Will your farm survive 8 generations?

Shay

Foulk: Welcome back, everyone, to another episode of the Ag View Pitch. Today you have Shay Foulk with Quint Pottinger. But what, what's going on in Kentucky? Where are you located at and where are you at in the season right now?

Quint

Pottinger: I'm in— I'm in central Kentucky, but depending on where you live in Kentucky, everybody lives in central Kentucky. But I literally am in the middle of the state. Both north-south and east-west. We're 50 miles straight south of Louisville, 15 miles straight south of Bardstown, which is the bourbon capital of the world. We live 15 miles from Maker's Mark, Jim Beam, and Heaven Hill. Okay. And our primary market shifted into the distilling market back in 2016.

Shay

Foulk: Okay. So it's funny that you say that on the cross-sectional analysis. I was just in Ontario on a fishing trip.. And I had a gentleman reach out to me from London, Ontario, which if you were to take Ontario and divide it into 4 sections, that's Southeast Ontario. Now, when I said I was from, I was in Southwest Ontario, to them that's Southwest Ontario, but I was northwest of International Falls, Minnesota. So it doesn't make sense unless you're from there. I think it's a big cultural thing. So I appreciate you pointing that out. Maybe someday I can be from Central Kentucky too. So your operation is Affinity Farms. I think I saw 9th generation, a lot of history there. What stands out to you about, you know, the history, the stories that your, you know, your dad or grandpa or whoever else in the family has told you around the origins of your farm?

What's really important to you and your family today?

Quint

Pottinger: Yeah, so we're 8 generations here in Kentucky. And I know on the farm, I know quite a bit about our family history. We settled New Haven, which is the town I live in. We settled that town in 1788. Sam Pottinger got an 8-acre— an 8-acre— an 8-square-mile land grant from George Washington after the Revolutionary War for serving as a captain in the war. And we moved a few families in and we built a fort here to protect Bardstown and from the southern part of the county. And we've been here ever since. Now, the farm as it was back then, they were raising corn and oats for horses and whiskey. That was the economy. And they were tying together, you know, yellow poplar logs and putting them on the Ohio River and selling the whiskey down to Louisiana to what I guess now is Bourbon Street.

As a matter of fact, a lot of the buildings that are down on Bourbon Street, they've got a lot of yellow poplar timbers in them it all came from central Kentucky. Um, so yeah, originally called Pottinger's Landing, and then the farm, uh, it was never passed down. If you wanted to be— if you wanted to be a part of the farm, or if you wanted to be part of the family business, you've had to buy a piece of land and start something. And so we've had rock quarries, distilleries, schools. We helped build the Abbey of Gethsemane, which sits across the, the way here. And then my grandmother called me in 2011, right when I was getting ready to graduate from University of Kentucky. And she said, "Quint, I'm tired of being on the farm. I'm going to move into town. There's 80 acres of the original land left.

Do you want it?" And I thought in my head, I always thought I'd have to go work somewhere to get back to the farm. But this was an opportunity to come back to the farm immediately after college. And I said, "Yes." I went to meet with her the next day. And she slid a piece of paper across the table and said, 'Quint, this is how much— this is how much the farmer praised for. I think it's worth a little bit more than that. You write me a check when you're ready.' And I said, 'Well, Grandma, we've had a huge misunderstanding. I thought I was getting a farm. You're asking me to pay for a farm fresh out of college with a stack of college debt, and I'm getting ready to get married.' Anyway, she worked it out so we could buy this last 80-acre tract, and from there we started building out what Affinity Farms is today.

Leaning into it at the time, if you remember, organic and direct consumer was big. People were really starting to ask where their food came from. They were starting to question a lot about the food industry. And we just looked around. Row cropping was my background. I grew up on a row crop farm with my dad, and he was still farming about 300 acres at the time. And I was able to use some of his equipment to start and we got into vegetables. That was a complete disaster. Yeah. And then craziest thing I was, there was a mini economic collapse in the industry in like 2015, late 2014 to 2016. That thing kind of lulled out and it was my third year farming. And I remember going into Walmart on Black Friday. And looking around at the madness that was ensuing. And I looked over and there was a pallet of deer corn in 40-pound bags selling for $12 a bag.

And I'm sitting there thinking, I'm getting $2.83 a bushel, and in this suck— something's not making sense. So we were farming 800 acres at the time, and we decided to— and I talked to my farm mentors, my business mentors about it at the time, about putting in a bagging machine there on the farm. And you could get a manual bagger for, you know, $4,000 and certified scales for $1,000. And my farm mentor said, man, you'll never be able to sell enough corn to make that work. And, you know, in a way he was right. And then my business mentor said, you could do it, but don't do retail. Do wholesale. You'll take a cut, but you'll guarantee a market. Don't undercut your retailers. And that ended up working. And so we started bagging corn. And when we were— I remember the first year I sold, I think, 8,000 bags, all hand-bagged, all hand-sewn with a little hand sewer.

