TFTC: A Bitcoin Podcast - #493: Fixing Big Ag with Jeff Smith

Episode Date: March 26, 2024

Marty sits down with Jeff Smith to discuss the state of ranching and the agriculture industry. Colorado Craft Beef: https://coloradocraftbeef.com/ 0:00 - Intro 5:05 - Bitcoin and ranching 13:37 - Starting Colorado Craft Beef 23:41 - Regulatory risk 29:04 - Taking care of the land 33:23 - Gradually, Then Suddenly 34:02 - Scaling in competition with large corps 39:00 - Orange pilling 55:34 - Weaponized fiat and food 1:00:34 - Competency crisis 1:12:32 - Yummy steaks 1:18:30 - Back to scaling 1:27:43 - Perspective and hope 1:32:59 - Wrapping up Shoutout to our sponsors: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠River⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Unchained⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Zaprite⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Bitcoin Talent Co⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Gradually, Then Suddenly⁠⁠⁠⁠⁠⁠⁠ TFTC Merch is Available: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Shop Now⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Join the TFTC Movement: Main ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YT Channel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Clips ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YT Channel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Website⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Instagram⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Follow Marty Bent: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Podcast⁠⁠⁠⁠⁠⁠⁠⁠⁠

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them to tftc send you and enjoy this rip okay you've had a dynamic where money's become freer than free. If you talk about a Fed just gone nuts, all the central banks going nuts. So it's all acting like safe haven. I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. Did you guys have a good time last night? Yeah, dude, we didn't get out of there till like 10 o'clock really and started at four uh yeah we got then started before oh yeah we got there at 1 30 and started prepping food uh cooked all day just served you

know meatballs with like 30 pounds of picanha we did a bunch of top sirloin and bottom sirloin and by the time it was all over then we did you know we had dinner for the boys so you know jocko leaf and all those guys were there so then it was like i don't know another 30 pounds of high-end steaks just to feed those guys because they did like a three and a half hour meet and greet with a line around the building so you know got everybody fed and then they had to bail and we got you know most of the mess cleaned up and back to the hotel about 10 30 it's a long day and then here within 10 hours how so let's give uh the freaks who are listening a some context what what was this event and how'd you end up serving beef at this event uh well you know i i one of

these days i'm gonna write a book and it's going to be called beef as a currency because much to you know you and the freaks it's like we need some intangible assets that we can move things around with and you know steak is a really good leverage tool for that and uh lave babin uh who co-wrote uh dichotomy of leadership and extreme ownership with jaco uh they just did a grand opening of a new jujitsu school in dripping springs and we saw that they were going to be doing that and they were flying jocko into doing meet and greet i said well man if you guys are all doing that and you guys are all investors in our company why don't we come cook steak and just hang out uh so it was really awesome i mean they they had grills ready for us like we basically

had to start fire and make a mess and feed some people and it's uh a return to what to what life should be yeah working out and eating beef yeah well it's it's the community mindset right whether it's the bitcoin community the ranching community um you know over the last number of decades people are so disconnected from agriculture they think food comes from the grocery store and they don't realize what it takes to get there uh so even at the event yesterday we had people who are like oh like oh so you're a you're the steak guy i'm like well actually we're cattle ranchers and we just take it all the way to steak and then share the message of that in a community type way and you know when you're hanging out in a community with the jocos of the world it

certainly doesn't hurt so yeah i mean that's the journey we've been on in this show the last three years particularly since i moved to austin it's really there's been a an aggressive intersection of the cattle rancher community and the bickling community i've had many ranchers on the show over the last three years and it's something that i was telling you on the phone on friday really honed in on is that there's these tracks of communities running in parallel whether it's the bitcoin community the rancher community but they have this innate understanding that something's wrong in the world bitcoin with the money ranchers like you that there's something wrong with the food and how it's um being produced and distributed to the end consumer yeah if you

look at the state of america we're not very healthy right now yeah i mean what i would say is uh you know, Colorado craft beef is our company and we can do things a little differently than the traditional producer or consumer would see from a steak standpoint. But man, even if you're going to the grocery store and buying beef, that beef is still healthy. I mean, if you go to a grocery store and you shop the outside of the grocery store, you're going to do pretty good. It's when you go down those center aisles with a bunch of boxed bullshit, you're going to have a little different health respect. Um, and on the beef side, you know, as much as I want to have decentralized food, that is a bandaid we should not rip off out of spite. We need to be careful

with how we do that because the big four, uh, that run 85% of the food industry in this country, in the meat space, if we turn them off tomorrow, we'll have big problems. Um, and that's one of the things we want to do is engage with the consumers and let them see you know to your point you know all these different streams run in parallel but they overlap a lot and we're trying to get people to understand where it all comes from so that we can make those meaningful changes without causing harm in the process now yeah it's very similar in bitcoin like if the banks were to fail tomorrow and everybody's like all right we're at a bitcoin center now probably would be chaotic and yeah insane and probably not end well at all but on the beef side completely agree as well you

can't just change everything every night it's going to be organic grassroots yeah well i mean the interesting math because uh you know my background i think the easy way to describe me is i'm an agriculture nerd i have i've worked on three different continents in ag across a lot of different verticals in the seed and grain space down to, I mean, the beer industry and the grain industry and the meat industry and seeing how all of it interacts and intersects is something that a lot of people haven't seen. And when I go through and I talk about this kind of stuff, what I'm trying to get people to see is the intricacies and the microeconomics that exist within ag and our local food supply. And there's not a one size fits all answer for everybody because a hundred

miles from here you get different rain you get different weather a thousand miles from here might as well be on a different planet and then if you start to intersect that with where feed for cattle comes from and everything else that's all dependent on what other systems operate in that area that aren't part of the cattle industry but they support the cattle industry and unpeeling that onion you know to use a private equity term that a buddy of mine taught me a long time ago he's like every onion's got layers you know and you've you've got to understand how they all work together you don't have anything yeah no it reminds me i worked at a fund out of college and we indexed commodity trading advisors and so i was an analyst and got i was baptized baptism

by fire like really coming to understand this from a macro point of view like we were trading wheat cattle oil coffee cocoa beans and learning at the young age of 21 like oh i have to be on top of whether or not there's a coffee fungus happening in Brazil that would affect coffee prices. Is it raining in Kansas? Is the red wheat going to grow this year? And if not, and then moved down to Texas, we had a big drought. And that was a conversation with the local cattle ranchers here

when we first started doing shows with ranchers. It was like it wasn't raining, and they were worried whether or not they were going to be able to feed their cattle off the land or if they were going to have to buy hay. yeah it was during covid so the supply chains were all fucked up there's it's crazy how little events whether it's weather or supply chain disruptions can really affect supply and then prices of of these markets oh for sure like three or four years ago uh you know we ranch in eastern colorado which sounds really far from texas there's only about five hours from the

texas panhandle and the texas panhandle had a drought their hay crop was was way down we didn't know it we weren't paying attention well the problem is with the way that the seasons work those guys know that they're going to be short of hay a month before anybody starts harvesting hay where we live so they drove up started buying up hay because they knew they needed to move it south and since they were ahead of the curve just based on timing we ended up having to buy hay from like north dakota because it just chased it all the way north and it's little things like that that now your hay prices go from 150 a ton to 270. it's just this little small incremental you know doubling of your costs and that happens ad nauseum across whatever it may be like during covid you

couldn't get steel fence posts because the foundries were shut down and somebody's like what do you do about that well it's not ideal but at least it's fence post you can get along without that you can't get along without feed for cattle um and just keeping on all of that is very interesting and that's where i think a lot of the the myopic view of the general public on oh steak comes from here i'm like well kind of but 27 other business verticals have to function so that state can make it to that point so what what led you to dry to start colorado craft beef so my wife is actually a fifth generation rancher um and if you're gonna marry as a man it's uh you know marry up and be the ugly one. So I took care of that. And, uh, in 2015, we moved back to the family

ranch in Colorado. And in that move, we were talking to Kara's dad who still runs the commercial ranch, uh, actually Colorado craft beef, uh, Kara and I bootstrapped, um, no family money behind it, no family assets behind it. Uh, we just put it together and just kept growing. And we were talking to Dave, my father-in-law, and the conversation was about succession planning and where the ranch was going to be in, you know, 30 years. And I'm a bit of a business dork. I understand his model just enough to be dangerous. And at the time I said, Hannah, do you think what you do is sustainable in the next generations?

