Ep #07: Bridging the Gap Between Farmers and Investors with Steve Bruere
How is farmland ownership evolving in today’s market, and what role do investors play in that transformation? In this episode of The Land Ledger, Brian Kearney sits down with Steve Bruere, President of Peoples Company, to explore the dynamic shifts happening in farmland investing. Steve shares his insights on how institutional capital is reshaping farmland ownership and the innovative approaches his company is taking to support both farmers and investors. From the growing demand for farmland as a stable asset class to the creative structures that make ownership more accessible, this conversation sheds light on the forces driving today’s farmland market.
Tune in as Brian and Steve discuss the surprising impact of technology on land management, the challenges of generational transitions, and why farmland is becoming an increasingly attractive investment for both seasoned and first-time investors. Whether you're curious about the future of agriculture or looking for smart ways to diversify your portfolio, this episode delivers valuable takeaways you won't want to miss.
Listen to the Full Episode:
What You’ll Hear About in This Episode:
Steve’s background and how Peoples Company has evolved over time.
The increasing interest in farmland investing.
Farmland as an asset class and its appeal to investors.
How farmland can be used as a diversification strategy.
Institutional capital in farmland and its challenges.
How Peoples Company is making farmland investing more accessible.
The challenges of generational transitions in farmland ownership.
Current trends in farmland investment, and the future of farmland investing.
Ideas Worth Sharing:
“I've always said there's two types of people in the world: people who own farmland and people who wish they did.” - Steve Bruere
“It's not that our ideas have been that amazing. It's just that it was solving problems that needed [to be] solved.” - Steve Bruere
“ We've worked really hard on building our national footprint and have put together an incredible platform of collaborative professionals across the United States that are collaborating on farmland transactions.” - Steve Bruere
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Read the Transcript:
Steve Bruere: I've always joked around through the years. I offer a money-back guarantee on all the farms we've ever sold because nobody ever wants their money back. Like once you discover the asset class, people realize, “Yeah, this is where I want to be.”
Welcome to The Land Ledger podcast, where investing in farmland meets the future of finance. I’m your host, Brian Kearney, here to guide you through the untapped potential of farmland as an asset.
Whether you’re already investing in farmland, want to invest in farmland, or you’re just curious about safe alternatives to stocks and bonds, this is your space to learn, explore, and be inspired.
Your journey to farmland investing starts now.
Brian Kearney: Steve, welcome to the show today. Thank you for recording this on New Year's Day. Excited to dive in. You can always tell when you're meeting with a real estate guy because they'll meet at any time. So excited to dive in.
Steve Bruere: Yeah, no, I appreciate you accommodating the New Year schedule. So I was looking at your options for when we could do this and I was excited to see that you had New Year's because I didn't have anything scheduled so.
Brian Kearney: Oh yeah, no, I appreciate it. I have a bit blocked off because we're coming to your land expo and in a few weeks, which I'm excited for, and I'm sure we'll talk about that a little bit. When this airs, that'll be potentially happening the day before this airs. But what I want this conversation to kind of focus on is I want to learn a little bit about your experience.
And I think that'll help our audience to know a little bit where you came from before we dive into the kind of meat of the episode, where we dive into the investment side of the asset of farm ground. So it's a good place to start is you grew up in Iowa. Tell me a little bit about that and how you got into this space.
Steve Bruere: Yeah, no, grew up in Warren County, Iowa, just south of Des Moines. So my folks were pioneer seed corn dealers. My grandpa ran the Ford New Holland dealership in the county seat town where I grew up and then my dad and brother farmed together today, and so grew up very much in the middle of agriculture and was very involved growing up in the farm and the seed business and always loved farmland growing up.
And I always joke around with my grandpa owning the Ford New Holland dealership. My folks, like a lot of farmers like paint and like horsepower and toys and that sort of thing and I was always trying to encourage them to buy more farmland growing up and easier said than done. As a kid that when you don't fully understand the equity requirements and whatnot, you can want that, but does it necessarily align with what they need to do and their operation? And so anyhow, I went to the University of Northern Iowa and Cedar Falls to college and graduated in 2003. But while I was in college, I actually bought my first piece of land on installment contract with my girlfriend at the time, who's my wife now.
And so it started to really kind of get that love of real estate at a pretty early age. And I got my real estate license while I was in college and had an opportunity to come work for Peoples Company, which had just gone through an ownership transition the year I was graduating. And so my real estate professor at UNI, I was neighbors with a gentleman that bought the firm in 2002.