And I thought we were doing great. And that summer— I said, then the next summer, in 2017, This guy walks into my shop where I retrofitted this old feed bin to feed into the bagger, and I've got 20 pallets of bag corn in the shop. Walks in, big old beard, takes a bag, rips it open, runs his fingers through the bag, and said, 'This is exactly what I'm looking for. I'll take all 20 of these pallets today.' This was a Saturday. And said, 'I'll come back, I need 20 more on Tuesday.' I said, 'Who the hell are you and why are you on my farm?' And turned out that his brother was working for an outfitter, hunting outfitter that was selling our corn, and he had been buying corn from them because they needed something clean that they couldn't get at the local mill. And he said, you know, we're a craft distiller and we can't buy enough. We don't have the facilities to receive grain in bulk.

Can we just buy directly from you? And that's what— that's how we got into the distilling industry, selling grain to them. And that same distillery asked us to grow rye. We did. And then about 4 years ago, they asked us to grow malt, to grow barley to put in. I was like, well, you got to malt the barley. We can't malt here in Kentucky. We finally figured that process out. So we're starting, we just broke ground on the malt house yesterday, which we're really excited about. So we'll be able to offer all 4 grains for a mash bill and be able to get into the brewing space. It all ties back to what my family's been doing for, you know, 200+ years. How do you build a food system? Or how do you build a business or economic system that feeds the community? We have a strong thesis here in our business, in anything that we do.

In America, no business makes it past the third generation unless it's economically, environmentally, and socially sustainable. The economic part's easy. Just have more money at the end of the year than you started with. Environmental, for farmers, We've been fighting and beating that drum for 25 years, proving to the public we are environmentally friendly despite the chemicals we use and the fertility we use. We have to make sure this ground is still good for our kids and grandkids. So we're very environmentally conscious. So we check that box. No business does a good job of social sustainability, not one. We used to do a really good job at it. So a long way to answer your question, you know, what has What do I know about my family?

We have always in some way or another found a way to invest in the community in a way that kept us operational, whether it was with the farm or some other type of business.

Shay

Foulk: So I want to come back to the socially sustainable. You know, we do packaging and bagging. So I love that story. That's a, that's a great walkthrough. And I love the idea of this guy coming in and cutting a bag open and you just being like, whoa, who? The hell are you, buddy? I love that. I love that outlook. So I want to ask you a couple of questions there quick. So that 20, you know, 2016 time period, were you still farming with your dad? Do you farm with your dad today? Kind of what's that look like in your operation? And how do you see that evolving in the future? Do you got kids? You know, how do you think about it from a familial perspective as you, as you move forward here?

Quint

Pottinger: So I was farming, my dad was farming, and I was farming. We had two separate entities. My dad had a custom harvesting operation. So we had, he had newer equipment that, you know, had access to. So that cost portion wasn't as much of a burden when I started. In 2018, we merged our farms together, took us over the 1,000-acre mark. But the main reason we merged was because We— there was a movie that came out a couple years ago called Silo. It was about a grain bin entrapment. That movie was filmed on our farm. And I got to know the producers very well and the people in that space. And through the, the script and the farm and working with the actors to try to understand how a crisis like that could happen. They, we, they uncovered real systemic issues in the farming sector.

And I told Sam my vision for the future of Affinity Farms and what I thought the future of agriculture would be and how we could show people how to do it. Because I thought by 2030, this '70s-style commodity system would collapse completely. And he said, 'Quint, you won't be able to do that on your own, not with current lending standards, and certainly not with the scale you want to do it at. You need help.' So we filed with the Security Exchange Commission, and we started soliciting accredited investors for this vision of the farm. So that— my dad and I, we valued the farm together. We put a cost per share, and we started selling that off. And that coincidentally solved my succession planning problem that most farms run into. So we don't have any kids yet. We are, we are planning kids in the near future.

But our kids will have the opportunity to buy shares in the farm, or we'll gift them shares. That's how succession will work. But we will work to hire, employ people that understand our vision and our mission for the community. And if our kids want to be a part of that, that's great. If they don't, they'll still have some ownership in it.

Shay

Foulk: So that— is it Sam Nolten? Is that his name?

Quint

Pottinger: Goldberg. Goldberg.

Shay

Foulk: Okay. Sorry, I don't know where Nolten came from. Yeah, I had had some conversations with him. Yeah, a number of years ago. So that's interesting. Come full circle.

Quint

Pottinger: You should reach out to him. He's getting ready. He's releasing a new TV series, I think this month about a dairy farm, and it's entirely focused on mental health. In the industry. It's a really cool story. Same guy that wrote the script for Silo wrote this. He's been working on it for 4 years. It's really cool.

Shay

Foulk: Yeah, that's amazing. Do you know what the name is, uh, the title of it?

Quint

Pottinger: Perfect Sundays.

Shay

Foulk: Perfect Sundays. Okay, awesome. Well, thank you for sharing that, and definitely need to reconnect with Sam here. Um, you know, the, the accredited investor part, when you looked at doing that, what was the driver behind it? Because I think there's a lot of people listening to this that, uh, might find that approach interesting? Is it something that you think worked for you because it's specific to maybe the location and geography that you are in, in true central Kentucky there? Or do you think it's a path that would be an option for other farm operations across, you know, the United States or North America?

