Hi from the air between NJ and SF,
I’m en route to World Agritech, along with everyone else in agtech. I look forward to catching up with friends and colleagues and meeting new folks!
I’m a bit behind in publication, not because of a lack of news, but because there’s too much news to process.. That’s still a problem, and realistically, its going to keep being a problem, so long as the Trump adminstoration maintains the dynamic leadership style they’re rocking right now. I’m going to try to cherry pick things that the average agtech reader might be missing or not paying attention to, especially as relates to ag labor. The alternative option to this approach is “make it longer.” Reply directly if that’s what you want, else I will assume your inbox/substack pile is overflowing as mine and try to keep it concise-ish.
David Keeling nominated to lead OSHA
TL;DR: David Keeeling, formerly VP Global Health & Safety at UPS and Senior Director of Safety Compliance at Amazon, has been nominated as the new Assistant Secretary of Labor for OSHA, replacing Douglas L. Parker.
Why it matters: This Western Growers Association News post (now >2 weeks old) does a great job of concisely articulating policy predictions, presuming David Keeling gets confirmed. Keeling is an industry guy (formerlyAmazon, UPS), and all signs point to him being deregulatory. There are two notable consequences that I want to flag here:
1) Federal deregulation relating to worker protections will result in further deregulation in some states (ex/ Missouri) but will result in steeper regulation in other states (ex/ California.) This seems unlikedly to give the producers who are feeling the most pain the desired break on regulatory costs.
2) “The current push for a nationwide heat safety standard will likely be paused or significantly revised, with the agency focusing on OSHA’s current “Water.Rest.Shade” program enforced through the General Duty Clause.” - This is a big bummer. Farmworkers have amongst the highest mortality rates of any US workers, and more farmworkers die of heat-related illness than any other cause. Climate change is only exacerbating this problem. I recently put together a NSF R2I2 grant proposal with my friends at Equitable Food Initiative and UC ANR on Community-Based Heat Adaptation Solutions for California Farmers and Farmworkers. (Slim chance that the grant gets funded; even in the event that the program is still alive, we used the words “inclusive,” “diverse,” “climate change,” and “equity” because those things matter in designing agtech solutions and conduction agricultural research.)
In any event, this heat adaptation space is massively underinvested in from a global research, policy, and technology perspective. The economic ramifications of climate change on labor exceed those of climate change on crop yield, and it is imperative that we invest proactively in better understanding and developing solutiosn to this problem before it becomes a crisis. And again, to point 1, CalOSHA and other states like OR, WA, NY, CO are going to put their own regulations in place, creating a patchwork of policies and failing to ease the burden of compliance for growers.TL;DR: Small farmers have very limited tools in their agtech toolkit.
Why it matters: I’ve been having various versions of this conversion a lot over the past few months. This article does a decent job of articulting the problems that small American farmers face in sourcing and paying for appropriate equipement and technologies for their operations. It’s a real problem for small farmers, and it’s a difficult one to solve.
The market reality is stark - there are 1,900,487 farms in the US as of the 2022 Ag Census, and only 234,592 of those are <10 acres (1-9 acres.)* There’s nuance here in what we’re talking about. The USDA farm census historically classifies small farms by revenues, and, unsurprisingly, by that definition, small farms have lower revenues and lower gross profits than medium or large farms. There really aren’t that many small farms in the US. Let’s say you capture 10% of that market and sell a $1k/year software tool - great, you’ve got ~$23M annual revenues. You have strict limits on pricing put in place by customers with limits on their own top line and pressures driving up their costs. This type of product might feed an interesting regional business, but it’s definitely not going to turn into a unicorn company with US small farms as the target customer base. It’s just not realistic. That’s not to say that profitable, tech-enabled businesses providing solutions for America’s small farms can’t exist - they can and I believe that they must be built. But, those companies have to be financed in different ways and have to have different expections from the usual VC model.One Does Not Simply "Grow Vegetables"
TL;DR: Specialty crops are hard to grow and specialty crop markets are difficult to create.
Why it matters: I know it feels like I’m giving Sarah Mock a lot of airtime, but I just had to include this. Here’s why - part of my insane-crazy-long-term vision for the future of agriculture is the idea that we can build regional specialty crop economies in places where they don’t currently exist.
I live in St. Louis, Missouri, and I’m surrounded for 100’s of miles in all directions by agricultural production, but barely any of it feeds me. I’ve lived in Willamette Valley, Oregon, where I grew food (blueberries and hazelnuts) and got to see interesting trucks full of differnt types of fruits and vegetables and I got to buy regionally produced, inexepensive produce at WinCo and Walmart. If I go a mile north of my neighborhood in St. Louis, there’s no fresh produce at the Dollar General that serves as the local grocery.* (*This is finally improving; there are more Save A Lots in North City than there used to be when I moved to STL in 2016, and those usually have a decent selection of produce. Still, it’s essentially all trucked in from the West coast or imported.)
I worked at AgLaunch when the WWF team was beginnning their work on “The Next California” and I would love nothing more than to bring tomato production back to Tennessee, or specialty rice to the Delta (pro tip, order Two Brooks Rice - the sable especially is 🤌.) One of the major barriers to doing that is lack-of-workforce. I started Farmhand in 2022 to begin to create alternative solutions to the false solution of “labor is cheaper here because we don’t have living wages like they do in California.” Even if you don’t care about farmworkers being able to live dignified lives, workers will chase better conditions and higher pay, period. In her essay, Sarah just scratches the surface of the need for workers for food processing. We need workers in fields, too, and we need to make it easier to grow specialty crops better. But, that’s a really tricky thing to do because we simply do not have the same immigrant workforce with the skills and will to do this work in large pockets of the country. Populations have settled where existingThe Weight of 150 Years: A Family Legacy at Risk
TL;DR: Schoffner Farms closed its gates this week after 150 years of family farming. Expect to keep hearing from Hallie, though. She’s
Why it matters: Hallie did pretty much everything right. I’ve been to her farm. I’ve talked to her team (H-2A employees and family members, alike.) Hers is one of the most interesting rice production operations I’ve ever been on, because she grows specialty varietals for seeds. I’m sad that the world lost this farm. The solutions oriented part of me is super keen to better understand exactly where things went wrong, and I suspect that Hallie will shed more light on this in the future to better advocate for protections and solutions for other shmedium farms.
Collaborative Solutions for Agtech Growth
Summary for those of you who missed it:
Rob Hulme of AusAgritech and I led a workshop (with a ton of help in planning and organizing from Meg Lovegrove, as well as Renee and Cole on the Evoke team!) meant to force attendees to consider the implications of different types of capital. Rob shared a summary of the AusAgritech’s 2023 Australian Agritech Report. Australia’s ecosystem is particularly interested because a high percentage of startups are bootstrapped, and even those that raise venture don’t raise very much capital. The scarcity of venture enables startups to think differently and more creatively, and it forces them to find profitable product market fit or go out of business. There’s still a shortage of VC in the market, creating an opportunity for the market to develop in a healthier way than its developed here in the US.
This is the second time I’ve hosted a version of this workshop, and probably not the last. As Walt Duflock recently posted “We (the collective AgTech ecosystem) need to figure out new and creative capital sources that do not involve the four capital sources [agrifoodtech VCs, corporate VCs, government grants, private equity] mentioned above. I welcome thoughts and feedback.” I will continue to beat the drum for redeemable equity as a better aligned tool for agricultural producers and aligned parties to invest in technology (previously covered here), and I encourage agtech players to think critically about the ramifications of different types of capital on their companies.
Have a great week,
Connie