And he's very much in the commodity side. He runs a lot of numbers. He does a heck of a job. He's forgot more about the cattle industry than most everybody knows. And he sees the writing on the wall and he told us, he's like, you have to find a different way. it's not for mismanagement or anything. It's just, the market is changing. This commodity driven model is rough. And then if you correlate that back to the banking industry, you know, the regulations are tighter. Capital is much tighter. Collateralization is much tighter.

So if you make an error, you may not come back from it. And then you get all the banks on the side, they cross collateralize everything. Oh, you have a cow loan. Perfect. Well, your house in it and your vehicles and everything. From our business standpoint, we've siloed everything off with LLCs and even the banks don't like that because now they don't have you by the short hairs. And we started looking at like the return on capital investment with the commodity side of cattle. And when you're looking at sub 5% on the Roki, that's horrible. My wife and I both came from corporate sales. I had a stint in private equity and we said, man, where can we utilize our skillset in a way that pays homage to the four generations before my wife, but also secures

the opportunity for further generations to choose to be a part of the ranch because it will be a viable business. And that's where craft beef came from. So we, we launched the company in 2017. uh we started shipping beef nationally early 2018 uh triple d year covid that was wild uh and we've been growing like crazy uh in the summer of 2022 uh we incorporated our own feed yard we found we found a feed yard and then put it under our umbrella uh so we are grain finished i mean we do a lot of different things that are a little different than the commercial market uh and then last summer uh in august we finalized a partnership deal with jaco uh the other co-founders of jaco fuel so brian and pete and then we brought in a bunch of people

from their network so leif babin dave burke travis mills uh dr sean baker the carnivore guy he's about pal of ours and we went and we bought the harvest facility that we'd been using for the last four years, five years. And the guy that owned the harvest facility was a classmate of mine from Colorado state university. And I'm happy to say that he reinvested and stayed on to run the plant. So we, we formed partnerships and we built this vertically integrated system that we own and operate and, uh, it's going gangbusters. It's been a wild ride. And so honing in on the business model that your father-in-law seems convinced is going to be rough to continue moving forward what does that look like and how are you and cara bringing a new model to try to make sure that this

is economically sustainable into the future yeah so dave operates in the commercial market so he buys calves weans them turns them out on grass to get them into a different market different time year means different seasonality which means different price points for you know christmas demand or things like that uh but in that model you're a price taker you can hedge you can you can put put down on the market and manage your risk to a degree but i don't know if you remember 2021 uh that uh cattle harvest facility in kansas burned down detonated the market i mean prices went through the roof or prices actually went way down because now demand was slowed because this massive facility is offline and overnight you know what was worth 150 bucks 100 is now worth

94 cents it's like how do you incorporate those kind of swings in a business model especially when you're in a position of decreased leverage as a commodity producer because now you you have a hundred of your neighbors that are all vying for the same slots. So with Colorado Kraft Beef, what we did is we switched the model from a price taking model to a price making model. So we get to determine our price. There's challenges with that, of course, because now you have extra burger or other business opportunities that are more work, but you can increase your capital returns. It's just a matter of putting in the work and optimizing the system without out becoming you know the system we're trying to fight against probably similar to the bitcoin

community hey we want to push against central banking but they did it the way they did it for a reason and we want to make that model better but it still has to function and that's as we're building things out you know we're vertically integrated so we're able to control our costs and now we have other value-add options like the beef sticks we talked about we actually launched beef bacon on the website last friday so we're doing cured short ribs cut into bacon for like breakfast bacon oh yeah um so you're a little more nimble you're a little more flexible but it's also a time time investment to make sure you can get those returns and then you have to be at scale so you can afford to pay people and you know just business 101 on repeat

every day it reminds me of the bitcoin mining industry particularly the the push towards vertical integration because that's what we've seen in the mining world as it's become hyper competitive as the the mad dash for bitcoin increases as the price goes up and that's the big trend in mining right now there's a lot of m&a going on and it's driving towards this fully vertically integrated model where as a miner your biggest input cost is your electricity and then the computers themselves. But everybody's really focused on getting the lowest electricity cost possible. What you're seeing is miners actually buying energy generation companies,

substations, whatever it may be, doing JV deals with power generators to put their operations behind the meter and then vertically integrating from there, building their data centers, but building the infrastructure of the transmission lines and the transformers and all of that. right it's just what necessitates survival in in that market particularly it's all scale right you know what's your what's your lowest production cost how do you get there and it sounds very sterile to say it like that but that's every business ever yeah um you know i've

told people in my consulting roles before i'm like there's two ways to make more money in business and they're like oh there's multiple i said no there's not you need to decrease costs or increase your price however you do that is up to you but there's no other way to do it no and they were like it's not that simple i'm like it's actually exactly that simple the problem is people try to over complicate it and get lost in the weeds yeah yeah simple concept but how do you get there it's like yeah you got to figure out how to run as lean and as efficient as possible yeah yeah it's a nasty venn diagram when you start really zooming out for sure and then throw in you know all the things we have within agriculture to deal with, you know, everything is a plus or minus 20 or 30% yield on

weight or efficiency or cost. Well, now throw 20 variables in there and you get a real financial analyst. I have a gentleman that does some work for me and he's a wizard, but he, he and I were talking one day and we're working on this big financial model for a winery in Oregon. And he goes, dude, it would not take much for this whole thing to be upside down. I said, that's agriculture dude every day it doesn't matter what part of ag you're in it doesn't take much for you to be totally upside down and the hard part within ag especially is from the 70s to you know the mid 2010s uh the profitability has just been detonated because in the mid 70s for every dollar you put into agriculture you could get about a dollar 35 back is the standard math today it's dollar 14

so then people are like oh the older generations aren't optimistic they're upset they're very negative yeah they've watched the erosion of their entire profit model for the last 40 years it's probably pretty tough to be positive about that yeah it's been cut by more than half yeah yeah it's it's pretty rough and so you get the old way of thinking and you get you know the traditional ag mindset and you see this decrease in profitability over the decades so you know I've talked about this on other shows if my wife and I had not started craft beef and come from corporate America with a little bit of a war chest and bootstrap this whole thing with family money I don't think it would have worked because how many times could I have gone back to the family

and been like hey okay another couple hundred grand no big deal we only need to do this like three more times and then maybe we'll get a deal done it just doesn't work last raise ever yeah big uh big last race ever never have more untrue words been spoken and how much how much of this uphill battle in terms of just reaching profitability in the cattle ranching sector is driven by like overbearing regulations and just the construction of the regulatory environment and the centralization of of the big packers the the regulatory risk in ag in general is rough um especially when a lot of that regulatory management is done by people that don't know what's really happening you know you have a talking point and you're like well that's

about 40 accurate but if we you know drill out the nuances there's really no silver bullet to any one problem you know whether you want to talk pesticides or implants in cattle or whatever there's really no carte blanche solution but the regulation side the biggest risk of that is it's being driven by propaganda and it's being driven by people with an agenda and that becomes the hardest part um coupled with the fact that a lot of people in agriculture don't want to go have that fight they they're like man i want to i want to be in the mountains of colorado i want to raise cattle the way i do or where i'm from in eastern oregon like i'm going to grow wheat and i'm going to ship it off and if you couple that with the decreased economic viability of agriculture you