And a lot of people think I started people's company, but I didn't. I actually started out as the farm management department for a bank in Indianola, Iowa and we were spun out of the bank during a bank merger in 1972. And that's when we are incorporated as Peoples Company, and if you follow that original bank charter through, it would be part of Regions Bank today.
And we've been independent from the bank from ‘72 on. And so a couple of years ago, we celebrated our 50th anniversary and I had an opportunity to take over at a pretty young age coming into the business in 2003.
Brian Kearney: Wow, that's fascinating. I don't know if I've talked to many people who bought their first ground while they were still in college. Tell me a little bit about that. That's fascinating.
Steve Bruere: If you drove by the piece, it's maybe not quite as fascinating as it sounds, but we, I had a little sweet corn patch and pumpkin patch growing up and we had a neighbor that would save his grocery bags for us when we're bagging up sweet corn, he'd give us those bags.
So when we were picking sweet corn, I'd always take over corn to him. And yeah, his name was Jimmy Dean, and took over a dozen years. And he asked what I was going to school for. And I said, “I'm getting into real estate.” And he said, “Hey, when you get out of school, I have a farm you can sell for me.”
And I'm like, “Well, which one?” And got talking about it. And after I left his house that day, I went and drove by it and I called him back and I said, “Hey, if you'd sell that to me on an installment contract, I might be interested in buying it now.” And it was 24 acres, a small piece paid $45,000 for, I was actually explaining this to my kids over Christmas.
So we put $8,500 down. And again, I don't know if my parents thought it was a great idea. I know my girlfriend's parents at the time, wife now, I certainly don't think they thought it was a good idea, but we pulled our money together and she put up half and I put up half. And so we scrounged up the 8,500 bucks and bought it on an installment contract, no idea how we'd make the next year's payment, right?
So that was probably the more interesting thing, but what was interesting about it is it was one of the first deals I did. And when I got in the real estate business, the market had appreciated and I eventually sold that farm for 165,000 and so what's cool about it, and this was the life lesson I was trying to explain to my kids over Christmas, $8,500 to buy a $45,000 piece of ground that with, $165,000 and so that 8,500 turned into a fair amount of equity and then that's kind of what set me up to go buy the next farm and then the next farm and so got to start somewhere and that's where I started.
Brian Kearney: Yeah. How did you make that next installment payment if you weren't sure how you're going to do it?
Steve Bruere: The pumpkin patch and the sweet corn patch. So, yeah, we hit it out slinging sweet corn and pumpkins and rounded up enough cash. And she was working for Wells Fargo and we scrounged it up and got it done.
Brian Kearney: Wow, that's awesome. That's a cool story. Perfect. Yeah, that helps learning a little bit of that and then what did Peoples look like when you got there? Because I know just from reading, it's pretty different today than it was at that point.
Steve Bruere: Yeah, we had that nice long history. So growing up, my folks farms and farms of Peoples Company managed. And so Dick Davitt was the farm manager that was there when I started. And then Bob Fridley was the broker at the time that was running all the brokerage activity. And so Dick's managed farms, Bob sold farms. And when I started, we had four listings for sale in Central Iowa. And a small farm management portfolio that was all primarily Central Iowa.
And it was pretty typical of a lot of the county seat real estate companies that you'd see around the country that would serve kind of that, two or three counties and would do a little bit of everything, some houses, some commercials, some farmland. So yeah, that's what it looked like when I got started and I started ram, run things around and that was also when a lot of the tech stuff was starting to hit. So when you think about the original acre value and online assessor websites and drones and agri data for digital soil maps and plat maps, and I feel like I'm a pretty young guy, but when I got in the real estate business and I know I'm telling the young guys in the office, like hey, I used to have to drive to the county assessor, drive to the recorder, drive to the auditor, drive to the FSA office, the old soil books, you'd get the soil books out and you'd have to do your own weighted average CSR or in CCPI or whatever. And so it wasn't that long. I mean, it was 20 years ago and it was a lot harder than it is today to be in the farmland business. And so to put a farm on the market 20 years ago, it was like an all-day driving around and, in a matter of minutes, you could pull all the stuff together.
Brian Kearney: Absolutely. Every once in a while, you'll find a, county assessor that's a pain to work with, but usually, it's pretty okay.
