About This Episode
Damian Mason, author of Do Business Better, spoke at the Ag View Executive Business Conference on what he calls the ations shaping agriculture: population, immigration, regulation and inflation. His method is to state an observation, then a point of view and a prediction, then show the data behind it and let the room disagree. He predicts a point where American agriculture will genuinely need more immigrant labor, and sooner rather than later, alongside a regulatory environment he already considers prohibitive and expects to tighten.
His coined term is reguflation, the inflationary pressure regulation puts on consumers. He points to protein prices up 12 to 24 percent at the meat counter against a consumer whose pay is rising about 3.9 percent, and to mandates such as all-electric car rules that effectively price people out of replacing an old vehicle. Chris Barron adds that Ag View clients are seeing closer to 19 to 20 percent inflation. Mason also credits regulation with helping agriculture at times, including the renewable fuel standards.
On China, Mason describes two decades in which the country became the ag customer every meeting talked about. It fed people who had been starving as recently as the Great Leap Forward, when 50 to 150 million died, and it fed American farm growth, but it also gave US growers license to stop worrying and just plant more soybeans. His closing prediction: the last 100 years raised food productivity per acre five to seven times, and he expects that much change again in five to ten years.
“Necessity is the mother of invention. So we're going to see a tremendous amount of innovation out of necessity in the next 5 to 10.”
— Damian Mason
Key Takeaways
Mason's headline prediction is that American agriculture will change as much in the next five to ten years as it did in the previous 100, driven by autonomous machinery and biologicals.
Reguflation is his term for regulation-driven inflation. He wrote the article, got excerpts picked up by Fox, and bought the domain.
The consumer math he uses: about a 3.9 percent pay increase against costs rising at double that or more, with 12 to 24 percent bumps already on protein at the meat counter.
Chris Barron reports Ag View clients seeing inflation closer to 19 to 20 percent, well above the published consumer numbers Mason cites.
Mason is not uniformly anti-regulation. He credits the renewable fuel standards and environmental rules that pushed agriculture off older chemistry with helping the industry.
On China, he argues the two-decade export boom let American farmers avoid asking hard questions because it let them do what they most wanted to do, which was grow more soybeans and more pork.
Full Transcript
Damian
Mason: Biggest takeaway for your audience today is that we got really good at agriculture starting 100 years ago, and it's an industry we've been doing for 10,000 years. So for one-tenth of that time, we actually started getting really good at it. By all the vast amount of changes and innovation that happened in the last 100 years of 10,000 years old agriculture, we're going to see that much change and innovation again in the next 5 to 10 years as we've seen in the last 100.
Chris
Barron: Hey everybody, Chris Barron here again at the Ag View Executive Business Conference. We just got done listening to an excellent conversation with Damian Mason, uh, the author of Do Business Better. And also we have with us right now Ryan Moe, who's on with us a lot on the marketing outlook. So how's it going, Ryan?
Ryan
Moe: It's going pretty good. It's a lot better down here in Arizona than up in Minneapolis. Yeah, so it's just You know, not today.
Chris
Barron: Yeah, yeah, yeah. So what I'm going to do is actually have you, um, throw Damian some questions. You know Damian really well and, and, uh, have had a good, a good, uh, relationship with him and can probably pick on him about as good as I can. So, um, we'll go ahead and Damian, uh, go ahead and give us a— what you talked about, you know, what are some of the high points of what you talked about, and then, and we'll let Ryan pick on you a little too.
Damian
Mason: Got it. Well, today I was really happy to be here for Ag View Solutions Executive Business Conference for your farmers. Pretty obvious, some larger-scale, forward-looking, success-minded, but business-oriented farm operators. You know, this is a business that we've always concentrated on production, production, production, production. And I wanted to bring a lot of the business side of it and also future outlook for this business. These are the kind of people I can tell, Chris, in this room that they're talking about what's gonna happen 1 year, 5 year, 10 years, or even 25 years their enterprises. And so I try to make sure that we're talking about what's going to happen in 1, 5, and 25-year increments in our business. And of course you can say, well, plotting out the future, you know, come on, man, that's like genie stuff, that's tarot cards and crystal balls.
But what I try to do, and what you saw, I say, all right, here's my observation, then here's my point of view perspective and prediction, and then here's why I can tell you that. I don't mind if you disagree, but here's the data. So that's what we walked through today, was a fair amount of data, a few numbers numbers and observation that then the person's like, you know, I never really thought about that, and, and I'm not sure that— I'm not sure Damian's wrong. So I think we got some of that today. What you said there, as you said what the presentation was, we said we're going to talk about the Asians impacting agriculture, and Asians meaning words that end in -ation. Population, we spend a lot of time on that because we have a business that has been predicated entirely, not just our lifetime, but since the inception of agriculture.
