It's just if we told a processor, "Hey, we're going to bring you 20 million pounds of undried almond," they'd be like, "Whoa, go put them on the airstrip for a week and then bring them in." Now you should have a processor on and see if I'm right about, I don't actually know, but I would come in from blueberries and now even hazelnuts are trying to get more and more off-ground harvest. I'm excited about that coming to almonds so we'll see if that comes.
Tim Hammerich:
What about other technology that either is not there yet or it just keeps getting talked about but not really working?
Sawyer Clark:
Yeah, I think that it's a bit of an umbrella, but we have lots of sensors and we have lots of precision data. What we don't have is the ability to act upon that precision data. The best example of that's irrigation. There are lots of soil moisture [inaudible 00:30:02], there's monitors you can put on the tree to see how much water the tree is pulling. All sorts of sensors we can put in the orchard to tell us literally down to the tree level if we wanted to. Like, "That tree needs more water. That tree is fine, that tree's stressed, that tree needs this," but our irrigation block will be a hundred acres or 200 acres. So even if I know what every tree needs, the decision I can make as a farmer or our farm manager, our foreman, our irrigators can make is turn on the whole block or don't turn on the whole block.
And for our conventional farms, most of our fertility, most of our fertilizer goes through the irrigation lines. So then you have the same problem there. So even if I had a sensor that told me this tree needs more potassium, this tree needs more nitrogen, this tree needs more zinc, I have the same decision of what is the blend I'm going to put in the whole irrigation block and then every tree is going to get it. There's ways for innovation there. I've joked before, like what we need is a big water truck that has a soda mixer on the back and as a drive by a tree, the tree tells it like, oh, it needs a little more of this and it's just spraying water and fertilizer and it can mix in real time.
Now maybe somebody's working on that, if you are, send me an email. But that's like a redesigning of our farms, because the irrigation that we're using was put in the ground 20 years ago, 30 years ago when the orchard was planted. And so that would be even more than off-ground harvest. That would be... If you told someone you're going to plant a farm, don't put any irrigation lines in the ground. We're going to irrigate with custom blends of fertility every time with this autonomous tractor that's going to be just dropping water on each tree. Like, "Okay, you try it first."
Tim Hammerich:
It's cool if it worked, but it seems pretty far-fetched at this point. Right?
Sawyer Clark:
Very much. And that's the straw man example to make the point that especially with aerial imagery and some other stuff, you will actually see like, "Oh, that tree is more stressed than this tree," but we don't have the tools to respond at a per-tree level. Most of our tools are at a per-block level, and a block might be 50, 100, 150, 200 acres.
Tim Hammerich:
Yeah. Well, I think let's talk about that in the context of yield prediction because I think some people would say, "Okay, what are all these yield prediction technologies doing, because who cares? I'm going to yield what I'm going to yield and I don't know why I need to know that," but I think it actually does have important ramifications of things you can do. So talk about that.
Sawyer Clark:
Well, a few minutes ago we talked about low almond price. So part of the reason there's low almond price is because in 2020 we had the biggest almond crop ever, and then the ports all got jammed and the world got locked down, and so it was just a perfect storm of oversupply and logistical backlogs that we're still working through. Since then, the almond crop has been smaller every year, and this year we don't know yet. There's lots of storms. There's a wet spring, no one knows yet, but it was probably going to be similar to last year or a little bit smaller. But each late spring and summer, the USDA and a few other groups makes a prediction of what they think the crop is going to be. That prediction influences the market price immediately for the crop, because if in June the USDA says, "Hey, big crops coming," all the buyers for almonds are going to say, all right guys, we know you have too much crop. We need a discount.
If the USDA and others say small crop is coming, some of the buyers might lean in because they want to make sure they get some to meet their demands for export or for candy bars or for whatever. That prediction is made by people going into orchards, and counting nuts, and looking at trees, and going up and down the state, and driving around and talking to farmers. But it's a prediction of like a per region yield that then rolls up to a total crop. But that prediction is made by humans and is pretty good, but is not, don't bet the farm on a yield prediction by any of those groups, because it's just really hard to do. So that's at the macro level why it matters.