know, from 35% to 14, you don't have time now because you have less money for employees. You need to do more of the work yourself, yourself performing a lot of that work. So even if you want to have the fight, you may not be able to go do it. That's the real hard part. Within the cattle space from a regulatory environment, we haven't seen a lot because the cattle industry is so disintegrated compared to, you know, the poultry or the pork industry. Those are all vertically integrated you know purdue or smithfield or seaboard pork you know they own their entire chain so they're able to vertically integrate and get really creative the cattle industry one of the things that drives me crazy is people to use the term factory farming and

then refer to cattle i'm like guys that doesn't exist like most cow calf operators don't carry their cattle past weaning they sell the calves because you have to because it still takes you know 15 months whereas and then then those cattle you know need to live another year to get to finish there's a long turn time on that whereas if you have a chicken born today eight weeks from now it's in a box much more math turn faster turn on capital you can you're producing a lot faster where you see most of the regulations in ag is you get something like the egg issue that happened last year i don't know if you saw that egg prices like shot through the roof in california that's because back in 2019 i think it was 2019 if i'm misspeaking on that my apologies california said

okay two years from now three years from now this is the new egg regulations but california is such a huge market that causes a ripple effect through the whole industry so the entire egg industry has to change over a couple of years to meet these new regs or they can no longer ship to california that's usually is what's driving these huge issues in the cattle industry it's not quite as prevalent because there's so many different things happening if you want to buy xyz label you can do that and the market will pay you to do it the hardest part in the cattle industry is there's so much so many big players that if you're at a smaller scale your ability to do competitive marketing is pretty tough yeah the uh i was actually on the way in here i saw a tweet

from rep massey about the electronic tagging of cattle that they're trying to push on the industry to are they trying to do the to track carbon emissions or something like that yeah it's another propaganda thing yeah i mean you know that it's really interesting this just came to my attention about six months ago because they talk the general math is and this is reported by the meat export federation not me is that grain finished beef has a 67 percent lower carbon footprint than grass finished again it's not my data it's the u.s meat export federation so please leave the pitchforks at home but the other interesting data that i don't think was calculated in that math is uh somebody just released a white paper not too long ago that says well you know

you're worried about methane emissions from cattle which by the way is cow burps not cow farts nobody a lot of people miss that they said that well if you're feeding these cattle grass and they're emitting methane sure but if you didn't feed those cattle that same grass and we had a winter come through and it lays the grass down and that grass is going to decompose naturally on the top of the soil it's going to emit the same methane yeah i'm like man that is a great way to think about that like there is no change in the methane emission we're just upcycling product that you and i can't consume and making it into steak which is arguably the best protein for us so it's it's a very interesting space we're in right now with people trying to regulate stuff they don't understand

and it's insane i mean that's another big topic we've been fighting back against for years which is esg it's completely insane yeah i don't think these people care about the environment social justice or corporate governance at all i think they just want control to think that i mean you just go to a ranch and you look at what the cows are doing grazing plots of grass and moving along grazing and you can actually see like the environment becomes greener and more lush over time and yes they may be burping methane into the environment but the the cultivation and the sort of looking for the stewarding of the land to make sure that it's actually it traps carbon as well these emissions as well by producing things that suck in carbon produce

oxygen it's completely insane yeah because i mean if you look at pictures of our ranch in the summer it's going to look the same as it did a thousand years ago with buffalo i mean we're in the plains of eastern colorado so you know rogan spends quite a bit of time talking about the book empire of the summer moon the comanche book beautiful book they talk about basically where we live and how the buffalo were all there nothing's changed like we're on sand hills we're on grassland the only thing that's changed is there's fences now yeah and that's what's interesting to me because there's this big push on regenerative agriculture and i agree with the concept for sure like you look at will harris and what he's done and you look at that video i don't know how many times rogan has

put up that video of the water i'm sure you've seen it yep hundreds of times probably that is undeniable what he has done in his place and totally agree with that and i've emailed with will and you know thanked him for being a steward for agriculture i think he's a great guy we don't have that same opportunity in colorado because we're in sandhills we seasonally graze from april to when the rain turns off and we get 11 inches of rain a year we've been doing it the same forever the ranch has been there since 1913 and so when people like are you regenerative i'm like i really don't know how to answer that because our our place has not changed in 100 years I would say we don't need to be regenerative right now

because we didn't degenerate anything. And that's the hard part is if you say, are you regenerative, you're insinuating that you degenerated at first. Well, sometimes that's the case, sometimes it's not. But it's very interesting to kind of see where the industry drives it or the labels or the regulation. All of it is driven by people that, frankly, are well-fed, properly nourished enough that they can fight against the people that are doing it and it's

so frustrating no i mean it goes back to like the overarching regulation too it's like that's a perfect example of information is local and you can't have broad brush regulation on a whole industry when somebody um who's ranching in georgia has a completely different environment different variable inputs and then somebody ranching in colorado is completely different inputs in the sink that you're going to be able to say hey you guys are the exact same we're going to regulate the regulate you the exact same it's just asinine sure well and you know i will uh you know rewind myself briefly i also think as agriculturalists there's a lot of people that just don't want to change um and i've made that regenerative statement about our pasture and

things like that. And, uh, buddy of mine, uh, AJ Richards, uh, just put together a direct to consumer shipping platform for cat or for protein around the country. Uh, just launched it last week. And he's like, Hey man, I know your stance on this. Cause I was on his podcast. And he's like, I'd love to introduce you to this gentleman out of Mexico. He ranches in the Sandhills. He's seen major changes with some different stuff. And he gets like six inches of rain a year. would you be interested in talking to him? I'm like, absolutely. I mean, not to say there's not new data out there and we can go find it. But, you know, to our earlier conversation, I don't want to just rip a bandaid off. Like, let's be a little more tactical in how we're

going to do this stuff. Quick break here, freaks. This rip is brought to you by Gradually Then Suddenly, a framework for understanding Bitcoin as money by Parker Lewis. I wrote the foreword to the book. I'm honored to have done so because it's the best zero to one primer. If you're looking for a logical explanation of why Bitcoin obsoletes all other money. Buy one for yourself and maybe a few for your friends. Go to thesafehouse.com slash gradually. That's thesafehouse.com, safe spelled S-A-I-F, thesafehouse.com slash gradually.

Use the promo code TFTC for $5 off at checkout. Buy it now, freaks. The price of Bitcoin is going up. You need to understand it. This is the best zero to one primer. Back to the show. and when you talk about being tactical and how we're going to do this stuff like what is the end goal in your mind for what i mean for colorado craft beef specifically but then more broadly like

what are your thoughts on like the food trends in the u.s and the trends of cat like heads of cattle i mean latest numbers saying it's the lowest uh cattle head count since 1970 for sure uh so the plan for colorado craft beef is our main mission is to engage with the consumer not educate i think a lot of the ag people so we're going to go educate people i'm like that's a tough stick to show up with people might not take that as well so we're just trying to engage people with what's going on um but at the end of the day with colorado craft beef what we're trying to do is secure a profitable legacy for the family ranch for for generations to come that's the mission uh you know from an ag standpoint i think what's really interesting you know because that

the cattle count is way down but there's other back end pieces of that math that a lot of people don't talk about so from the since the 70s on average for every steer that's harvested and i don't know how many bitcoiners know what a steer is but it's a castrated male cow that's finished out the carcass size for the last 40 years has gone up about five pounds a year so while cattle numbers are down cattle are the biggest they've ever been so really the math you have to look at is the beef cutout numbers and i haven't looked at them that's i was actually i talked to dr miller on friday hey you did yeah well i listened to your to your podcast with him and then sent him a message on ig and we talked for like 40 minutes on friday evening great guy