We got to feed more mouths, we're going to have more people to feed, And I talked about some of the realities of what population looks like, talked about immigration, talked about regulation. On the immigration front, I predict a time when we're going to actually really need more immigrants to do the work that we're talking about, and at times going to be sooner versus later. So we talk about population, immigration, regulation, which I think we're going to move into a regulatory environment that's going to be prohibitive and already is prohibitive. It's going to probably become increasingly prohibitive. Then there's the inflation issue. Talked about, for instance, like some meat prices and what that does to the consumer as it pertains to, for instance, reguflation.
When I said we're talking about an issue now where we're going to, from a regulatory policy standpoint, continue to make it more difficult on a consumer who, according to my research, is getting about a 3.9% pay increase while everything around them is going up by double that or more.
Chris
Barron: Yeah, we're seeing inflation, at least with our clients, closer to 19 to 20% is kind of what we're seeing. Ryan, any—
Damian
Mason: I guess the other things that we said was Asians. I'm trying to think here what else we talked about. We talked about inflation and we talked about, and we talked about our nation and we talked about what the, what this looks like, what we look like as a global player. And I think that's a bigger thing that we come to these AgMains. We talk about productivity and we talked about how nutrients and all those kinds of things, but there's some bigger picture here stuff about where ag is as American agriculture and where America is globally in terms of, uh, the, the status of the world in the year 2022.
Chris
Barron: Questions, Ryan?
Ryan
Moe: Um, the term reguflation is something I've not heard before because I made it up and I wrote an article about it last month, but I think it's my favorite word of 2022.
Chris
Barron: You know why?
Ryan
Moe: I think it's something that needs to get more press. I think people need to understand what— regulation what it means to them, because this is something that's very serious, not just for the agricultural community but for everybody. Whether you're in a small town, whether you're in the suburbs, major metropolitan area, regulflation is very real, and it needs to be something that is, you know, more heavily thought out, I think.
Damian
Mason: Well, by the way, I appreciate you saying that. I wrote the article, I pinned it last month. Uh, Fox News or Business News did, uh, do excerpts about that, so I'm trying my best to get more press about it, and I shared it around social media. The other thing I should tell you is I bought the— I bought Reguflation.com. But, um, yeah, the concept of Reguflation came to me when someone was asking me, like, you're an ag guy, you're an ag guy, you know, what's, what's happening about— and they were concerned about some of these escalating food prices. I said, I said, right now it's worker shortage. I said, but remember, a lot of this comes back to regulatory environment. And I said, when you start talking about a regulatory environment that makes it more expensive to hire people make it sports.
I'm doing— you just said as it pertains to food, environmental things and the, and the push for green, green, green is going to make food production more prohibitive from a regulatory environment. We're talking about worker then standards, etc., which are fine. You know, this has been going on since Upton Sinclair published The Jungle 100-some years ago with the Chicago meat slop business. We've been seeing this for a while. But what I think, Chris and Ryan, we're going to see more of is the rampant nature of it when you've already got 12 to 24% bumps on protein prices at the meat counter then, then you say, well, this is just probably one-time thing. Those workers aren't going to come back to the meat plant as long as there's a generous social safety net. Is that really regulatory? Well, it certainly is policy. I think it's there. I think we're here for a while.
And you can even talk about another thing that affects the consumer. You're saying, does this matter to agriculture? When a regulation says we're going to have only electric cars by the year 2030, it just regulated in the end of your 18-year-old Ford Taurus. So what's that do? It adds inflationary pressure to car purchases.
Ryan
Moe: But I think it's positioning ourselves as an agricultural sector so that reguflation doesn't just have a totally negative impact. It's, it's about positioning around that term and what it's going to mean. It's going to hurt, but it doesn't have to hurt as bad if you just ignore it.
Damian
Mason: Well, as we also talked about in here, there's been times that agriculture, production agriculture, has benefited through a regulatory environment. You know, there was a regulatory environment that pushed the renewable fuel standards. There's been a regulatory environment about, you know, that's the biggest, of course, environmental stuff where all of a sudden we saved money by going to lesser priced inputs that we maybe wouldn't have. We would have stuck with Atrazine until we all died of cancer. I mean, there's things that from a regulatory environment have actually made us better.
