Speaker 1: 0:02
I’m Colter DeVries, owner of Ranch Investor Advisory and Brokerage Services. I’m an accredited land consultant with the Realtor Land Institute and proud member of ASFMRA.
Speaker 2: 0:13
The Ranch Investor Podcast is the most downloaded and informative industry-specific content that intrigues while entertains, All right.
Speaker 1: 0:22
Quinn, welcome to the Ranch Investor Podcast. Thanks for coming on today. I wanted to bring you on because carbon credits are coming back around. It seems like they might have fallen out of vogue, might have the interest in carbon credits might have softened up a little bit through other things that were going on in the world the last three years. But now I’ve been hearing of a few different players, such as the Wilkes Brothers, who are pursuing carbon credits. They are going to be pitching or presenting to the Montana Farm and Ranch Brokers Association next week, I believe. Maybe not next week, but here in the next few weeks. The Wilkes Brothers are given their model and you work with a group that’s also pursuing this. We’ve had Chris Mayhewson twice, two or three times actually to discuss native energy one of the players With all this background I have. I’m still not sure I fully understand it, quinn. So hopefully you can help me out and help the audience out and hopefully I ask them decent questions, because the information you get is only as good as the questions you ask. But let’s start with who is Quinn Holland? Where are you from? What are you up to? What do you do? Why did I?
Speaker 3: 1:44
ask you on. Thanks, cole, to really appreciate being on here. I’m very grateful for the time to speak on this. I work for a company called Arvin Intelligence. We are looking to bring scalable technology solutions to the environmental markets and help originate environmental asset credits whether that be a carbon credit, whether that be a sustainability claim, whether that be a carbon inset, a reduction in CI score, etc. We can work within the full spectrum. I personally live in Houston, texas, right now. I’ve grown up across the West as well as the East Coast. I’ve kind of been all over the United States. When I moved out to Wyoming in 2013, I was exposed to agriculture for the first time and the romantic cowboy life kind of took hold of that. You know that part of us that speaks to engaging with the land and engaging with animals and knowing what that’s all about. So I dipped my toe in and had the opportunity to work on ranches through high school and college and was fairly involved in agriculture at Montana State University, where I spent four years. I studied five years actually I studied environmental engineering and then I got a little Master’s of Science program in business innovation, which was really open my world to what sort of opportunities existed that could be brought, not just in agriculture but in environmental and engineering and technology at large, and what that gap was in solving business needs there. So I was able to get introduced to Aarva through some mutual friends and have been working with them for the past year. It’s been a really enlightening and eye-opening experience in terms of just, you know, what is moving at the macro level in terms of environmental markets, what is trying to happen, what are corporate companies seeking, what are the solutions that they’re driving towards and why. And then where’s the gap between the actual solutions that are happening and the smaller companies like Aarva that are trying to help meet these needs of larger corporate companies? So a little bit of background. I’m sure we’ll get more into kind of the nuances of what Aarva does, but you know, speaking to your carbon credit question, I think and ranching in particular is just an unbelievable industry to capture a lot of incremental value in which isn’t really happening full-scale to date and it won’t be for a while, but there’s just so many avenues in which we could be stewarding the land and we’re generating our ecosystems through animal agriculture, which is just such a historic and beautiful system in which we can thrive and manage, and carbon credits are just one piece of the equation. And I’m really curious to you know, hear and get updated on what the Wilkes Brothers are saying and what they’re pitching, because I do think there is a lot of opportunity there. While you know, the bio-nutrient exchange that’s happening in Western rangelands might not be as much as it is and say the you know Great Plains of, you know the Central United States, the scale of which change is happening on maybe not 100 acres but 1,000 acres or even 10,000 acres. A small bit of carbon value can add up so that can bring a lot of value to ranchers. But there’s also a lot of opportunity to capture on value in terms of reducing enteric fermentation, you know, utilizing different applications or different technologies to help improve your grazing management, to help improve your grassland and forage management as well. So I think there’s a lot of emerging opportunities out there to capitalize on and I’m really curious to dive a little bit more into those with you.