Steve Bruere: Yeah. There's still a few out there, but by and large, it's completely revolutionized now.
Brian Kearney: Yeah, absolutely. And what size are you all at today? How many brokers do you have?
Steve Bruere: That's a good question. We actually have been on a little bit, we acquired four or five firms here at the end of the year.
So those numbers are changing. I haven't internalized in my head what that looks like, but we're, we work in around 35 states now. And so our brokerage team's licensed in 35 states. I know we manage farms in 25 states, do appraisal work all over the country. And so when you look at our offices, we have an office in the Pacific Northwest that serves that region.
We have an office in California that serves the California, Arizona region, three offices down the Mississippi Delta, an office up in Michigan that serves the Lake States, and then several offices throughout the Midwest, Nebraska, Illinois, Iowa, Missouri, Minnesota.
Brian Kearney: Yeah. Wow. And I think if you talk to people in the industry, the biggest differentiator between people's and some of the others is some of the investment side where there's a little bit of that focus. Is that something that you tactically did? You decided we are going to have more of an investment side as well along with the farm management or is that just come naturally?
Steve Bruere: Yeah, it's a hard thing to explain to people because sometimes people think Peaples Company is investing in farms and that couldn't be further from the truth, right?
And that's what is a real delicate thing when you're in the farm management and brokerage business, that people understand that's not what we're doing. But when I first got in the business, I always use the example, my brother was farming several thousand acres. Again, his capital was tied up in the machinery, the grain set up, the shop, all those sorts of things.
And his working capital went into inputs every year. And he called me up and say, “Hey, the Ben's farms for sale or the newly farms for sale.” And of course, these are farms. I grew up, running the grain cart or whatever. And so I would go find an investor to go acquire those farms. Investor got an off-market deal.
My brother retained the acres. I made a lot of money for putting the deal together. Everybody was happy. And started to kind of think about how there's almost an expectation that if somebody needs access to, like if you're an investor and you want access to farmland, who do you call? And I started to get those phone calls in the office and you'd see a New York investor flying into Iowa and coming to a farm auction and they're getting wiped, completely beat out by several thousand dollars from where they wanted to buy it at from a local farm, where they'd fly home empty-handed. Well, they do that two or three times and they get all disappointed. But then on the flip side, just like guys like my brother would call and say, “Hey, this farm's coming up for sale. I'd like to continue to farm it. I don't have the capital to buy it. Could you help me put that together?”
And so I started to think about what that business model would look like in terms of connecting capital. And to your point, really, I haven't seen anybody in the farmland business come out and really just create that platform of connecting capital with opportunities.
And so that's where our capital markets group originated from. And so we've got a dedicated team that works on acquisitions for people that come to us and say, “Hey, I want to acquire farmland to invest in.” And so we'll connect farmers with capital and it's not our capital. It's somebody else's money. And so we do the acquisition work and the due diligence work and the ongoing farm management work on their behalf.
And what I've found is we've got great relationships with our farm operators on our managed farms. They source a lot of deals that they look at us as a resource. It's not a competitive relationship. They're coming to us saying, “Hey, I need capital for my operation. Can you make that connection?” And the capital is looking for somebody who can help facilitate this.
And so, yeah, it is a differentiator. it's taken a long time for it to kind of evolve into what we're calling capital markets now, but I think it's a big part of the future. And I always say in an ideal world, a farmer would buy every farm thing they own or that they're farming and you wouldn't need that.
But that's not the reality of the world's like Iowa, 60% of your farmland’s non-owner operated, meaning somebody else owns what you're farming. And so in Iowa, there's over 300 billion worth of farmland. So 60% of that's being farmed as rented land. It's just not practical to think that a farmer is going to be able to buy all those acres in their operation.
Brian Kearney: Correct. Yeah, there's no way. Even the 40% down payment is just not feasible for many, many farmers, let alone buying cash. There's no way. So yeah, that makes sense. When you're talking to those investors, why are they investing in farm ground? Because you hear farm ground's put into kind of the alt space and it's like, “Well, why would you buy farm ground if you could buy a multifamily that's doing 20% IRR or you can buy private equity or venture?” Why are they buying farm ground?
Steve Bruere: Yeah, I mean, that's one of the cool things about our business is you get to meet people that have achieved success in a lot of other business environments. And I've always said, there's two types of people in the world, people who own farmland and people who wish they did.