On the farm by farm level, if I had data in right after bloom, let's say, so mid-March that hey, you've got 3000 pounds of crop, 3000 pounds per acre of crop coming versus 1500 pounds of crop coming. If you told me I had 3000 pounds and I could believe it, I would do every bloom spray. I would do every hole split spray. I'd do every May spray, I would keep the weeds down to methane, I would lean into irrigation. If my moisture monitors were saying lean in, I'd make sure that our harvest window was extra tight because I knew I want to protect this big crop.
On the other side of that, if you said, "Hey, you've got 1500 pounds coming," I'd have to take a deep look like, "Well, is the third or fourth bloom spray worth it?" Best case scenario, I'm getting 1500 pounds. That spray costs a hundred bucks an acre, I don't know. Or the trees are going to grow vegetatively this year a lot because they don't have that many nuts. Should we change our nutrient mix or just lean out because they're not using all the nutrients we gave them last year? So there's a lot of in the season changes we could make if we had a reliable yield prediction for later that year.
Tim Hammerich:
Yeah, it makes a lot of sense, especially with the cost of inputs being so high. It makes a ton of sense. Are you guys using those gust sprayers or anything like that? Or even, I guess maybe a better question is if you're organic, does it make sense to have a gut sprayer? Are there even orchard sprays that are organic that you would run through something like that?
Sawyer Clark:
Yes and yes. We do have a couple of gust sprayers. They are useful and organic. So the gust sprayers we have are the tree sprayers. I think they're working on a weed sprayer, but we have the tree sprayers and there are foliar sprays that we do in organic. They're like oils and vegetable oils, or they're oils for mites and some micronutrients for the trees. They're all organic certified. So we do even organic almonds or organic pistachios. We basically do the same number of tree sprays. It's just a different set of materials we can use. So we'll still do May sprays, we'll still do bloom sprays. We'll still do whole split sprays. We can't use all the conventional stuff that everyone uses. We have to go find similar chemicals or compounds, and of course they cost more, right? So that's part of the organic thing. But I think generally the autonomous vehicles, so includes Gus or Monarch or I think there are other technology providers who are working on basically add-ons to tractors that will drive them autonomously.
You don't need to buy a new tractor, you just need to give it a brain we'll head that way. And that's why we got some Gus's and that's why we're trying some of the other ones. And our data isn't perfect yet of like, "Here's what we're going to do." One of the things though that is coming clearer to me is that the things to automate are the things with lots of versatility or you need to use a lot. And that may be like, "Oh, great, good job, Sawyer genius statement, like the things you do all the time, automate." But what I mean by that is if you only disc your orchard once a year, don't get an autonomous disc, because the rest of the year it's going to sit there. So then it's like, "Okay, what are the things we do a lot?" And so in organic, we mow a lot.
We can't spray, so we mow a lot. So an autonomous mower, certainly organic is worth way more than an autonomous weed sprayer in organic, because we can't even use an attempt autonomous weed sprayer. So we're trying to figure out what are the tractor movements or the passes that make sense to automate and we do a lot. And what are those that either work for conventional, not organic or in our crops. We just don't have enough of those events in a given year to make that equipment worth it. There are other crops. One of the farm managers I get to work with spend a long time growing grapes and he'd spray 12 times a year in the summer or something like that, just an absurd amount.
And he can't believe how few of sprays he does now as an organic almond grower. So in a crop like that, you might want an autonomous sprayer, either weed sprayer or crop sprayer. So it's really, we'll continue to noodle on those things and figure out what's the right setup. We think there are savings to be had there, especially if we can hire A-plus people and have them run a couple autonomous machines versus having a lower skill requirement, but bigger groups of people. But we don't have that fully answered just yet.
Tim Hammerich:
Sawyer, thanks for this interview. Appreciate it.
Sawyer Clark:
Yeah, thanks Dan. It was a pleasure to be here. Hopefully some of that was interesting to somebody, but it's always fun to share what we're up to.
Tim Hammerich:
All right, well I definitely think that was interesting to a lot of people out there. I know it was interesting to me, so I hope you enjoyed that as much as I did. You can go learn more about what they're doing over at Gold Leaf Farming by just going to their website, which is goldleaf.ag. Of course, as always, I will put a link for that in the show notes to today's episode. I also want to thank Farmwave for being our quarterly presenting sponsor this quarter. Go learn more about them at farmwave.io. And last but certainly not least, thank you for your time and your attention. I never take it lightly. It means a whole bunch to me. I'll be back next week with another story of ag innovation.