Speaker 1: 5:46
Thanks for tuning in to the Ranch Investor Podcast. We have some exciting things coming your way. Today, we’re going to be talking about carbon credits and conservation type technologies. I want to ask all of you, get on social media, share this with your friends, let us know what you like, let us know what you don’t like. It helps us tremendously in providing content and deciding who comes on. So please reach out, give us some feedback and let us know what is and what is not working for you. Okay, so, quinn, you had mentioned CI score. What is that?
Speaker 3: 6:53
CI score refers to carbon intensity of grain. There really isn’t a metric for beef yet, or anything in animal agriculture, but it is derived right now out of. Most people are using a technology, software called the GREET model, which has been developed by the Department of Energy, essentially calculating the greenhouse gas footprints of a bushel of grain, whether that be corn, sorghum, rice, soybeans, etc. And CI scores are particularly of importance in the biofuels industry. So I’m coming into 2024, here the 2024 growing season crops that are grown, I guess, that are seeded this spring and that will be harvested this fall, and going into biofuel production 2025 will be eligible for 45Z tax credits. I don’t know the exact dollar amounts, but the tax credits that are going to be generated through sustainable aviation fuels and sustainable biofuels are going to be significant and those will be paid out on a reduced CI score per bushel of grain. So if your grain is below a certain standard I believe 29 tons of carbon per bushel, then we will be getting farmers, we’ll be getting paid out. Hopefully I mean right now it’s going to be the processors of the fuel, the refineries, that are going to be getting paid and hopefully we can shuffle that money towards farmers and farmers and producers who are producing that low CI corn. Now, when it comes to beef, there’s a whole nother world that could open up there in terms of what is the carbon intensity or beef and you know beef intensity of a pound of red meat or a pound of chicken meat or maybe 10 grams of protein. You could really break it down into you know whichever way you’d like to slice it. But there’s a lot of opportunities to move the needle there because you know you think about a bushel of corn. There’s only X number of inputs that go into a field to produce X number of outputs on a corn field Beef. You have grain going in, you have forage going in, you have transportation. There’s a lot more hands that that beef might touch before it gets to a processing facility. There’s a lot of different ways that you could reduce the carbon intensity of a pound of beef or unit of beef. And so there’s it’s an interesting market that we can exploit, hopefully here in the near future.
Speaker 1: 9:41
All right, quinn, you are a good Westerner, you’re from Utah, you’re my fellow alumni at MSU. I’m going to assume that you’re not going to bullshit me here when you say Department of Energy makes me a little nervous. This sounds like compulsory government mandated standards developed in an ivory tower in the swamp of Washington DC. Kind of get a little nervous when when you start pitching that this is a metric developed by the, the fourth branch of government, who’s? They’re only here to help, right? They’re, because they know best. They know better than all of us landowners and producers. So they’ve got the master’s degrees, the PhDs. They’ve been in the Bureau for four terms, four different presidents. They know what. They know, what’s best for us. Is this a carrot or is it a whip? Is it going to be compulsory or is it an incentive? If it’s an incentive, how is it funded? This is kind of making me nervous. But is it voluntary still, or will it become compulsory, mandated?
Speaker 3: 10:55
It is voluntary at the moment. I think that’s a really great question and from a security perspective, energy is of a most importance and if we can be moving towards a more resilient energy economy, then that allows the United States a lot more freedom on the global playing field, and the Department of Energy is partly responsible for developing new energy technology to understand how we can grow and support and make our energy infrastructure more resilient, and I think that’s really important from a geopolitical standpoint. That is something that Arva’s been working on. From a research perspective at our farm is showing can we produce carbon negative corn to the farm gate, corn that actually puts more carbon in the plant, biomass and in the soil than it takes to produce that corn itself, and that’s something that we’ve shown as possible and that’s been something that we can show through the DOE, which means that, moving forward in the future, we can potentially produce carbon negative fuels, which is really, I think that just is an unbelievable opportunity that could really move this country forward. And when it comes to what this means for farmers, producers, autonomy and right to produce, it’s a slippery slope that we all know and right now it’s voluntary. This is going to be a program that runs through 2027. I think we’re going to learn a lot about what is actually contributing to low CI commodities and, yeah, I wish I could speak more on whether it will turn into a whip versus the carrot that it is. Right now. I’m not as well versed in policy as I should be to speak on that topic.