And once you've achieved all else in life and you've sold your business, a lot of these entrepreneurs, a lot of them have some rural background or some rural connection, whether it's hunting or it's farming or whatever it may be. And so parking their wealth in farmland is where a lot of them want to put their wealth.
And so you get to spend time with a lot of these people that have made a lot of money in other businesses. And so I asked them why farmland. And when you look at farmland statistics, if you will, it's non-correlated with public equities. So it's a great diversifier for them. It's positively correlated with inflation.
So as goes inflation, as goes farmland. And they can see risk, but the publicly subsidized crop insurance system, you always know that there's going to be a farmer who will farm your ground and pay rent. And it may go up and down a little bit, but it's not going to be a zero where you see commercial real estate. You lose your tenant. You still have ongoing property taxes and insurance and maintenance. And in farmland, you just don't have that vacancy issue. So when you look at it, it's really a no-brainer. And then you start to get your hands around the long-term financial performance of farmland. And you've got your cash yield and your appreciation and in Iowa, your 20-year appreciation rate's close to 8%. And so you take, people look at it and say, “Well, the cash yield's two and a half, why would I do that?” And it's like well, 2.5 plus 8, that’s 10.5. It’s pretty good.
Brian Kearney: And that's better than the stock market over 20 years.
Steve Bruere: Yeah, absolutely. I've always joked around through the years, I offer a money-back guarantee on all the farms we've ever sold because nobody ever wants their money back. Like once you discover the asset class, people realize, “Yeah, this is where I want to be.”
Brian Kearney: Yeah, that's good. I like that. Where do you think it's going in the future? You hear every year that the farm industry is going to have the worst year it's ever had. And it seems every year that's the narrative.
And every year we get the plants in the ground. We're harvesting, we have bad years and good years, but on the whole, it trends upward. Would you say the same thing is likely with farm ground in the future, even with these narratives of tariffs and all of that, do you still think it's a good investment?
Steve Bruere: I mean, every year of my career, I thought farmland was too expensive. I mean, and I'd sit around and then every year it gets a little more expensive than it was the year before. And everybody talks about how the trend can't continue. And we have all the RMA actuarial data from crop insurance for all the counties in the US and so by top crop.
And so like in Iowa and Illinois, almost every county in Iowa, Illinois, your trendline yield for the last 50 years is two to three bushels per acre per year, so you bought a farm 50 years ago, you're getting anywhere from 100 to 150 bushels more per acre and people think, “Well, how can this farmland appreciation continue?”
And it's like well, in commercial real estate, you have a depreciating asset. Generally, that building is losing some of its value every year from the depreciable nature of it. Farmland is a natural resource that if you take care of it, it's going to continue to appreciate and produce more year in and year out.
And then you start to think about all the externalities. And I saw this really during COVID, people started to really appreciate the non-financial benefits of farmland, the ability to hike, garden, camp, whatever you want to do on it. And so I think that's probably an area that's underappreciated is the non-financial benefits.
And then you have all this other stuff now with carbon, with wind, with renewable, solar. And if you buy a bond and your bond yields 4%, like that bond is going to be that bond and there's nothing that's going to happen to it, right? You buy a farm and somebody may knock on your door and say, “Hey, I want to build a battery storage facility here. I want to put a wind turbine on your farm, or I want to run a pipeline through your farm,” or whatever it may be. And then in the meantime, your yields are growing every year on it. And it just, all of a sudden, everybody, the day you buy a farm says I have no idea how I'm going to pay for this, like you always feel bad.
The day you buy it because you get that remorse, you know, “I just made a crazy decision.” And then you get about four or five years in and all of a sudden it's kind of working out. And it's a hard thing to explain. People don't really necessarily have a good way to articulate it. And I've been around it enough to kind of understand how to articulate it all better than some people.
Brian Kearney: Yeah, that is very true what you said about the farmland prices because my family sold kind of our last acreage before I was born. $3,500 an acre in Central Illinois. I'm like, man, that really hurts to think about now, but back then it was top dollar. Like it was pretty good price 29, 30, 31 years ago. Now, man, that looks like a bad sell, but that's how it goes.
Steve Bruere: Now, hopefully, they put it in Bitcoin or something that's worth a lot of money, right? Like that's the key.