Ryan
Moe: So we don't have a lot of time here today, but getting more and more in depth with the demographic situation in China with the shrinking population and what that possibly means to farmers in America is something that we could spend hours talking about. We don't have a lot of time today, but I do hope you guys cover that in a future podcast here for both of you.
Damian
Mason: Yeah, I'd be happy to come and talk about that. And let's face it, it's real simple. Um, China came on full bore as an ag customer for the United States of America roughly two decades ago, right? 20 years ago. And then it became remarkable. Then you couldn't go to an ag meeting, you couldn't sit and talk to an ag person where it wasn't all about China, China, China, China. And there's a tough part about this. You know what it did? It was really good for China because they fed their people that as recently as the 1950s were starving. You know, the whole Great Leap Forward where 50 to 150 million Chinese people were essentially starved to death by some communist dictates and The Great Leap Forward was anything but. So it's very good for the humans that were fed better. It's very good for their country because it festered, fostered, and fed their economic development.
It's good for American agriculture, but there's a concern. It gave us license to do what we love to do, go out and grow more soybeans, go out and grow. Hey, hey, don't worry about anything, just go grow more soybeans. And it kind of then played into that thing of, well, don't worry about anything, just go out there and grow more soybeans. And there was time we should have been a little bit worried about it because there's a lot of There's a lot of political strife and turmoil and things that we overlooked because they allowed us just do what we love to do, go grow soybeans and go make more pork.
Chris
Barron: Awesome. Hey, we are getting tight on time. I want to ask the last question here to you if I can, and that's from a takeaway perspective, you know, with this group we've got here at the Executive Conference, what's the key takeaway? What would you, how would you wrap this up?
Damian
Mason: For me? Yep. For my thing, I said that I believe American agriculture is going to change more in the next 5— we'll see more in the next 5 to 10 years than we've seen in the previous 100. And that's substantial because as recently as 100 and some years ago, 100, 110 years ago, we switched from horses and ox to tractors. We brought in chemicals like 2,4-D post-World War II. We went from plowing and cultivating to where we invented the great The Great, you know, the during the Great Depression, we had the Dust Bowl. We did some really remarkable things. We corrected through all those things and grew our food productivity per acre by 5 to 7 times. We're going to see maybe that much change in the next 5 to 10 years, uh, as I think we've seen the last 100. I talked about things like autonomous machinery and some of the biologicals. We didn't get into that.
I think we're going to see as much in the next 5 to 10. And now obviously there's some of the other strife. We will be forced to automate because of the immigrant—
Chris
Barron: because of the lack of labor and the whole environmental play along with that as well, right?
Damian
Mason: Necessity is the mother of invention. So we're going to see a tremendous amount of innovation out of necessity in the next 5 to 10.
Chris
Barron: Sounds good. Ryan, uh, thank you very much. Any last comments or are you good?
Ryan
Moe: Yeah, to echo Damien's comments there, Moore's Law is very real and it's coming into ag, and get on the right side of the hockey stick. Yes, this hockey stick growth is coming. So be on the right side of it. Meeting with people down here like we're meeting with, that's extremely valuable because then you start thinking outside of your current little box, wherever that little box happens to be.
Damian
Mason: We made sure we shook them up today.
Chris
Barron: There's some—
Damian
Mason: there's a few things they haven't ever actually really heard at an ag conference before.
Ryan
Moe: I couldn't see from my vantage point, but I don't think anybody cried.
Chris
Barron: No, you didn't make anybody cry. That's good though. Thank you for that.
Ryan
Moe: Good stuff.
Chris
Barron: Really good stuff. Awesome. Hey, uh, Ryan, uh, appreciate you being here. Ryan with StoneX, uh, appreciate you helping us on the podcast and stuff too. And, uh, appreciate it, Damien. You bet. Thank you. And Damien, thank you very much. Uh, outstanding presentation. It was really good. And, and, uh, you know, author of the book Do Business Better. So, um, I always advertise that for you, Damien, because I think that's a great book. Everybody, if you haven't read it, I think you need to, to get on it. And also, what's your, what's your podcast? If people—
Damian
Mason: The Business of Agriculture. Just go to damienmason.com and You can grab all my stuff there. You can see all my stuff and access all of the videos and the YouTubes and the, and the podcast, et cetera. So go to davemason.com.
Chris
Barron: Awesome. That sounds good. Hey, thanks guys. And thanks everybody for listening. And we will keep you updated here from the Executive Business Conference for the Ag View Solutions team. We'll catch you again soon.
Ryan
Moe: Thanks.