Speaker 1: 13:06
Now you’ve mentioned ARVA, that’s.
Speaker 3: 13:08
ARVA correct, correct. Yes, that means Plowed Field and Sanskrit.
Speaker 1: 13:14
In Sanskrit that means Plowed Field, so they’re trying to address the issue of fallow and heavy tillage, I guess, which does produce carbon. It’s not carbon negative. Now I’m not here to debate the resiliency of coal, natural gas and petroleum. I can’t make any money on coal, natural gas and petroleum, so I’m not going to debate it. When it comes to an efficient energy system that pulls billions of people out of poverty, it’s easy to ship and store. I’m not going to debate that because I can’t make money on it, but I am interested in carbon and whether climate change is a religion. Well, it is a religion, but whether it’s a real thing or not, I can probably make money there too. So I’m interested. How can so me as a landowner, or me as a broker and the brokers listening on this platform? What should we be aware of? I mean, how do you get involved today and say you know what? I don’t necessarily like to pallet this. It’s not that digestible to me, but a few extra dollars is.
Speaker 3: 14:39
Yeah, absolutely. I think there are great hosts of resources out there. There are great movements that are bringing incremental value to ranches. I mean, you’ve already talked about Chris and the Western sustainability exchange. I think that the program that they’re operating is fantastic and it’s bringing a lot of opportunity to Western ranches. There’s a company out there called Cataride Carbon. I’m not sure if you’re familiar. I’m not. They are founded by Ben Verries and Kevin Silverman. Ben worked for Vents and help Virtual fencing. Yes, exactly, okay, correct, kevin helped on that project. They’re both extremely well versed in the carbon markets and they have been able to develop carbon solutions that are also pre-financed, somewhat like the Western sustainability exchange programs, and they’re starting to touch quite a few more acres and are bringing especially with carbon sequestration solutions, in particular in ranching. We all know that increasing the frequency of your grazing, adapting your grazing specifically to the perennial, historic perennial forages that are supposed to exist on your pastures are things that need to be happening but that can be extremely capital intensive From an infrastructure perspective to implement, and so pre-financing projects for carbon can be really important and almost and certainly necessary to move the needle on a lot of these properties. But brokers and landowners in particular should be looking at thinking about their operations holistically, which they already do, but at each step in the process, where could we maybe capture some more value or start thinking about a ranch in a new way? For example, how could I move my salt mineral around my pasture in a way that allows my forage to be grazed more evenly? Could that be something that’s satellite assisted where we’re picking up on biomass forage from a remote sensing perspective so we can see okay, we have X number of pounds more per acre of forage in this piece of my pasture that I wasn’t really aware of. Let’s move some salt mineral over there to make sure that it’s getting grazed more evenly. That’s something that doesn’t require nearly as much infrastructure. That could be scaled through technology and hopefully in the near future have some sort of environmental asset or value attached to that activity so that ranchers could be documenting that practice or that those set of activities and be getting paid out on that. Could you be adding supplementation or you know remensin, for example, which can help reduce enteric fermentation. Can you add that to your supplementation program and then be tracking those changes throughout the year? There’s a lot of different ways that you could be looking at operations to be moving the needle just a little bit in terms of your carbon or methane emissions and be working to remove that Now. Do the markets have programs in place to pay out on that yet? No, not necessarily, but this is something that everybody should be thinking about because those opportunities will exist in the future.
Speaker 1: 18:21
That sounds. Some of those practices sound a little bit like enhancements through the NRCS, through the CSP Conservation Stewardship Program. Are you, arva, have you guys been able to write checks and basically implement these voluntary enhancements?