Brian Kearney: Yeah. No, not quite. Wouldn't that have been nice. Yeah. So tell me a little bit more about the kind of relationship between investors, farmers, and Peoples. Like, how do you navigate that? So it's kind of fair on both sides because everyone is probably going to complain. And probably the investors are going to complain that you're trying to get too high prices. The farmers are going to be complaining that you're getting in the way of the relationship. There's going to be a lot of complaints there. But how do you work on really trying to make that a good deal for everyone involved?
Steve Bruere: Yeah, that's a great question, and I was actually talking to one of our brokers last night about this because we're really proud of our brokerage team and our ability to get great prices and conduct auctions that give great financial outcomes for the sellers. And when we're hired by a family to sell their farm, their expectation is that we're going to do everything in our power to get the highest possible price for that farm. And that's exactly how we tackle it. Well, when we're communicating with capital sources that say, “Hey, I want to put money into farmland.”
They want to get the best deal that they can get. And I always tell them like, “Hey, anybody can go out and buy a farm at retail for you. Like you can go hire anybody to go do that.” So on the capital, in our business, the segmented too, and that's kind of a unique thing. So if you're an appraiser, Peoples Company, all you do is appraise.
And if you're a manager, all you do is manage. And if you're a broker, all you do is man or broker deals, and then our capital markets is completely siloed from those three businesses and our capital markets team is not out buying Peoples Company listings and it completely makes sense, right? We're trying to get a good deal for the capital source and we're trying to get the top price.
And so those shouldn't cross over. And this sounds a little, I don't want to sound the way it's going to sound, but there's no other way to say it. There's a lot of people that don't do such a great job selling farms. And so we look for those opportunities and there's a lot of them out there. And you've got a 4 trillion asset class nationwide.
And two to 3% of that turns over on an annual basis. And because of that, there's a great opportunity to find deals that are mispriced. And I tell people that farmland's the last great place of arbitrage on earth. And there's a lot of pricing inefficiency and, but a lot of deals come to us too.
A farmer's like, “Hey, I just, I need to sell this ‘cause I'm going to, I want to keep farming it, but I want to buy this 80 up the road.” And he's like, “I'm willing to take a little less than market ‘cause I want to continue to rent it back.” And it's okay, we'll go do a sale-lease back for you. Or, I mean, there's just all sorts of scenarios that happen, but the one that doesn't happen is us trying to take advantage of a client that we're selling a farm for. And if you did that, then you'd quickly be out of business. And so that's–
Brian Kearney: Word travels fast in this industry, and most, but particularly in this industry. That makes sense. Then with the two to 3% changing hands, do you think that's going to stay pretty steady or is that going to start to ramp up a little bit as we see the age start to, get a little bit higher every year?
Steve Bruere: Yeah, we go to a lot of the conferences that you would go to where everybody like that's in the pitch deck like, hey, demographics just that all this land's going to turn over and we say it too, but I've been saying it for the last 20 years. And yeah, so Mike Duffy used to run, he retired, but he started the land tenure study at Iowa State University. The Iowa legislature requires Iowa State every five years to do this land tenure study. And that's where a lot of the great demographic data comes from on farmland ownership. And so Mike was predicting his entire career. Farmland owners are getting older and there's going to be more land turning over.
And I remember congratulating Mike on his retirement and he chuckled and he said, “My entire career, I've been predicting that landowners are getting older and they are in fact getting older,” but he said they're living longer and more lands not coming to the market. And of course, people will live longer to a point and then they won't.
And so I've talked to Bruce Sherrick at the University of Illinois a great deal about this and I really don't think, maybe that 2 to 3% comes 3 to 4%, but it's not going to be meaningful change. You're not going to see 10% and a lot of that land is going to get past family members, get sold to neighbors, get sold to the farm tenant, and I don't think it's going to change the supply of land on the market at all.
Brian Kearney: Yeah, that makes a lot of sense. But even 2 to 3 to 4 would be a not insubstantial growth when you're talking about an asset this size, even if it is that small of a shift, which is interesting. Yeah, that makes sense. What would you say to someone coming into this industry they need to look for in their broker? Because you said there's differing levels of quality in every industry, but what questions should they be asking if they have a farm they want to sell or they want to buy a farm from the person they're talking to?
Steve Bruere: I'm biased, obviously, but we've worked really hard on building our national footprint and have put together just a really incredible platform of collaborative professionals across the United States that are collaborating on farmland transactions.