Quint

Pottinger: It worked for us because we searched hard for a good partner a good fund that understood our vision. Um, there are a lot of— it is a world that I just wasn't— I knew it existed, but I wasn't intimately familiar with. But there's an entire world of millennials out there that have made a ton of money, um, and they want to invest in cool projects. And most hedge funds, you know, they won't look at anything that's less than $25 million. But you've got some people out there will look at something and say, yeah, I'll put $20,000 there, I'll put $100,000 here, especially if they really believe in it. And so I think it's an option and an opportunity that most people can explore. I can tell you this, our current ag lending institutions are not able to— they're not able to certify or underwrite the risk that is involved with this transition.

Even though we've done this before, we're going back to, I think, something that we did for much longer than we have in the last 40 years. They don't understand the risk profile that's associated with it because the consumer has changed in a real way. And you can't insure it. And you got to think most ag institutions are able to underwrite all the risk today because we have federal crop insurance, or we have protections that are in place by the government that protect our thin margins. Without that, they couldn't underwrite anything. So this is a real option if you want to move in that direction. I'm not saying you have to, I started farming at $500. I got married at $500 in my bank account, and I had $60,000 of student loan debt. I didn't have anything.

And then I ended up buying this farm, you know, owner finance for 3 years, and the bank took a risk only because I could get a low-interest loan. It's just starting out farming is capital intensive. And then when you make transitions like these to try to bring in something that is more profitable, but it's just a different model, it's hard to underwrite the risk. So yeah, I think other people could do that. If they're willing to. We got a lot of people told us we sold out, you'll never get it back, you'll lose the farm forever. This farm is not mine. I mean, I own it. It's got my name on it. I'm the majority owner. But the purpose isn't just to hold on to the damn thing, right? It's got to have some utility, it's got to have some service behind it. Otherwise, what's the point of having it? You just got acres.

Shay

Foulk: And I think the underwriting piece that you referenced there, one of the uncertainties and things that makes me feel very uncomfortable about state agriculture today is how much the underwriting is contingent on the value of land prices that have increased exponentially over the last two decades as a result of, you know, backed policy, backed increases with hedged inflation and, you know, a significant amount of outside investment. I'm not going to say exorbitant, but we'll call it significant as a hedge against inflation. That's a— when I look at the ingredients that go into that recipe for whatever it is that we're baking, I don't like any one of those ingredients individually that much. And I'm not sure the product or the cake that you get on the back end is going to taste all that good.

So it's not a doomsday prediction or scenario, but I think I would tend to agree with you on What is it that we're building here and what's the sustainability of that long term? How does that strike you?

Quint

Pottinger: Yeah. No, I think you're right. And nobody can predict a black swan because that's what makes it a black swan. So, people that talk about black swan events, they're predictable and you can hedge against those. But the issues that I see in the regional banking system with collapsing deposits is directly related to inflation and Fed policy. You can say what you want about Jerome Powell, but he's done a pretty damn good job in making sure this thing doesn't run away from us. But if land prices slip, it won't be a 1980s-style collapse. It'll be a 1930s-style collapse. And the reason it will be is because in 1980, farms in the '70s blew up. They didn't finance their inputs or equipment. They financed their land. Mm-hmm. And my dad talks about he made it through the '80s crisis by putting his grain truck on the road and hauling direct runs to Louisiana.

He did that for 3 months, made $30,000, and was able to put out his 300 acres of row crop. You know how much it costs to put out 300 acres of row crop today? I can't put a truck on the road and generate that kind of revenue in 3 months if the banking system collapses. And third-party lending has run amok in this industry. And I can't say much about it. I was able to farm for 2— I was able to start farming for 2 main reasons: ethanol legislation that passed in '06 that put a base under corn that made it profitable to come back to the farm and attractive. And 0% interest for 8 years. And I was high risk. So 0% interest for me turned from third-party lending to 7% interest. So I've been paying 7+ percent interest since I started farming. And then last year, I was paying like 18. I had to get out from underneath that.

Farms today are so overleveraged with third parties that aren't reported because they don't report it. Deere and Company doesn't report it. Nutrien doesn't report it. Southern States doesn't report it. It's hard to understand how levered some of these farms actually are. And if they collapse, thank goodness we have data centers that are coming in and bidding, bidding up the cost of land. I mean, like, you say what you want about data centers, we use them. I mean, anytime you pick up your phone, you're accessing it today. And I understand the fight. We shouldn't be taking prime farmland out of production for something like that. And understand the utility costs that are associated with it. And those residents should be compensated in some way. There, there are ways to solve that problem.

However, this movement of both green energy and data centers, even though I don't agree with either of them wholly, have kept land prices from slipping in rural America.

Shay

Foulk: Yeah.

Quint

Pottinger: And we better hope they don't go away, at least not in the near term.

Shay

Foulk: So I want to, I want to look, and I'm going to bring this back to the social sustainability, because I think that's a really critical piece here. But Let's kind of hone in on the data center piece there because you're also doing some unique things within the farm operation around autonomous seeding, planting. Tell the listeners a little bit about that project. How's it come to fruition? And what does 2026 look like on your farm operation?