had a great time talking to him uh invited him to the ranch and then talked about some of the stuff we're doing from a production standpoint with like dna and genetic testing etc and as we talked through a lot of that different stuff it's just very apparent that it's hard to get a full conversation about the intricacy of a market like the cattle space in a soundbite because in that you know steers have gone up five pounds a year on carcass weight heifers have gone up six so yes cattle numbers are lower but our cutouts on an animal basis it's higher than it's been ever 200 pounds more than it was yeah which is going to yield you around 110 pounds of finished meat on every animal and i mean fun fact marty how many cattle do we

harvest on average per week in the united states i have no idea 600 000 a week it's a little crazy that's when everybody's like oh we need more more people at colorado craft beef i totally agree we won't we won't be to five figures probably ever where does the rest of that come from That's tough. That's hard math. And then if you compare our cost of production with our harvest facility to a Cargill or a JBS cost of production, for them to break the same animal into boxes, we're about 2x, 2.5x because we're smaller, we're slower. It's just a scale issue. i'm not saying that their model is awesome i'm not saying we have to support them but i am saying we've got to be careful how we start to move the needle so that people don't go hungry yeah so that's the uh jbs cargo they've been a big topic of discussion with the ranchers and the big four slaughterhouses and how do you distribute that yeah and i think

what representative massey is trying to do to make it so that you can you can spin up um packing distributors and i think independent slaughterhouses like within each state yeah is a good move forward it's going to be expensive yeah and you know my my typical stance on all of this is to consumers vote with your dollar spend your dollar on the process you want of support because if will harris at white oak pastures is selling more beef he's going to scale up if i'm selling more beef i'm going to scale up if you need to feed your family grocery store ground beef because that's what you can afford by all means do that um but we have to be intentional with how we deploy our resources and when i say resources it's not just money it's your time

where are you trying to learn things how are you what are you investing in how are you bettering yourself and and being very intentional with how we as a society start to move the needle because i will freely admit one of our investors uh keegan he's out of oregon a good friend of mine he's the one that told me you were going to orange pill me on the show he has been hammering me on bitcoin since like 2019 and i'm like man i'm kind of singularly focused on the beef company right now and i told you that on friday and you were like yep you got to put bitcoin in the stack though and i'm sure keegan's gonna hear this and be like dude i've been telling you like um but there's just only so much time right and so where do you invest that

are you investing it in your team and continuing ed for yourself or family time you know hanging out with the kids making sure they're good humans that's probably a good investment yeah um but there's a finite amount of all of those things now that's uh i was actually had a good friend of mine parker who works out of here in the commons he might be here when we walk out of the studio he came over saturday and we were talking about the discussion we had on friday and um that's something we're trying to figure out too is because like when we have that discussion you're like i'm invested in cattle i'm going to think about like this is the investment i'm putting in i got a lot of time to think about bitcoin as another investment on top of this and

that's what we have to figure out as bitcoiners is a way to again pitch it's like it's shouldn't be viewed as like another investment should be viewed as like an accelerant to your capital stack within your company and you were telling me you got uh bombarded by a bitcoiner uh yesterday you really didn't understand the uh the nuances of running a business and the fact that you have costs that you have to bear every month and if you're not insanely profitable you may not have the luxury to just buy and hold bitcoin into perpetuity um but that's i mean and i was telling you on friday i think we run uh this company on a bitcoin standard we send invoices we accept bitcoin for advertisements um but we also have usd expenses and so that's the way i apply it to

this business is i'll accept bitcoin as payment i'll look at my books every month in cash flow and profits and be like all right this month i'm going to put x amount into bitcoin and hold it and right it has the argument for holding bitcoin on your balance sheet if you can do it over a four year period it is a no-brainer um and that's the question every business owner has to answer is like all right how much bitcoin can i buy and hold for a four-year period um because historically the price of bitcoin has gone up significantly over a four-year period nobody's lost money holding bitcoin for four years and so thinking of like a long-term treasury asset that's how bitcoins you don't view it as something that you're going to make money on this year next year

you got to buy hold it on your treasury for four years what i've just seen at this company is by doing that i was telling you on friday like it has enabled me to reinvest the particular points in time to really accelerate what we're trying to do here yeah the weirdest thing that i just knowing so i do all the financial work for our company that's oddly enough my wife is the cattle manager she has a master's degree in cow nutrition grew up as a fifth generation rancher i don't need to play in that particular pool um but the interesting thing within ag especially production agriculture is the banking is so tight. Like you have XYZ asset. If you can get 70% loan to value on a collateral basis, you're doing pretty good. And the number of banks that will lend to

agriculture, very strict agriculture is relatively small. Then you get into a specialty market like what we do, which is pretty hard to collateralize. Like live cattle have a known value. Well, now we're going to harvest those cattle. They're going to be in a box. Now they have a different cost of inputs, but it's no longer a known value for the bank. So they have to collateralize back against that. That's been one of the biggest challenges we've had as a company as we scale is because now we're getting out of like traditional banking agriculture and we're big enough that the capital is kind of scary to them with an unknown market. And it's based on projections i would be really curious to see what my bank said if i said okay now bitcoin's in this

same collateral stack uh i don't know that that would go my way no not right now no but i think there's a ton of value don't get me wrong um but the the banks especially in the ag sector are so risk averse especially right now with interest rates being insane and a lot of ag is just generally unprofitable i would be shocked if there wasn't a massive amount of pushback no i would be too yeah but it's insane because the market's still basically coming to understand bitcoin i think in the future who knows at what point but i do think at some point in the next decade bitcoin as collateral will be preferred to something like a tractor or even land if you will just because of the fact of how liquid it is and it trades 24 7

365 and you can prove yeah the market the market discovery is active all the time right yeah and so the company down the hall unchained um they're really they're probably the leader in terms like bitcoin collateralized lending and the way they've constructed their escrow for the the lending product is beautiful because it's in bitcoin you can have what's called a multi-sig wallet where you put bitcoin in this wallet and to move it you need two or three signatures from two different key agents in the quorum and so you can imagine a scenario where you're going to take a loan out as a rancher and you put bitcoin in this wallet you hold a key the bank holds a key and And then a agnostic third party holds a key.

And the Bitcoin sits in that wallet. The bank can see it. You can see it. That third party can see it. And you know it's there. The collateral's there. And then, God forbid, anything happens to your business and they need to liquidate the collateral,

they can sign the transaction. The third party can sign the transaction, move the Bitcoin, you liquidate it. It's much, when you think about liquidating collateral in a lending structure if you were to collateralize farming tractors or land or whatever it be, and you think about the liquidity profile of those assets, in the future it will be very obvious that Bitcoin is preferable

in that collateral stack for these operators. Are you familiar with borrowing-based structure? Yeah, that's very common in the ag space. So, oh, I have a hay pile, 400 tons of hay, it's worth call it 80 grand every month you're re-upping those inventory numbers because your inventory is constantly moving right we're feeding cattle but now the cattle are worth more and this has moved down and it's that constant rebalancing every month it's kind of the traditional ag lending side especially on the production side it's not long term it's month to month yeah and

i would be curious um without knowing much about bitcoin is the volatility of that market and if that might invert and you have a real problem because that's that monthly oh where do we stand yeah and that's where so that's we're in the nation stages of this collateral market for bitcoin specifically so like unchains ltv is 40 because of the the volatility of the that's rough yeah 40 percent's hard yeah yeah so i don't think this problem's solved yet but i do think over time it will be solved as bitcoin market cap increases and becomes more stable the price volatility decreases what's the regulatory side of bitcoin going to be though because i'm sure the central banks and most governments are kind of against not being part

of the global commerce system so what's the risk on your guys's side with the bitcoin stuff you with a 40 collateral today how do we grow that to 70 or 80 that's more of a bankable business model i think it comes down to the um the capital providers on the lending side so that's like just because bitcoin's history up to this point 15 years and it's been hyper volatile you've seen exchanges go down the ftx's the block fives the celsius the mount gox's of the world really scared traditional capital from coming in and being comfortable backing a lending desk um and it took a lot of trial and error to realize that there's ways to do it like the way unchained does it where it's essentially it's nothing's risk-free but it's as close to risk-free as you

can get with this collateral setup the escrow setup um a bunch of companies in the past were taking people's bitcoin lending them dollars and then they were taking that bitcoin and lending it out to degenerate traders who were losing the Bitcoin. So all those lending desks went under because they weren't really respecting the nature of Bitcoin as this hard asset and the fact that there's no lender of last resort. Like if you're gonna do these lending models,

it has to sit in a multi-sig wallet and don't move. You can't re-hypothecate it to people. And the market has learned that lesson. And I think we're finally at a point where it's obvious, like, all right, if you're gonna lend Bitcoin out, it's gotta be done in this way. So I think just from an education and maturation process, we're at that point. And it'll get better where capital providers will get more comfortable putting their dollars up to lend against Bitcoin collateralized loans.