And too often I'll see people, and we just lost a deal, and it just makes me sick because I will compete against people. And a lot of your clients are completely focused on the fee only. And yeah, when you're doing these farm auctions, you'll open the bidding up in thousand-dollar bid increments and it'll be 10,000, 11,000 and next thing you know, you're at 18,000 an acre.
And if you have the right people in the room in that competitive bidding environment, one extra person in the room can make a two or $3,000 per acre difference in terms of the value of the farm. On a $15,000 an acre farm, a 1% commission difference between somebody who does a great job and somebody who doesn't do a great job could cost you two or $3,000 an acre.
And so I think when you're hiring somebody, you want to hire somebody that you have confidence that they have the ability to execute a marketing campaign. And it's actually a little disheartening sometimes because I, it's gotten pretty easy to sell farms in the Midwest. There's so much generational wealth.
There's so much demand for farmland. I've said a monkey can sell a farm in the Midwest because when you have the neighbor dynamic, poor neighbors on each side that all need to own the farm, no matter how good of a job or how bad of a job, like sometimes you just can't influence the outcome.
But when you have these environments like we're in today, where maybe those neighbors aren't quite as flush, or maybe they just bought another farm and their capital's tied up and people aren't fighting over farms, and you just don't know when that dynamic's going to be. Like, I think, the thing that we bring to the table is the fact that we're hustling.
We're doing the local boots-on-the-ground work, but we're also doing the national marketing campaign, social media and the newspaper ads. And plus we have this robust investor network that we work with. And so most of these farms are generational farms and you only get to sell it once.
And so when you go to sell it, you want to make sure that whoever's representing you has turned over every stone and made sure that every possible buyer is aware of it. And there's an art to it too in terms of how you parcel it out. And we go to so many sales that people screw things up and that's on the capital market side.
That's what I'm saying. I mean, when there's people that are notorious for screwing things up and you get excited because you'll be like, God, I know what I'm doing. Saturday morning.
Brian Kearney: Yeah. No, that's true. I went to an auction and when I saw how they were doing it, I'm like, “This is going to be awful.” And it was a no-sale, yeah, kind of what you'd expect. But anyway, that's very true. What about on the investor side? What questions should they be asking?
Steve Bruere: Yeah, so the unique thing about the way our business is set up where we have regional geography to the business, there's very few firms like ours that can talk to you about a California almond and pistachio deal on a wine grape deal and in the Pacific Northwest and rice and cotton in the Delta and apples in Michigan and corn and soy in the Midwest.
And so I think it's interesting, this asset management industry is full of a lot of folks that have started businesses that are based in New York or San Francisco or Boston or wherever it is. And so these asset managers, sometimes there's some really great people at those firms that understand agriculture, but for me, we're in it day in and day out.
And it's so easy to get hometowns in this business by folks that lead you down the wrong pathway. And so I think having somebody represent you that has extensive knowledge, and I've got a great background for farmland, but people try to pull the wool over our eyes all the time and you got to sniff it out. And so if you weren't aware of what to sniff out, it'd be pretty easy to get taken advantage of.
Brian Kearney: What is your thoughts on the ag tech space, a company, Peoples been around 50 plus years? You've probably seen a lot of people in this space come and go. I mean, this is a purely selfish question. What would your advice be for a startup in the space? So that it's big enough space for everyone and no one needs to be adversarial. We all have to kind of work together. What would your advice be for the startup to not make the mistakes other startups have made in the same space>
Steve Bruere: Yeah, great question. So whenever somebody starts up in this tech space, like I've made a point of trying to get to know them. And there's a lot of people that have this idea that they're going to come into farmland and disrupt how farmland behaves, right? And it's a kitchen table business and we're a long ways away from farmland not being a kitchen table business.
And so we've made some extensive commitments to different tech platforms and I can say that we've tried to work with everybody that has come into this space and I've thought every one of them, frankly, going back to when I got into the career and I was sharing this with somebody the other day.
Growing up, I thought I was going to be an Ed Jones broker. And then internet comes along, all of a sudden E Trades out there. And I'm like, there's no way Ed Jones is going to survive this. People can go online and place their trades on E-Trade. You don't need that Jones broker. Well, here we are 25, 30 years later and Ed Jones is doing just fine.
Brian Kearney: Yeah. Bigger than it's ever been.
Steve Bruere: That's right. And so. As I've watched this tech stuff, I think the thing that a lot of the FinTech startup types miss is that there's a lot of really entrenched professionals that have been in this for a long time that have those relationships. And there's a lot of people that are skeptical in the farming space of anything other than those long-term relationships.