Quint

Pottinger: Yeah, so part of this whole We know 2 years ago we dug in, I could tell that story later. And we realized that not— we had a big problem. And then things happened. And we've realized that ag has got a very big problem. And we cut everything we could cut. And, you know, I was running 2 2008 8000 Series Deere tractors, 30 Series tractors, I was running a 2001 planter that was decked out. I mean, it was nice, 40-foot, 16-row planter. And then another 1631 with a lot of tech on it. I mean, my equipment was old, it had the new tech on it. We were all in about $480,000. The debt service on it for all 4 pieces of the planting equipment came up to about, I think it was like $65,000 annually. We had to cut something somewhere and we had to return money back to the operation.

And I got on last summer and I just typed in a autonomous tractors and Google, and the first thing that popped up was Sebanto Ag. So I did a cold request and Mike Burdick reached back out to me, said, yeah, we got a lot of stuff on mowing. We'd like to be in the seeding space. We're doing some trials, but we're not there yet. Well, last year I had a lot of prevent plant acres from just the wet, wet spring. I said, well, send the thing out here. Let's see if it works. And I put a 10-foot drill behind and I planted like 120 acres with that thing. And I said, this is pretty neat. I told my dad what we were doing. He said, well, RFD-TV came out with an article or a story, and they said that ag is at least 5 years, probably 10 years away from full autonomous planting. And I'm sitting out there looking at this thing. I'm thinking, I don't know.

My dad drives up and he sees that thing pulling the drill and he looks at me. He's 76 years old. He looks at me, says, I don't care how you have to get it done. Get it done. Okay. So we took an old 15-foot drill. We put some Precision Planting tech on it because we realized that the Panorama system to remote view into the cab was coming on the Precision side, was not intended for remote autonomous farming. It was just meant for remote view. And we planted all 500 acres last fall, all of our rye, our wheat, and our barley and our cover crop. Every bit of it got planted fully autonomously last year. We thought it's easy to make this transition to row cropping then. We have the tools we need, we can outfit a planter, it doesn't have to be that big.

And so we ended up buying a 20-foot, 8-row splitter, 15-row planter, and put behind 135-horsepower tractor that's got the Sebanto system on it running two different operating systems, Precision Planting and Sebanto, to plant autonomously. And it took us a long time to get that thing in the field. There are just some nuances that go along with that. And laying out a field for autonomy is completely different than laying out a field if you're going to be in it. The things you have to think about are backwards almost. And I keep teasing my dad, it's like, I think we're gonna end up wanting to get a multi-directional corn head before fall. And he's like, if that thing is as accurate as you say it is, I can run 16 rows through it. I was like, okay, we'll see. But today on Affinity Farms in 2026, we will plant 90% of our row crops, corn and soybeans, fully autonomously.

And when I say 90%, the reason I can't do 100% is because the darn thing can't back up. So I got to go back and fill all the corners in.

Shay

Foulk: Okay, interesting. With the— I want to ask real quick, so the seeding that you did last fall, both on the prevent plant— I should say last spring, summer, whenever that was— and then the seeding that you did with the rye and barley and wheat, how's that looking? You feel good about it? Seeding depth, are you out there in the field watching it, you know, from the pickup truck doing other things? Tell me a little bit about your your experience. I know it's new, but, uh, how do you think about that?

Quint

Pottinger: Well, let me ask you a question. How many times did you get off the tractor, out of the cab, when you're seeding, check depth today?

Shay

Foulk: Uh, I'd stop about every half hour. Okay, so, uh, 15 to 20.

Quint

Pottinger: Okay. Um, we don't check it that often, but, um, We make it a point to see that tractor about every 4 hours for fuel and for seed. And we have sensors on the machine. Precision Planting has the sensors available to let us know if we've got depth issues. Okay. That was a concern. Seeding depth was the biggest concern. We stripped everything off that planter. We had— we were putting liquid in furrow, we were doing liquid side-by-side, we were doing all kinds of treatments. And they said, let's just make this as simple as possible for spring. The wheat and the rye crop and the barley crop look incredible. We had great stands. And the first 2 days we were planting wheat, I just, I'd fill the darn thing up. And I'd sit on the seat tender and I just watch it go. And I have to remind myself, you idiot, you got this thing so you can go do other stuff. Get out of here.

Shay

Foulk: But it's fun to watch.

Quint

Pottinger: It's fun. It is so fun to watch. And, and, you know, you see it go, it's running, you're like, man, that's cool. And you're like, all right, well, there it is, you know, and you catch yourself watching it and then you're gone. When you're not there, when you're absent from it, you, you have this reminder and a little bit of anxiety what you were really doing while you were in the field. And now that we have the technology to monitor those things, I actually can get the peace of mind. Whereas before I had the technology and I was in the field, I'm still worried about it. There's some things you can't control.

Shay

Foulk: Yeah. With, you know, I think for me, it's like plugged rows. It's rocks in your, in your, in the gauge wheels or in your road trash cleaners. It's, you know, the goofy hydraulic things that happen. Talk to me about all the sensing capabilities. And, you know, how did the system— you mentioned the two different operating systems— did it do a good job with notification when there was an issue? How did that peace of mind on the recovery process work when there was a problem?