And I think the timing is actually really ripe for that because if you look at like private credit markets, they're all looking for yield. And it's the treasury markets are fucked. The corporate bond markets are fucked. and right when it comes to like a credit product like where you're going to get yield as the bitcoin price goes up bitcoiners don't want to sell their bitcoin they'd rather lend against it there's going to be a lot of a lot of capital that that can be made from these these credit funds putting dollars in these products that's only one aspect of bitcoin's value in this particular or and from your perspective is yes it can be good collateral it's still maturing uh

through that process that bitcoin is collateral but then again like just from trusted third parties like banks like the banking system is very woefully systemically fragile right now if you look i just saw i retweeted a tweet right before i hopped out of my uber to come to this interview the treasury issuance uh is back at covid levels like april 2020 levels wow in terms of like debt expansion so there's definitely a liquidity problem well a lot of the bigger financial institutions have closed their ag divisions a lot of the big banks won't play in agriculture because it's too volatile it's very interesting and that's been happening for the last couple of decades where you know big financial institutions are offloading their

entire ag portfolio and it's like oh so we have fewer lenders it's rough yeah no i mean it's it's this it's the fiat system like you've printed all this money and you've created these perverse incentives to like seek yield which means you got to go take more insane risk and allocate capital in a way that arguably would not be um allocated uh in the same way if we had a sound money standard it's just literally you have to keep up with the pace of debt issuance and monetary base expansion to try to create a yield on top of that just to um just to beat inflation year in and year out and so just capital spread way thin in areas it arguably should not be in and you create this systemically weak and fragile system and that's hopefully what bitcoin's gonna gonna fix

where under a sound money standard with Bitcoin, you bring opportunity costs back to the market. And as a capital allocator, you have to think really hard. Like, all right, if I put this Bitcoin here, am I going to get it back? And you get more sound capital allocation strategies. And then on top of that, that's just the one aspect, the sound money aspect.

There's only 21 million Bitcoin. You have the scarce asset that's going to appreciate over time and increase the purchasing power of your balance sheet. over the long run but then you have this redundancy um track as well the fact that it runs in this distributed peer-to-peer ledger that allows you to um allows you to actually custody your money and hold it and so like when you think of like a potential banking crisis we saw this this time last year with silicon valley bank and first republic and signature bank with the fragile state of the banking system like i make a very strong argument that it makes sense

to hold bitcoin just in case the banks go down because there was if the fed didn't step in and the fdic didn't step in um for silicon valley bank specifically last year like the whole startup space in silicon valley was not going to be able to make payroll and so that's like another argument for holding bitcoin in the balance sheet is god forbid you have a systemic banking crisis again and the banks don't allow you to get access to your money or you get bailed in they take a portion of your your deposits and bail out the bank yeah because there's a lot of people that are talking about just don't have cash cash is a horrible idea because what is cash you know cash is a number in a bank that may crash tomorrow and that's what

the ag space i really love what we've done because not just our company but ag in general most of it's in assets it's in hard assets you know i have cows if the entire banking system falls apart tomorrow people still need to eat yep or i had a buddy that was in the oil field and he goes i almost never have cash i was like really he goes yeah i have extra pipe he'd just buy it like if he had extra cash on the balance sheet he just bought another load of steel and he goes because those are real assets he goes the banking system is garbage yeah it's like i want real assets and so if bitcoin you know could be that other potential real asset that can move and become a currency that's you know air quotes a harder asset than numbers in a app that may or

may not exist tomorrow i think that'd be a great idea yeah yeah using that example like your buddy buying steel that's where like bitcoin fits in again solving the double coincidence of one's problem it's money and so yeah he's putting it in the steel but maybe he doesn't need that steel and he's just using it as a store of value instead of cash that's where bitcoin comes in so like instead of buying that steel that you may not need just buy bitcoin again it's extremely liquid trades 24 7 365 instead of putting in steel put it in bitcoin and then at some point in the future when you actually need to buy something maybe you don't need to buy steel maybe you need to buy maybe you're drilling a well

and you need a drill team to frack and so you need to pay for that team instead of selling the steel and then using the cash to pay for that team just either use the Bitcoin or sell the Bitcoin just a different form of savings yeah and that's why we have

fix the money fix the world out here because I think like what you just described is whether individuals realize it intuitively or not they're forced to make these take these actions which really don't make sense at the end like you should be able to just save money you should be able to like in the same world in the same economy you should be able to save cash and build up a cash treasury to um to basically allocate at some point in the future

to invest in your company with the particular needs that exist at that time but yeah are you saying it's not equitable that my bank pays 0.4 percent on on savings but charges nine and a quarter right now yeah no it's not i've always had a problem with that particular discrepancy i'm like i know you're relending our capital and charging nine percent like who's screwing who in this particular environment and they're creating money out of thin air in that process that's actually how money is created in the commercial banking system when they issue yeah the money the money multiplier is i remember seeing that so my degree is actually an ag business with minors in accounting and finance and i remember the first time i was in a college finance class

and they showed the money multiplier and i was like well this is how it works i'm like that looks like smoking mirrors and a balance sheet shouldn't hold up to that math and well it's all fugazi and the really unnerving part right now is the western governments have weaponize this monetary system internationally like with the external to what you think of what's going on in russia ukraine just honing in on the fact that the western government froze and are now liquidating russia's treasury assets is an insane move on their part because they've essentially proven like oh as a sovereign nation you actually don't control your wealth yeah it runs on the rails that we control and so we control

at the end of the day there's countries in the middle east all over the world who saw what the west has done to russia's treasury assets are like holy shit we cannot hold our assets and treasuries and like i don't think there's been many public um statements about a move away from this outside of like the bricks country saying like yeah we need to band up and um get away from swift and in the dollar system but you have to imagine that all these countries are thinking we need an alternative to the treasury market and the dollar system because they can freeze our assets yeah if we say something wrong so there was a there's a book i would recommend uh to all the freaks out there it's called the coming jobs war i don't know if you've read it

i have not it is a terrifying read but it was written by the gentleman whose dad founded the gallup polls and he talks about the five boat anchors on the economy of the u.s and how the u.s was a suit was almost not a superpower in the 70s and then we invented the internet and it comes since it's from the gallup polls it comes with a ton of data so it's very data driven um great read and then you know the the caveat to that is i was at a con or my wife excuse me me. It was at a conference. It would have been like 2018, 2017. And I've made this statement and I've gotten a lot of hate because of it, but it's not my statement, but it's an interesting concept when we discuss food. There was a gentleman that was a global economist and he's

talking about population growth, ability for countries to feed themselves. And there's only three countries in the world at the time that he said 50 years from now would be able to self sustain their population with food is the u.s argentina new zealand um and and the other caveat was still be able to export because that's what matters right you grow all the food you want but if your infrastructure to export that food to other countries is poor it doesn't matter yeah like brazil grows a ton of food but they have like two ports now granted in 50 years you can build a lot of infrastructure. But the concept was 50 years from now, 2050 or so, based on current population growth and food production, especially with regulatory changes, et cetera, that at some