And I've seen a lot of money, venture-backed money come in and back a lot of these startups. And, every time I see it, “Hey, so and so raised 10 million. So and so raised 40 million.” I'm like, this is the one, they got a good model. They're going to put us out of business. And then inevitably they blow through their 20, 30, 40 million dollars they raised, they didn't get a viable service launched. And we've been able to acquire some of the firms that that's happened with too. So I think our view has been that these tech tools can make our people better at the kitchen table. And if we can make our professionals better at what they do, then that's the right angle versus trying to come in and think you're going to turn the industry upside down and change the way it's done.
And so that's where my bet is. But somebody somewhere along the way will come up with something disruptive, but it's so hard to set up the national footprint boots on the ground and farmland is getting more complicated, not less complicated. And so the ability to understand wind and solar and carbon and sustainable initiatives and crop insurance, that's going to be a pretty hard thing for anybody to come in and disrupt long term.
Brian Kearney: Oh, yeah, absolutely. That's a couple of things that brings up my first job out of college actually was an Ed Jones broker.
Steve Bruere: That's funny.
Brian Kearney: So it, it's a great firm still is it was doing well, but it wasn't a fit for me, but a great firm and they built themselves on the relationship side. And it still will be, it always will be. That is their bread and butter is small-town door knocking, which I didn't think would work like, why is someone going to trust a 22-year-old with their million-dollar retirement, but they do. If you're honest and you've got the brand behind you too, they're like, “Okay, we'll take a shot.”
Steve Bruere: And true. Yeah.
Brian Kearney: Yeah. And then that also goes to the heart of what you're talking about. It is, it's a relationships business and sales really should be relationships for every industry.
Typically not, but it should be, but here it has to be. If you're trying to just be numbers-driven, man, you're going to have a tough time with this industry. You have to be numbers-driven, but that can't be what your North star is. Your North star has to be, “Hey, if I don't screw over this farmer, it's going to work out in the end.” And that has to be your North star. Everyone has to be treated right or things go south.
Steve Bruere: Yeah. And we're not immune from it. I mean, when you think about these transactions, if we have an auction, and there's one person who's going to walk out of the room that day, and that's going to be the winner, right?
That won the auction. And in some ways, they think we've set up this competitive bidding process. We forced them to pay too much for it. So while they won the auction, they may not love us. And then everybody who didn't win the auction is like, “Gosh, they brought that guy in and he bought it.” And now they don't love us.
And then if the land market goes up 20 percent the next year, the seller's, “Hey, you guys advised me to sell the farm at the wrong time,” right? And so even when you do everything exactly perfect and handle your business completely right, you still have a lot of reputational headwinds in this business. So if you're doing the shady stuff on top of it, it gets, like it's even harder. Yeah.
Brian Kearney: Yeah, that's for sure. That actually brings me to a question. How do you, in the auction environment, make sure people know it is a fair auction? Because I'm sure you hear all the time and I know every time I go, almost every time I go to an auction that is live and virtual, they're like, “Oh yeah, bid came out of nowhere. Weird.” But how do you kind of get ahead of that? So that they know, “Hey. Look, we're not going to be putting in fake bids because what happens if that bid wins, first off,” but how do you get ahead of that?
Steve Bruere: Yeah, I don't know. I don't know if you can because you're just always going to have the skeptics that–but since COVID, like online auctions have become, in some ways like the norm, and some of our competitors, they're not even doing live auctions anymore.
And so I know, I've seen, we've been to auctions where I don't know if there's complete integrity there for sure, but you only get to kind of do that once, right? ‘Cause the minute that you push somebody and then you're the last bid and now all of a sudden the auction house has to go inform everybody that.
And so that goes back to word travels pretty fast. So at the end of the day, we get jabbed by people that are like, “Hey, how do I know who's on the other side of that?” And it's like, “Well, you gotta kind of trust that we're reputable firm and we're doing the right thing.” And, no, that doesn't mean that we're not working really hard to go find somebody to bid against people. And that's where I think at the end of the day, like you got to know what you're comfortable paying for the farm and don't get caught up and worrying about who the other player is. But ‘cause like now there's a lot of farmers that are sitting there, like they'd rather bid on the app, like the same people that maybe five years ago would be complaining about it.