Quint

Pottinger: Actually pretty good. I can't speak a lot to the Panorama stuff. We had a— I think there was an internal fight at Precision Planting or at AGCO when we started last week. By the way, we just got started last week and we're punching stuff in quick. We're stopped today because it's raining. But from a sensing standpoint, we have intentionally kept the two systems separate because if there's a plugged row, I don't want the machine to stop in the middle of the field. I want it to get to the end of the row. And also want to see, is this a temporary thing? Is this a sensor problem? Or is this an actual issue that needs to be addressed? We've picked up when we lost a gauge wheel, just came unscrewed, pick that up on the monitor, stop the planter, went out and fixed it.

We've picked up plugged— we had some mud get into the, the row cleaner or in the seed tubes last night, went through a mud puddle. Didn't know it was there, plugged up the— so we, you know, we've got a pass. It's thankfully it's in the back of a farm, but we got a pass. It's probably 100 foot long that doesn't have any seed in it. So I have to go back and hand plant that. But you didn't catch it immediately. And I didn't see the mud hole. So that's— those are issues, risks that we take. But the interesting thing, I had a fight with my agronomist on this. And he told me, he promised me, said, Quint, you'll be okay, don't put the no-till coulters on. The row cleaners and hydraulic downforce are your issues. Go back to airbags, take the row cleaners off and slow the planter down. And so, and we're not planting 5 miles an hour, we're planting like 3.

And I can't— and we're able to hit 120 acres a day with an 8-row planter planting 3 miles an hour. We're going slow to get appropriate depth and to make sure the thing can cut. I think, you know, ag tech in the last 10 years has been pushing to bigger planters that can go faster, tillage tools that can go faster. Maybe if we slow things down, these old machines will work just fine.

Shay

Foulk: Yeah, for sure. Now, are you conventional till? Are you no-till? Tell me a little bit about like the management practices that you guys are there locally.

Quint

Pottinger: We're primarily no-till. Before this year, I would say we were 100% no-till, but we've got— we're doing some pretty cool stuff with BTI. In learning about the biology of the soil just a little bit deeper and understanding carbon and how that cycle plays a role. And tillage is the enemy to that. But when that process— we found out we had a lot of trapped phosphorus in the top couple inches of soil we needed to work through. And we had a lot of— we do, we do deep tillage often, but we had a lot of subsurface compaction, like 5, 6 inches. Just from just continuous no-till. And so we've done a fair amount of tillage this year for the first time, but typically no-till.

Shay

Foulk: With your, with your deep tillage, are you referring to like a subsoiler going down 18 inches, 20 inches?

Quint

Pottinger: We won't go down that deep, uh, 14 inches, sometimes 16. Yeah.

Shay

Foulk: Okay, interesting.

Quint

Pottinger: You get too deep around here, you'll start pulling up rocks.

Shay

Foulk: The rock, the rock crop is good this year. The rye crop too, so Okay, so I wanna talk a little bit about your social sustainability. And this is one of the main reasons I had reached out to you the other day. So I'm gonna speak my piece here about how I think about our farm operation moving forward. And a lot of this came from a Christian business leader peer group that I'm a part of called ConVine. And one of the messages in there is thinking through your business about what is your kingdom purpose and why are we doing what we do? So, you alluded to that of you own the land and then what? Do you own it to hold it? Are you a caretaker of it? How do you think about it from a legacy standpoint? And it really challenged me to think about the businesses that I'm involved with. Why is it that we do what we do?

And I visualize this and for the listeners, I know I've said this a couple other times, but I think about our farm as a means to support our family and to support our church community. I think about our seed business as a way to support our local community here within the surrounding towns, the rural area, and the county. I think about the work that I do with Ag View Solutions on the consulting side as more of a national impact. And then my military service as the outside circle from a global standpoint, if you will, just from the time that I had there on active duty and then what I do today. So that's how I think about my kingdom purposes is what are my circles of influence? Why are we doing what we do? And it's to have a positive impact within our family, to focus on the things that are important in our church community.

How do we hire people from the local community and have that impact and influence on them in a net positive way? What are we doing to directly impact the community? And so we have some other projects that we're working on for food sustainability and things like that here locally. When you think about that social sustainability that you referenced earlier, how does this all tie together? You've mentioned the distilleries, you've mentioned the management and environmental practices, you're looking at technology. How do you bring that all together? How do you, how do you grasp that? What have you been thinking through, um, here over the last decade?

Quint

Pottinger: Well, there's a, there's a really, really good book by Yuval Harari titled Sapiens. Um, it just talks about the evolution of humans from being hunter-gatherers to building everything we build today, and there's a real purpose in agriculture. And we have a lot of pride in it. Because I know I heard an economist say last week, you know, other industries have their consumers, they have their people, their market they sell to, and a farmer's consumer is 8 billion people, right? Everybody's our consumer. Well, only if you can produce a product that they, that they want. We're civilized because not everybody has to go out and hunt for their food, or they have to go out and gather. A few of us have made the decision that we're good at this. We can do it the correct way. And we will make sure that we feed the community.