Speaker 3: 18:45
We have been able to write checks in row crop agriculture nothing in animal agriculture yet we would love to be able to do that in the near future. It’s not full transparency. Reventing is not our bread and butter. We have been working in row crop agriculture for a significantly longer period of time. That’s where most of our experience is. We do see a lot of opportunity in the animal agriculture space and are hopefully moving into more solutions there. So you bring up NRCS, equip, csp et cetera all fantastic programs. The voluntary markets in some way are just translating that to a privately funded program. We know that a lot of these NRCS and CSP practices are incredibly beneficial to the environment. There’s a reason that they exist, but they’re funded through taxpayer dollars. Is there a way that we can take Fortune 500 dollars and start moving the needle on all these practices? I think that’s what the voluntary markets are doing to a greater extent and something that we want to continue to move forward.
Speaker 1: 20:02
Well, that was my next question. I’m glad you touched on it. Let’s keep going down that route of where does the money come from? So ARVA is a facilitator. They’re kind of a broker, originator of carbon credits in a voluntary market. So the row crop farmer and someday down the road the rancher produces the carbon credit. Arva verifies it, certifies it and then sells it to these Fortune 500 companies. Is that how that works? So the Fortune 500 companies, it’s their money, it’s not taxpayer dollars.
Speaker 3: 20:45
Correct. Yes. So for the checks that we have paid out on, I’ll use our Nestle Purina program, for example. We worked with Nestle Purina and Riceland Foods, which is the largest rice cooperative in the country and possibly even the world, and through Riceland and their growers we were able to measure, quantify, scope. Three emissions reductions actually not carbon credits. Mint that asset, if you will, and then sell that to Nestle Purina, showing them the X number of tons of carbon were reduced within their supply chain through these practice implementations over the past year. This is a program that we’ve scaled 10X in the past year. So our first year was about 10,000 acres. We’re scaling this up to over 100,000 acres this year of rice in the Mid-South, which is just fantastic. But as we move forward and start to develop more programs with more retailers and midstream partners across the country, we’re working with them to identify what are the needs of the downstream buyers, what are the needs of the CPGs that you’re selling your commodities to, whether that’s any sort of grain to be used for food or biofuels, et cetera and then finance from those buyers who are looking to change their sustainability goals, make an impact there and then ultimately shuffle that payment back to the farmer, so very similar. A lot of other people are trying to do this. Some of the names that show up are Regro, indigo, et cetera, and I think Ava is uniquely positioned, through their technology, to really help scale this and make a big impact, bigger than what’s been done to date.
Speaker 1: 22:48
Now, how are these contracts structured? Is it one big payment upfront or is it an annual payment based on your practices, your additionality, the amount of carbon you have, sequester that they are able, that Ava is able, to mint and market.
Speaker 3: 23:08
It is an annual contract at the moment. So based on the operational activities that influence either carbon sequestration or carbon emissions reductions from your operation, then you’ll get paid out on that on an annual basis. I think the pre-financing piece is tough because, as we know, each individual ecosystem, each individual unit of land, operates in a completely different way than maybe the one next to it and maybe it’s not so different. But maybe this one field is a little bit lower and because it rained a bunch, you couldn’t get into it, apply fertilizer as soon, or you had to till it one year because there was no way that you could get into it otherwise. And you’re having to balance climate variables with operational nuance, et cetera. Pre-financing, which could put a lot of risk on that producer, because if they have to change anything in order to be successful just year over year, then that might eliminate their opportunity to capture value on carbon down the road. And so being able to pay out year over year, I think it’s a lot more flexibility as well as risk reduction in some regard to the producer. Obviously, if you’re getting pre-financed, that puts less risk on the producer, maybe, and more risk on the person financing the project, but it also could come back on the producer, because if they’re locked into a five year contract that’s been pre-financed, then they might have to be farming or ranching a particular way for that five years to be able to capture that value. So sometimes it’s a little bit of a chicken and the egg problem, but I think that the annual payout structure is a lot more lucrative for a producer. It gives them more flexibility in how they can run their business.
Speaker 1: 25:17
How long are people locked in for with these contracts? It?