point we were going to start to hit a tipping point where food was going to be weaponized because of countries growing and not being able to support their own population. And then certain countries were going to raise quite a lot in the rankings of global power because of their ability to control food supply and i watched uh my or my wife got the presentation and showed it to me and i was like you know i've had people from argentina they're like there's no way and i'm like i'm not saying that's what's going to happen but it was an interesting thought exercise you know when we talk about the food system and what are we weaponizing and what are governments doing that is not that far of a reach no it's just right there i mean if you look hard

enough you squint you look it seems like they're preparing for this this uh food crisis with the the push to eat the bugs and the lab-grown meat it seems like those are uh sort of moves foreseeing a food crisis at some point in the future it's like hey they say it's like oh no this is healthier it's better for the environment but i see that i'm like ah they see something on on the horizon they're trying to make it look like eating bugs is actually a good decision sort of trick people into doing it so they can i'll stick with steak yeah i will as well no you get back like the another big thing is like the competency crisis so like taking a step back and thinking of bitcoin and money from a macro level like that's a big problem in our world

today with inflation where it's at with taxes where they're at particularly here in the u.s like you just have people who are working millennials specifically who were told like you go to college you get a degree you go get a good job you'll be able to have the life that i had you'll be able to buy a house raise a family do everything you want that's just not materializing it's really demoralizing oh man 30 years ago a good corporate job was the meal ticket you were solid you were gonna have a 401k you were gonna have a house and two cars and your wife and two kids and it was very traditional you know 80s 90s and now it almost seems like the only surefire way to have a job forever is to work for the government yeah because i mean i've seen corporations i know

of one that so pre-covered they had around 200 sales employees nationwide they go into covid cut a third of them they cut around 50 uh positions dropped the sales team down to 150. give a very generous severance but overnight you know 50 of these people that were in very high level sales positions are gone that's you know early 2020 october of 2022 a all hands meeting tomorrow morning and they cut the sales force from 150 to 50. holy so in a matter of two two and a half years, they took this 200 person sales team down to 50 people, massive swing. Here's the crazy part. I know this move very, very well. I know a lot of the inner workings of what happened. They were still exceeding sales budgets. They were crushing the numbers.

All these people were performing. They were doing what was asked of them transactionally, you know, in this employment arrangement. It still didn't matter because somebody looking in a spreadsheet somewhere determine that this is the business move and you know those hundred people be damned and that's the sad part because everybody thinks oh corporate will be safe it'll be this i'm like it's never been more volatile and and i could be a little more supportive of that company making that move it's like hey we have to make a pivot something's not right but when you're selling 15 above the budget that was set for you and they still acts two-thirds of the group it's bananas i just and i don't know how to reconcile some of that

which is you know entrepreneurship and decentralized employment and you know the human side of society is being lost in a lot of ways oh it is and it's really beginning to weigh on people which is the scary part why i feel compelled to work on bitcoin and like push it in into existence and make it not only prevalent to people but pervasive throughout our economies because, again, it all comes back to as people are making those decisions because they're looking at spreadsheets

they're not looking at because they know that in the future the government's going to print a bunch of money. We have to keep our cost as low as possible just to beat inflation. And, again, it's this perverse incentive that has been injected into our economy with easy money.

And that's the concept of Bitcoin mining is like proof of work and why I think it becomes intuitive to a lot of people that we've talked to in the cattle ranching industry is because your whole business is proof of work, like literally toiling on the land to produce food that people eat, that energizes them as individuals and then go forth and energize the economy. and when you get to that concept of like proof of work like you do a lot of work you work hard you do your job you expect to get paid in a wage that respects that and that you can then sustain a life that is respectable and the money just doesn't do that like you you do your work and you get paid and something that's literally evaporating in front of you you're like forced to go speculate in the stock market become an expert stock picker just to save your money and save your wealth oh the hard part is especially in ag with that decrease in profitability that we've seen over the last few decades nobody wants to come back so while there's a ton of people that

are railing against operations getting bigger and these huge family operations those guys are the ones that have done the business work to make it profitable and to continue to thrive in this weird system we're in and the problem is to be at scale enough to be profitable requires a lot of input and a lot of people don't have that so these small ranches and small farms are getting gobbled up by other bigger family operations and it's just math yeah because you know the the guys that used to be able to farm on six or eight hundred acres and make a family living of it in the 70s can't do that anymore and the problem is by the time they got to the 90s and their kids were grown and went to college and they saw that after the banking crisis in the eighties and interest rates and

commodity prices are low, who wants to come back to that? Because the big argument in agriculture is the way of life and our lifestyle. And this is important. Yeah. And I love that stuff. Don't get me wrong, but I also love feeding my kids and there has to be an incentive and you have to be able to do it in a way that has good mental health you know there's a big suicide issue in the ag and farming community um the actually with all that hemp stuff that went down during covid there's hundreds of farmers that committed suicide over hemp really oh yeah because they went they went all in and the market detonated and they didn't have a choice they were done and they chose that route which i don't support but also was the neck guy's boots yeah i mean i knew of

and i think the last i heard there was like 11 farmers in the willamette valley of oregon uh that were just done yeah and that happens ad nauseum around the country because i mean to get back in like the ag banking side you own you know your your family gives you the generational farm and you own you have a million dollars in equity well if you're not profitable the bank will continue to loan you money they'll just take more equity until you're done yeah and that's the hard part that's where it's getting really sideways because the bank doesn't demand profitability because you're sitting on a mountain of equity and they'll just let you work until it's gone and that's the system i don't agree with it i think we should have an ability

to look at somebody and say hey what are you doing but they love the way of life or whatever it may be and it's it's hard to watch yeah when the bank takes the land flips the bill gates and yeah um yeah it's really fucked up and then you compound it again with the competency crisis like the incentives of the system like you think are such where like you have a family farm you want to pass it down to your kids but your kids today they're looking at the economy they're like i'm not going to make much money doing this like all the money's on wall street or big tech which are being flooded with easy money and so you get all the talent that would sustain a family ranch or a family small business and they say i'm not going to make money here so i'm going to go to wall

street and then perpetuate the problem like and then you wake up two generations from now whether it's farming oil and gas nuclear energy which is prevented by regulations predominantly but we have a situation here where we're only a couple generations away from literally a competency crisis driven by the fact that nobody knows how to do any of this anymore because they weren't incentivized economically to sustain these practices whether it's agriculture energy production, steel production, manufacturing, whatever it may be. We're all incentivized to go in the hyper-financialized and hyper-growth sectors of finance and tech. Yeah. When I was in private equity, it was for a small ag fund and they brought me in strictly because of my boots

on the ground knowledge of how the system had to work. We had great analysts, we had great leadership, but those spreadsheets and financial models have to literally apply to boots on the ground and that was where i came and that was my background was okay if we're going to operationalize this this is how we build it this is how it works this is how it has to function um down to even you know knowing basic equipment and what you can do you know as a i was a construction manager for quite some time and those are weird skills that the general public usually doesn't have you know so the well's upside down something's wrong how do you fix it i'm like oh well there's a lot of different ways you can do that um it's all a lot of it is a lost art because you're not

incentivized to do it and probably the weirdest thing within agriculture is ag kids are known for their work ethic the construction industry the hospitality industry love ag kids and they'll pay them a lot of money to not go back which is good for them but it's not great for society on of long-term curve yeah that's what my uh my hope falls back to just like free market first principles that it can get very bad it is getting very bad but at some point the incentive to like go back the need for quality food and quality energy infrastructure will get to such a point that the price of actually working those jobs will go up and people will go back but sure well did you see in the most recent south park episode where the handymen are all billionaires because