Well, that changed in, in the '70s when Earl Butz said, get bigger, get out. And we shoved everything through this commoditized system, which was great. I mean, we ended up feeding a lot of people around the world that that were less fortunate. And I think, yeah, it's done some really good things. However, in that process, we've had to make sacrifices to health to make sure that this stuff stays shelf-stable. And in that, I believe the American farmer has been marginalized at the expense, I would say, of greed, but not just monetary greed. Because greed gets in the way of everything. That we do. And some of that is tied up with ego. To be socially sustainable, you have to defeat that a bit. You have to understand that if you're going to have, like you say, a kingdom purpose, whatever that is, you have to, you have to put your ego to bed.

And we made mistakes because I didn't do that a couple years ago. I had an opportunity to to pick up some ground. And I was looking at the other row crop guys. And it's like, all right, now we can, we can pass that 3,000-acre mark, we can build another grain bin, we can buy some newer equipment. And we could run with these, these commodity producers and completely forgot that the purpose of Affinity Farms wasn't that and it never has been my family's purpose. It worked for the last 40 years because that's the economic environment they've been in. The purpose was to serve the community. What does my community demand? And because we've spent more than a generation destroying what a local food system looks like, I don't think the consumer knows what it is. But when they see it, they engage with it. And with, with whiskey, you test that very easily.

So many products on the market, but there are a few products that when they come out or when they're released, it really gravitate— consumers gravitate to it. And I think that's because we are, we're a species of storytellers. We like to be able to tell a good story and to live a good story. And if farmers, especially American farmers, are going to, to feed our civilization, you know, the way that agriculture was based and built around, we have to be listening to those consumers. And I think our consumers, they're not deaf, but they may be mute. They just don't know what they, what they want. So they can't tell us. We know what they used to want. And so how do we create a system that allows that to happen? And in some places, it's just impossible to do just because of what can be grown, or what can be provided, and how cheap it is to move to import some, some items.

But we have a unique opportunity because of our positioning with the distilling world that we can take what we already do grow. You know, grains, marry that to a local system to lever or to delever transportation costs, which is, you know, as you know, it's about a third of your total cost of production. And then what does the byproduct come out at? And how does that byproduct get used to serve in another food system so that food system doesn't have to cycle through 8 states to get back on your grocery store shelf? You do that right. Then you serving the community, your business serving the community becomes real and it comes into focus. Um, how are we socially sustainable, or what does it mean for us? It really is about providing product or creating value in a product that serves the consumer here first, uh, that may have utility outside.

You know, we don't give that up, but that's what we're here for.

Shay

Foulk: Yeah, talk to me a little bit about, um, the, the byproduct use. And I know you mentioned that you just, um, broke ground on the, on the malting facility there, um, which is fascinating. But, um, is a lot of that byproduct use then going back to cattle for local consumption, or talk to me about that?

Quint

Pottinger: I can't talk too much about it because we're still rolling a lot of this stuff out.

Shay

Foulk: Oh, okay, okay.

Quint

Pottinger: But I'll say this. We have an initiative where we believe we can economically sustainably produce 1.6 million food servings a year. Not just beef, poultry, fish, produce, all of it, all using, all using this economic system that's already in place. Um, slop goes to beef. Uh, the problem with the local butcher shops is they scale too quickly, right? So you have to, you have to put greed to bed, you have to put your ego to bed. If you're going to do 10 head a week, do 10 head a week. Identify the market and don't outpace your demand, or don't outpace your supply. Um, if you can go to 50 head a week, where's it gonna go? Like, who's gonna buy it? How many grocery store shelves can you get in? Because grocery stores, they, they sell space, they sell shelf space, it's real estate.

And every Kroger or Walmart or Publix, they've got allocated funds that each manager has to buy locally. But if that shelf space gets a little too big, then JBS or some other packer is going to come to Kroger or Publix and say, if you keep buying meat from this local processor and taking our shelf real estate away, even though there's demand for it, we'll stop selling all of our stuff to you. And not just to your store, every store across the nation. So they have incredible leverage. So part of the trick is you just kind of, kind of float under the radar a little bit and develop the market. I talked to our economic— head of our economics department at the University of Kentucky. I got to bend her ear a little bit last week. 2 weeks ago. And I said, my education at the University of Kentucky was incredible.

But every one of my marketing classes taught me how to hedge grain on the Chicago Board of Trade. None of my marketing classes at the University of Kentucky taught me how to market a product. If agriculture is going to transform into serving communities by providing food, we're also going to have to learn how to market a product.

Shay

Foulk: My belief, or one of my beliefs, is I think the best way to involve the community in agriculture, because like you said, they're not mute, deaf, and dumb. They just don't know what they want because they've been so far removed from what a natural, or not natural, but maybe a more historical food system looked like, is how do you get people to care about agriculture or care about farming in general And I don't think it's ethanol. I don't think it's cheap sustainable food. I think the best way you can do it is get someone to grow a garden and understand the work that goes into it and understand the quality of the food products that come out and the effort that goes into doing that. I know you had your foray into vegetables that I won't bring up there, but just, you know, you have to show people what it can be.

