A conversation with Justin Bruch, Cofounder-President & CEO of Clear Frontier, born and raised 5th generation Iowa farmer.  He has actively farmed on 4 continents and has spent his entire career working in agriculture across North America (USA/Canada), South America, Europe, and Africa.  

Organic makes more money. This is a financial decision first. This doesn’t mean the whole world should go organic tomorrow. It’s refreshing, right, to hear somebody say that out loud. Of course, it’s context-specific: we’re talking about the Midwest in the US, corn, soy, and specialty crops. But a fund that has been operating for the last six years clearly shows it makes more financial sense to farm organically. Not saying it’s easy, you have a lot of things to manage: crop rotation, pest management, weed pressure, manure, and all of that. But it does make more money.

So now the question becomes: how do we get more farms and farmers to transition? What are the financial models? What are the investment models to unlock this transition at scale? Not too fast—organic scale obviously, but still at scale.
That’s what we discuss today with one of the leaders in the space.

ORGANIC, WHEN DONE WELL, MAKES MORE MONEY

Justin argues that the economic model of organic farming, despite its challenges, is financially superior to conventional farming. He bases this on the higher premiums for organic crops and the potential for lower input costs, making it a compelling business decision.

“Ultimately, at the end of the day, I believe the economics are better to farm organically and do that. And then you get all the subset benefits that come off of it. So, is it a chain reaction? In my opinion, it is a chain reaction.” Justin Bruch

IT’S NOT EASY; IT’S NOT FOR EVERYONE, BUT IN CERTAIN CONTEXTS ORGANIC MAKES A LOT OF SENSE.

Organic farming is a difficult practice that requires specific knowledge and conditions and more sustainable system where it can be successfully implemented.

“Organic farming is not easy. I will say that. Controlling not just weeds is very difficult. Managing your fertility is difficult, with your crop rotation and all of those things. It depends on what drives a person, but if you can do that and come out of the backend with a better soil, a healthier soil, which to me is worth a better value and produces a better crop, and you can also make more money and have a better way of life through it, I think those are two pretty attractive reasons to try to go change what you’re doing.” Justin Bruch

WHY JUSTIN TRANSITIONED HIS FAMILY FARM

The initial decision to transition his family’s conventional farm was driven by two key factors: the attractive financial potential he saw in his successful organic neighbours and a desire for a more profitable operation.

“We started transitioning our family farm in Iowa over to certified organic for two reasons. Ultimately financially, we weren’t making the money we wanted to make on conventional agriculture, versus what we thought we could get out of commodity crops and organic as well. We had some neighbours next to us that were organic that had said, “Hey, we’ll kind of lead you along if you want to make the change.” Justin Bruch

HEALTH IS SUCH A BIG DRIVER

Personal health concerns, stemming from years of handling dangerous chemicals, became a major motivator for Justin. He connects the high cancer rates in his home county to agricultural practices, reinforcing his decision to move towards a healthier system for both people and the soil.

“Health is naturally an issue, your own personal health. And then you also start thinking about some of those things that you put on crops that you then turn around and are going to consume directly or indirectly, whether through a protein of an animal source or through a direct consumption and all of those things. For me, yeah, they’re an alarm belt.” Justin Bruch

HOW WE GET MORE YOUNG PEOPLE INTO FARMING

Justin’s model at Clear Frontier is designed to address the high barriers to entry for new farmers. By providing long-term leases and sharing the financial risk of the transition period, they create viable opportunities for a new generation to farm profitably on a smaller scale.

“It gives us the opportunity, especially on smaller assets, to take that younger farmer that wants to farm that doesn’t have the operating line, the capital to go compete against the economy of scale farmer that’s trying to be the low-cost producer, and gives them the opportunity to be able to go farm 500 acres and, once they get through transition, make enough money, ideally, that they can make a living doing it, which is different than what we see in an economy of scale or a size-type farming.” Justin Bruch

OTHER POINTS DISCUSSED

Koen and Justin also talked about:

1. Why he decided to build a significant fund that manages over 25,000 acres all intransition to organic
2. Investment horizons and long-term investing
3. What excites him when it comes to technology

LINKS:

• Clear Frontier
• Exposing Why Farmers Can’t Legally Replant Their Own Seeds
• How One Company Secretly Poisoned The Planet

LINKED INTERVIEWS:

• Birker, Bösel, Mazzola – The Regenerative Agronomy Gap: who do farmers call?
• Walmart heir Lukas Walton’s $15bn bet on the environment

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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.