it's like for 400 you can't fix a toilet so they just start charging out out the nose and it's a laugh at the market economy of basically people that can't subsist for themselves and like at one point you know one of the dads is like kids i'm going to show you how to fix this thing and they pick up the phone and call the handyman that's their version of fixing it uh or to those that maybe you're not a south park fan uh you know mike rowe yeah a guy from dirty jobs anybody that wants to get on youtube look up mike rose address to congress he went into congress it's a seven minute video it's incredible and he talks about this very thing like you're gonna we're gonna miss out on some of this stuff um i don't want to give it away but it's a great listen yeah

now you think like energy ag civil engineering like you think of all the urban sprawl that we've built over the last five decades and all the uh infrastructure maintenance that's needed on all the plumbing and electrical infrastructure that's been built out oh go look at like some of the every now and then you'll find pictures when they've like dug up a new york city street to do a project and just look at the amount of infrastructure that's under the pavement it is nuts and people have no idea yeah like i flushed the toilet and it's gone i'm like it's not magic no it's not and some of it's been there for a long time and one of these days it may not work anymore yeah especially uh it'd be part of the reason i got out of new york looking around

saying the city's falling apart around me it's uh i don't want to be here when the when the toilets don't flush and the shit starts yeah eking up on the streets well what'd you think of the stakes man sent you down some stakes we had a couple of the new york strips last night they were incredible we did uh we did a reverse sear in the cast iron we had some twice baked potatoes and spinach with them they were delicious there you go yeah cool did a butter garlic thyme and rosemary very classic yeah appreciate that i have a nice uh the the strips have nice fat caps on them too i love the fat um very good fat yeah one of the things that we're able to do within the company you know to the quality side is we age everything for 21 days there's a whole

carcass they hang for 21 days and that's where a lot of that flavor comes from is that ability to age them as a whole carcass get that enzymatic breakdown that adds the flavor and well i think we had some of the steak yesterday at the event with jocko and the guys like there's people cutting it with a fork yeah i'm like that's uh that's the hope the uh 21 days why 21 so up to about you can age up to about 45 days but it's a decreasing curve so once you get after after about 35 days you're not going to get a lot of impact but if you like if you have commercial steak it's harvested and most of the plant managers and those big commercial plants will tell you that if that animal is still here in any form or factor in four days it's an

operational failure and some of these facilities like uh there's there's two massive harvest plants in in colorado they're harvesting 6 000 head a day in two shifts you know 16 hours they're doing 6 000 animals it's insane it's i did the math one time and like they're unloading a semi load of cattle every three and a half minutes holy crap which i've done that and you can't unload a truck in three and a half minutes so it's like seven or eight receiving areas it's it's crazy but uh as you start to age what you get is you'll have a water shrink in that first like seven days you have a really good flavor profile change from 7 to 14 and 14 to 21 is just icing on the cake so if you have any sort of maybe a biological issue like because they're all

different right none of these cattle are cookie cutters you know you might have one that has a little more connective tissue or wasn't as finished or something. But that 14 to 21 days is an insurance policy to guarantee the same quality in every box. And it's moderately unimpactful from a cost standpoint. We actually did some research from 14 to 21 days to see how much more water you're losing. And that's one of the things that if you start, if you buy a one pound steak at the grocery store that wasn't really aged and you cook it down or you buy a pound steak from us and you cook it down we're going to have a lot higher yield on a percentage basis because most of the water in ours is gone which is where you get that concentration of

flavor that you probably noticed yesterday yeah and they're big steaks too which was great to see and the other thing like defrosting them the color of post defrost was you couldn't tell that it was frozen it looked like it was supposed to yeah which is not i i've bought steaks from uh from other ranchers frozen vacuum packed and defrosted and i was like should i cook this not always but sometimes this i was like oh no this looks good to go yeah we're uh we're very very particular on the quality control uh so mike the gentleman we bought the harvest facility from that stayed on to run it uh when we were in college he ran the meat lab at colorado state university so you know we jokingly everybody in the in our company right now is the nerd of some

sort like Darren over here behind the spotlight he's the camera nerd I don't know that we've told him that yet but I'm the money nerd my wife is the cow nerd Mike is the meat nerd and you know when we when we started down the path of getting the deal done Mike was like well man what am I supposed to do I was like exactly what you're doing now I don't want to learn that I don't have time to learn that you know let's let's join forces and make a bigger impact as a group. And he's like, Oh, cool. Um, what's really interesting on the cattle fabrication side, you know, you take carcasses and you break them down into steaks. Everybody will look around and man, how do you do this? How do you do that? How do you change this? And a lot of people in

the cattle industry, myself included, my wife and I, when we first started the company, we said, man, I bet it's like 50% cattle quality, like 50% the guy with the knife when it's in a package i think it's about 90 10 really it's 90 a guy with a knife really i mean good cattle will remain good cattle but with proper cooler settings proper proper cattle handling proper carcass handling proper packaging and an ability to kind of operationalize the quality aspect of it you can take subpar cattle and make them very good that is not what we do but in just watching that um there's a operator near us uh they do direct to consumer they sell only halves they've done it for decades they have a waiting list like to get on their list

and these guys know cattle they know how to feed cattle they're very very sharp i've had their cat their meat out of three separate facilities all three of his different flavor profile interesting strictly based on carcass set or cooler settings how the carcasses are handled it's very surprising to me because i was never the meat nerd like mike is but yeah that's one of the things we really push on is that consistent quality every time you open a box it's going to be the same thing and then amy who's our head of fulfillment at the ranch i mean it's okay if this package doesn't look right if the steak doesn't present right in the package we don't send it yeah so do you think you're producing a model that can be replicated is that the hopes is that

through yeah there's other people that replicate it already i mean you know will at white oak pastures they have their own harvest facility on site um and then like joel salatin at polyface up in virginia um there's people doing this the thing i am hesitant about is just the scale you're asking for uh so i did bradley's podcast last fall uh the gentleman out of vegas and before i went in this podcast i did the math and i was like oh man so you know another question for you how many cattle a day are consumed in new york proper new york city proper not the boroughs just central town in manhattan yeah so earlier it was 600 000 a week a week of slaughters that's about give or take 90 000 a day how much is new york consuming per day ten thousand six thousand

six thousand yeah okay and you know joel salatin is in virginia not too far from new york but subsequently not too far from baltimore not too far from dc not too far from philly you know obviously that end of the world is so concentrated with humans i worry that people like ourselves or will or joel or any of those guys i don't know that it's scalable at the city level especially when like if you get to the northeast because there's just not room right like where i'm from in eastern oregon you know it's three hours to portland and you're like oh i'm going to the next major city say you go north it's seattle it's still two and a half hours away and there's nothing between it there's small towns but it's very

spread out. Once you get east of the Mississippi, between towns and big cities, there's not a lot of space. It's very dense. Absolutely. So if we look at that from a real estate requirement, from transportation, all the other infrastructure that literally lives in Colorado, Utah, Iowa, Kansas, that produces all this protein and then trucks it into all these population centers, I worry about the scalability on regional levels, especially when you now throw in climate, you throw in cattle production, and then feed especially. So if you look at the cattle market, like Florida is one of the biggest cow-calf states. They have mother cows because it's beautiful weather. They can do all these things.