And I guess that's just one of the personal things that I have from a community impact is you don't have to go completely against the grain of the wood to have an impact locally. I think there's a real hunger out there, not a physical hunger, but there's a real hunger for connection, for community in a world that's moving at the speed of social media right now, to be able to reconnect and to be able to have that personal outlook with operations. And, you know, I think it's pretty interesting, kind of the approach that you're taking on that. And obviously, you're, you're all in on it. So that's pretty cool to see.

Quint

Pottinger: We believe this is the right direction for us to go. I don't think that everybody has to go that way. And I think that there's going to be opportunities in the commodity space to continue to farm the way we've been doing it for 40 years now. I don't know how long that'll last. It may last a long time, I may be wrong. And I also don't think that consumers— consumers in this country value convenience. There's nothing wrong with that. But there are some that would— that do value— it's not more expensive food, it's just, it's locally sourced, it just has a little— has less salt and has less sugar in it. You know, you go over to Europe, I mean, they value that a lot. You go to Asia, they value that a lot, and they know their butcher. They know their baker, you know, they know their potter, they know them all. They're part of the community. We just don't have that here.

And a large portion of our, our capitalist economic system is built on the fact that we have to keep the cost of food below 15% of our annual income. It gets over 15%, this economy goes south very fast. So providing food locally is not just a way to increase profits for us. It's a way to provide something that's healthier for the consumer locally. It doesn't work if it's not local, because 36 or 38 cents of every dollar in food goes to distribution. If you're not distributing it more than 50 miles, you recapture that, you know, the consumer pockets the difference and you pocket the difference. So it doesn't have to be more expensive to be higher quality. One thing that we found out that's very concerning that my wife pointed out from work that she did in food deserts in Louisville is that there's a large number of very well-educated people that don't know how to prepare food.

I mean, so we can do all this and we can offer fresh food, we can offer fresh produce. But if they can't cook it, they're not going to buy it. So there's some education that goes along with that, too. Absolutely forgotten how to do that. I mean, we, we— I grew up, I grew up with ready-made meals, man. I mean, you know, I had Lunchables in my take-home, and you know.

Shay

Foulk: Yeah, that's an interesting point. What, um, you know, I'm just curious about this from a, from a personal aspect, um, you know, because we're, I would say, I think probably similar age, and we got some young kids coming up on our end. And you know, how does your wife think about the projects and, and the future of the farm operation and the involvement there? I know that's a really personal question. I don't know you that well, but I think it's important for the audience to understand that there's familial parts of the business that impact everything else that you do and the community and the shareholders. They all have to be synergistic for that economic, environmental, and social sustainability that you referenced there. And I think happy spouse, happy house is probably the ultimate social sustainability.

Quint

Pottinger: She's not always happy. My wife has a big brain, and she can think through problems at a fast pace. And because of that, she's— she doesn't just ask questions, she qualifies a lot of questions before she asks them. And she's part of the reason that we're here as fast as we are. We have problems on the farm. We talk about it at night. We talk about it in the morning. We talk about it in the car. What's the solution? How do you get past this thing? And she didn't grow up on a farm. She grew up in the city. So she's curious anyway about agriculture and farm life. She started her own flower farm to try to engage more with it. She owns a business, a photography studio that, you know, if she told you about it and she didn't tell you she took pictures, you'd think she was offering some type of therapeutic service. And that photos are just part of the service.

She has a very unique way of understanding the consumer's wants and trying to marry a product with those wants. So she is very involved. So when I have a project I want to do, I'm not on, you know, ChatGPT or Grok or whatever else. I'm talking to my wife, working through problems in that aspect. Um, she has a big brain, so she helps him work through a lot of it. Yeah, she's right there with me.

Shay

Foulk: That's amazing. Great tribute to her too. So, um, any, you know, as we wrap up here, I, I got, uh, you know, I just got a curiosity around kind of what else is on your mind. What do you think is, is pertinent for the audience? You know, this, uh, the podcast goes out to people across North America, farming operations of all different shapes, sizes. A lot of people that are in industry listen to this. So everything from financing and lending to commodity brokers and people that are retailers and suppliers, just to get a pulse on what's going on in industry. What's your message? What's your thoughts to kind of this broad audience, I guess, of people that listen to this podcast?

Quint

Pottinger: You know, we ended up here where we are today because in 2024, we wanted to put a slot drying facility in so we could dry whiskey byproduct from 60% to 10% to make it shelf-stable, pelletize it, and sell it to countries in Europe. And in the, you know, the events of the Black Sea being closed with the Ukraine war, Understanding that it's important to understand that most people don't— you can only grow grain in 3 places in the world, grow enough for your own population and export the rest in excess. That creates a good dynamic commodity market, right? So you got the Black Sea region, you've got the Pampas, Argentina region that stretches up through Brazil and Uruguay, and you've got the Midwest. That's it. China, they've got a little bit up in the north, but they don't have a way to get it south because there's no ports they can run it out of.

It all has to be railed down to the population centers. Japan's got a little bit, not much. Australia's dry. The Northern European Plain is constantly being fought over. We have a safe place to do that here, and that's why we've been so successful in doing it. This system works because we have a very fragile, fragile global shipping mechanism backed by insurance owned by one company. It's anything could put tip the scale one way or the other that can make the whole thing collapse. Now, do I think it will? I don't. I think demographics will drive it lower before anything else will. Um, we have all of our economic models, and there, there are guys out there that can break down this theory in really, really great detail, and I'm not going to attempt to do it today, but in a world where we have less consumers every day than we have more.