They're like in the combine now bidding in, or I even see people that are bidding on the app in the auction, because they don't want everybody in the room to know they're even bidding and so–
Brian Kearney: That's exactly what I was going to say. Yeah, you definitely, you see that. And everyone knows in the local area, the one person who they walk into that room and the price just went up $5,000.
And if they don't have to walk into that room, they prefer that. It's better for everyone. And then vice versa. It's better for your clients, I imagine, because that person from New York doesn't have to fly in. They can just take it from their laptop and know exactly what they can pay. So that makes sense.
Steve Bruere: I remember when one of our first online auctions ever, and it was, this is like Decatur County or Wayne County and the Samish family comes in with the horse and buggy to the auction. And we have our guy running the remote bidding up front and somebody from Florida who had never seen the farm, only had seen it online, watched the drone videos of bidding against the Samish family.
And the guy from Florida ended up being the successful bidder. And I just thought about that quite a bit. Like the guy from Florida who'd never seen the farm bidding against the folks on horse and buggy, and that's the world we're in.
Brian Kearney: Wild industry that that's the case. I can't think of another industry where that might be a similar juxtaposition there. Perfect. Yeah, no, this is, this has been great. We're. We're coming up on time. I don't want to take up a whole lot of your time today. Let you get back to it. But the last question I like to ask is if you were young and looking at the industry again, where would you go? Would you go back into brokerage?
Would you go into one of these other ag tech sides? Would you do it all over and become a farmer and grow your acreage and that way? What would you do if you were restarting?
Steve Bruere: Yeah, depends on the day they ask, but no, I'm really blessed to have had the opportunity that I've had to come in, take over a firm that had a long history, and have a group that would allow me to ramrod around some things and have that connection with agriculture growing up where you have that background. And I tell people, because people have watched our growth and make comments like, “Hey, it's really impressive.” And it's like our industry was ready for some fresh ideas. And so it's not that our ideas have been that amazing.
It's just that it was, you know, just solving problems that needed solved. And so when you look at the footprint that we've put together, the ability to do business nationwide, and we're getting ready to announce a new alliance with a couple firms internationally as well from the UK and from Australia.
And this world's getting more global and there's more interest from all over the globe and farmland. And there's capital in the US that wants to go to South America. And there's capital in South America that wants to come to the US and people are looking for diversification. And so for me, I think about our business and I think farmland is the greatest asset in the world.
There's not a better asset. I'd debate that with anybody. And I think American farmland is the best farmland in the world. I would debate that with anybody. And then I happen to live in Iowa that has some of the best farmland in America. And so I'm blessed and love the career path that I took. And if I had to do it all over again, I would probably do exactly what I'm doing now, to be honest with you, there's a few decisions I'd take back. And, but it's all kind of gotten us to a point where it's a pretty unique business to be a part of. And the people you get to meet, I get to beat around in trucks with people that you just would be shocked that you get to hang out with people that, and it's because they love farmland.
Brian Kearney: Yeah, absolutely. The people in this industry are the best I've been around. And yeah, I agree with everything you said until you got to Iowa. It's man, it's hard to say that Iowa has better ground than Illinois, but it's an internal debate within our company, but we'll say as good on each side, we'll do that.
Steve Bruere: I think the political environment wouldn't mean that Iowa trumps Illinois.
Brian Kearney: I can't even debate that.
Steve Bruere: No. And so when you, that's the thing. And I love Illinois. There's awesome farm ground in Illinois, but the political environment gives us the edge.
Brian Kearney: Can't even argue with that part.
Steve Bruere: And it's interesting too. I mean, that plays into things like getting manure management plans approved for livestock facilities and property tax rates. And you see it all the time. Nebraska and Illinois, the property taxes, Minnesota are all substantially higher than Iowa. So you take a farm on the Iowa-Minnesota border.
Same exact soil, different property tax rates in each state, different regulatory environment in each state, and where would you rather own the farm? You'd rather own it in Iowa. So I think I just won the debate.
Brian Kearney: Dang it. I think you did. Fair enough. Fair enough. Well, yeah, I appreciate you jumping on. This has been a great conversation. Love to have another one down the road as things start to develop over the next year. It'll be interesting to jump back on, see what has happened with the farmland prices. But Steve, thanks for jumping on the show.
Steve Bruere: Yeah, congrats on your business, and thanks for including me.
Brian Kearney: Yeah, thank you.
And that’s a wrap on this episode of The Land Ledger.
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