They don't finish a lot of cattle down there. They move up. They move up towards feed. So if you look at like the cattle market on the commercial side, it's something like 85 or 90% of all finished beef comes out of the cattle feeding triangle, which is Omaha to Denver to Amarillo. It's all right there. so how you move that model or or drive commodities a different direction to now have infrastructure to feed those cattle you know where are you going to harvest 40 000 head a week just to feed new york in that region and i'll copy paste that to every other major metro on

the east coast that becomes a big math problem is it when more slaughterhouses and packing facilities saw this like more distributed maybe but shipping fat cattle is expensive because you only put about 30 fats on a truck so if you need to haul i mean so it's the the general resource allocation it's cheaper to move feed which doesn't move that often right because for anybody out there that's not up on ag transportation it's about six dollars a loaded mile so when everybody's like well do you feed local i'm like as local as you can because it's expensive to move stuff um same deal with calves if you're moving four or five hundred pound calves you can put about a hundred of them on a truck if you're moving fat cattle that are ready to go to slaughter

you're putting 30 on a truck so your per head cost is way higher so all of it you know when you start doing this at scale doing unitized math you know just multiply that across all the different sectors that has to happen and then if you take a 1300 pound steer and you harvest that steer and you break them into finished product it's about 450 pounds of meat that's only like eight cases like half the size of that table that's way easier to transport now yeah so when you start busting out the logistics of where the cattle have to be where you're going to move product how you're going to move product and then can you feed them it's a it's a very regional discussion because once you get east of like central nebraska you go further east and you

get in that humidity cattle don't feed as good now like if you look at some of the feed yards in iowa i mean they've got misters and fans and sunshades that's a whole nother infrastructure cost or you go further east into kentucky or you know virginia where you might get snow or i mean it's every one of these things just gets so convoluted and then if you're in this very concentrated area over on the east coast and you have a feed yard nearby somebody's going to be upset because they don't smell great no i used to uh we used to go to marquette to play uh play them again in lacrosse when i was in college and their field was literally right across street from one of the big four slaughterhouses and it was the worst place to play a lacrosse game it reeked

yeah it's and i'm not supporting them and saying well that's how it has to be but man people got to eat yeah so i would i think there's a massive groundswell in the change of the system i hope that it continues and we're going to do everything we can to to help other people like we we probably consult with three or four other producers a month just telling them this is how we do it this is who we use for insulators this is how we buy boxes i mean we had one of our major competitors in colorado email us last week and they're like hey i know we were at that event and you mentioned you should you switch to ups do you have a contact no problem send it over and i do think we're going to get to a point that it's less centralized

uh but it's going to take a lot of work yeah and it's going to take a lot of capital i am curious what's going to happen as we continue on in the in the cycle of business because a lot of the facilities that cargill and jbs own are not new they're going to start aging out at some point and you know just thinking about one of the plants in colorado colorado is not exactly friendly to agriculture the regulatory risk in colorado is very high i would be shocked if one of those plants was finally defunct if they would rebuild in colorado that's going to change the whole market if they move 200 miles east that changes trucking requirements it changes off-fall movement every one of these things has this ripple effect

that frankly most of the population is not aware of it's like oh well there's just now stake comes from over there it's like no man that changes everything yeah well going back to like the capital question that's what i wonder do you think there's a case to be made for patient capital in the long run like this model proves out it can be replicable replicable like would it make sense for somebody with a 20 30 year time horizon from a capital allocation perspective like maybe yeah If you could do it in a region, yeah. My big concern 15 years from now is FedEx and UPS are already overloaded. We ship nationally every Monday, and we're growing like crazy,

and we're not the only one doing that. I don't know how that system's going to hold up. And like I said, it's the ripple effect. Yeah, dependencies that are external to what you're doing. Yeah. Well, that's why we purchased a harvest facility is because we were speaking for harvest dates two years out. Well, how do you forecast growth like we've had two years out and even be moderately accurate? It's almost impossible. So, okay, we need to control that piece of it. Well, that was a lift. So the more you want to control and be able to actually grow your business, the more systemic you become. and if we look at FedEx and UPS it's like oh my goodness so okay now do you try to just be hyper local do we just focus on Denver that would be ideal I would love to not have to ship product anywhere but that's up to the market and the market is I mean we had some

orders from Texas yesterday because of the event we were at it's no factor we can do that but as if we look at that and say okay how do we feed these people with the existing infrastructure it it's a challenge we got a lot of problems to solve i i do think though i'm very hopeful there was a gentleman uh i can't remember his name is a logging advocate out of libby montana has a civil engineering degree he spoke at an event i was at last year and his message was awesome really loved listening to the to the guy but in general he said hey guys it looks like we have problems and we do but let's rewind a little bit revolutionary war war of 1812 american civil war spanish-american war spanish flu world war one world war two great depression civil rights

movement korea vietnam he goes it's actually a lot better than you think right now he goes i'm not saying there's not things to look at but you know there's there's times it's been worse and he said and i think the way he described it and if i'm butchering it uh my apologies his comment was he goes the reason it feels so bad is nobody wants to hold on to hope and he's like it's not to say there's not work to do but it looks bad when you're sitting in a spot and you're looking up the mountain but if you turn 180 degrees and look how far you've come it gives a different level of perspective that's i just really loved that message yeah you gotta have hope read uh read from shawshank redemption there you go hope is uh is a good thing maybe it's

the best thing um you gotta have hope and that's uh again we have come so far and again i'm gonna hammer it home buy bitcoin right buy bitcoin okay but i think the more importantly like why buy bitcoins because the money's broken and it's created all this hopelessness out there again going back to like people are working they're like what the fuck like i can't even afford right to buy a steak i can't afford my rent my rent my electricity bill my grocery bill and at least for millennials like i know a lot of people are like why the fuck am i even working and then um then you see what the government's doing printing all this debt and issuing all this debt to the central bank's printing money and then

they're taking all this debt and putting it uh in places where it probably shouldn't be and it's not producing return for your average american you understand why people are extremely pissed off but i agree like you should have hope but you're proving it there are models to get away from this like bitcoin gives you agency from a monetary perspective to say hey i'm removing myself from the system and operating in this monetary system detached from the government in the central banks that they cannot perturb or centrally control and i completely agree we've never lived during a time when you have more opportunity to actually build your way out of this that's the hope with this show and um the conversations that we have and what we do with

our website and the newsletters like to prove to people like hey like you're not going to vote your way out of this problem and getting your way out of this problem is not going to be easy but you do have the agency and the ability to build your way out of this problem with new business models with new monetary systems whatever it may be the access to open source software to unique capital structures has never never been what it is today and if you have the agency and the drive to actually build your way out of this it's easier than ever to do that yeah there's There's never been a more opportunity-ridden time in society, in my opinion. But the guardrails are more than they've ever been.

So you just got to get on your running shoes and maybe climb a little bit. Yeah. And tell the government to leave us alone. Just live where I do, man. It's great. Everybody, not to make light of COVID, but I had some people like, man, how's social distancing going? I'm like, we were doing that before.

we don't have anybody that's not family within like three miles it's not so bad so no that's that's actually one of my um another silver lining of the day and age we live in it seems like states are beginning to assert their autonomy from the federal government in a big way post-covid which is good keeping the federal government in check um to stop it from overreaching and making things too burdensome it's very important states are beginning to be like hey you guys are fucking things up too much dude if i had a magic wand the term limits would be 10 days ago like that's that that grossness that is lifelong politicians just that that's out of any of it the thing that i'm like does not resonate with me like we're supposed to have citizen legislators not

legislator politicians for a career yeah like i saw a meme on twitter yesterday chuck schumer graduated law school in 1975 and became a senator in 1976 has been so what have you done yeah yeah you've just been part of the machine yeah it's been 50 years and it's yeah it's i'm hopeful we'll get away from it absolutely well hey man i appreciate it thank you very much for having me i appreciate you jeff thank you for coming i'm pumped shout out to harry and brett from the meat mafia podcast for for linking us up last week those guys are awesome yeah they're solid dude. Yeah. Really cool things going on here in Austin, whether it's, um, the health scene, the Bitcoin scene, the tech scene, it's, uh, it's cool. I'm happy that you were able to get down

here and check it out. Well, appreciate it, man. And, uh, sure. We'll have some links in the show notes, right? Definitely. We'll link to everything in the show. I'll have Darren send you all the particular stuff. They don't, they don't let me communicate on the marketing side. Well, safe travels back to Colorado. Um, it was a pleasure to meet you and keep crushing it, it thanks man appreciate it peace love freaks