We don't have an economic model built for that, especially in commodities. We do have local consumers, and we can create new markets by offering new products or old products new again, or old markets new again. And that's what we're attempting to do. But I would say this, if you're a farmer, I'm going to promote a pro— I'm going to promote a project here, and I'm not going to be shameful about it. You need to enroll in TPAP or program like that put on by Texas A&M. You need to understand your operation, your succession plan, and you need to understand your financial position today. We did the exercise after we went through Unit 1 to put this slop drying facility in, and we wanted to go out 3 years, 5 years, and 10 years to figure out when we go bankrupt if we spent the capital we had on this project versus somewhere else.

And we had our accountant put in the rolling averages for a bad year for the last 10 years, and then do the same thing from years 1998 to 2008, basically mimicking what happened pre-ethanol. We didn't make it 18 months, we were bankrupt. Late 2024, November, we actually got the numbers and we got them wrong. The economic numbers that were coming out of the marketplace were much worse than the metrics we used. And we're thankful we changed course at that moment. And we shifted capital into another direction that's got us where we are today. And we're looking at the future saying we still have to make changes. That's why we have the autonomous tractor. We returned $400,000 back to operation by selling equipment we didn't need, using technology that, that can do a lot of that for us for a lot lower cost. Lenders are going to have to play a big role in this transition.

I'm not sure how they get committee members or board members or presidents on board with that. But regional banks are going to have to really take a hard look at the operations they're funding and offer some type of incentive partnered either with SBA or some other farm USDA government program to get farmers to change course. I think the subsidy money that Trump's been putting out could be really well used by developing markets, not buying iron. But, you know, do what you want to do. I think in 2030, we were going to see a change and shift. And I really do think that, well, these tariffs just pulled it forward 4 years. And we're staring at the change in agriculture. I think we got one really good run left in us. I think we got a good bull market probably coming up. I was thinking maybe '27, it could happen later this year. It won't be weather, it'll be demand driven.

But after that, I don't know. These cycles seem to be more erratic and fundamentals don't play a role anymore. Everything's running off a technical market. It could be AI influencing the speculative space. It could be 1,000 other things. The truth is the consumer is completely detached from the use of commodities unless it's a chip. And because of that, the entire S&P 500 right now is completely weighted on 4 companies. You take those 4 companies out, we're in a recession. So yeah, if you're listening and you're wanting good news, the good news is there's opportunity in crisis and chaos, and I would start looking for it.

Shay

Foulk: Yeah, I think that's a great message. And I want to lean into what you suggested there. So for those that didn't catch that, TPAP is the Executive Producers in Agriculture program put on by Texas A&M University. Mark and Emmy will be more than happy that you gave a promotion here. And we told them that we would help with a little bit of promotion this year too. It's a— I mean, what would you say? It's an outstanding week of just intensive brain racking around how do you manage your business? How do you think about the opportunities and challenges in agriculture? How do you get hyper-specific about how you run and manage your business. It's top notch. It's open to, you know, roughly 100 attendees per class. So there's Unit 1, Unit 2, and it's put on in January on an annual basis in Texas.

Anything else that I missed there that you think is critical for people to understand about the TPAP?

Quint

Pottinger: It's 7 a.m. to 9 p.m., 5 days a week, and it's a full agriculture master's course. One week.

Shay

Foulk: Yeah, that's a great way to put it. So if you have not attended TPAP, you probably know someone that has. It's probably someone that's doing really good things in their business and moving towards success. So thank you for sharing that. And Quinn, I've really just appreciated the conversation. I think there's more discussion needed on the out-of-the-box thinking in agriculture. And when I say out of the box, I mean, this dynamic that we're in, that we find ourselves in, you've referenced several times of the commodity agriculture that's existed since the 1970s. That's been a 50-year run. You know, where are we at in the next 50 years? I think it looks drastically different.

I think people that are, you know, reaching out and probing these areas of crisis and chaos and how do we get back to the foundational roots of what's important to your local community is probably the long-term sustainable play. And I'm excited, I'm excited to follow along. I guess that's probably where I would end it on my end. I'm excited to follow along and see how things go for you.

Quint

Pottinger: Thanks for having me on. Um, we're gonna make another big announcement here, uh, at the end of the month, and we're looking forward to it. And once we make that announcement, I think everything else will become more clear about what we're doing.

Shay

Foulk: Awesome. We'll have to do a follow-up then. How's that sound?

Quint

Pottinger: Yeah, that'd be good. I could talk about everything at that point.

Shay

Foulk: So, so you're active on X, you have KentuckyAF.com for Affinity Farms. Anywhere else that people should follow along with what you're doing?

Quint

Pottinger: Yeah, no, we're just, we're on X, we're on Instagram and we're on Facebook. Follow along, you know, throw some hate my way. A lot of people have.

Shay

Foulk: All right. Hey, Quentin, appreciate the time. Thank you so much. Yeah, thanks. And thank you everyone for listening to another episode of the Ag View Pitch, and we will catch you next time.