Speaker 3: 25:20
depends on the asset that’s being generated. A scope three emissions reduction Contract is an annual contract. A carbon credit contract could be anywhere from five years or more, but right now most of our business is in scope three emissions reductions. 90% of the emissions footprint of most of these companies comes from scope three, so reducing that is a little bit more of a feasible impact at this moment. I think carbon credits are challenging. There’s a lot of red tape and administrative work and there’s a lot of good things happening there. We have programs through Vera that our company’s established and are leading the way in. But as we are looking at immediate impact at the moment, scope three yearly contracts seem to be where most of the meat is and carbon credits are necessary. They help inform how we’re thinking about this market from a macro perspective, but they’re a little bit slower to be realized at this point.
Speaker 1: 26:38
Now, what is scope three and who is Vera?
Speaker 3: 26:42
Scope three emissions reductions are the overall indirect emissions of a company. So, for example, we use Tyson. Tyson’s scope one emissions are the direct emissions that they produce through their activities, whether that’s processing beef, pumping water to their facilities, the electricity that they use to run the lights and maybe air conditioned units in their chicken houses, et cetera. Those are their direct emissions through their own activities. Those are scope one. Those are what carbon credits would potentially offset, because you sequester a unit of carbon on the ground. You can offset a unit of carbon that was produced through keeping the lights on. Scope two emissions are through transportation. They’re a little bit more nuanced and that’s kind of a small piece of the market. And then scope three are all the emissions that occur within Tyson’s supply chain that aren’t directly from their activities. So all the emissions from the grain that is going to feed their animals, all the emissions that are produced in the ranching operations that are contributing to their ultimate finished goods, et cetera. So obviously that’s gonna be a much, much bigger scope than just their direct emissions. And so if we can be moving the needle incrementally on a single farm or a single ranch on a large number of acres, then that can help reduce Tyson’s footprint in a much bigger way than, say, maybe offsetting their direct emissions at their operational level. Vera is a third party validator verifier within the carbon credit marketplace. I’m sure you’ve heard of them quite a bit and they act as somewhat of a, you know, quasi-regulator in the industry to make sure that carbon credits are being are actually being produced, that a carbon credit is what they you know is what it’s being sold as, but it’s actually a ton of carbon was actually put in the ground or half a ton was actually put in the ground. They’re the ones who say that, okay, yes, based on the science, based on the way that this project was executed, this happened. I think there’s a lot of you know mumbling around Vera from the marketplace, especially from producers. I’m sure they have a lot of questions. I do think that you know we’re in an interesting place where, as we continue to get more information across the industry that companies like Vera are gonna have to adapt to meet more specific data needs and producer needs because carbon and they are adapting, they are developing regulations within the scope of the industry, so we could dive into that.
Speaker 1: 29:54
I wanna take a tangent so bad and go down this to understand it further. So the scope three of Tyson hypothetically is let’s just use a very specific hypothetical. Say Tyson has 60,000 trucks on the road and each year they are replacing 20% of their tires. So that is 12,000. Well, times 18. Now the math’s getting a little away from me. The mental math. It’s a lot of tires. And then that rubber comes from Brazil. It is shipped up on a ship. That ship has to wash its hull every six months and then the contractor who’s washing that ship’s hull has to bring in supplies from China. I mean, that supply chain seems never ending. There is no end to it. How do they put a carbon value on that? Because it seems in the perpetuity that’s never ending.
Speaker 3: 31:16
The accounting perspective on that is just unbelievable and I haven’t fully dove into like, okay, what are the all all of the accounting like practices and principles and guidelines which they’re following to calculate these? There is a standard called the science based targets initiative that a lot of these companies are signed into that help drive how this, how these accounting methods are being standardized across the industry. I do think there’s probably, you know, there’s definitely a lot of hearsay in terms of like, well, you look at Tyson and then you look at Walmart and how they’re, how are they accounting versus each other? That’s probably, you know, there’s going to be a lot of significant difference there In any regard. There’s a lot of places within that supply chain in which there could be positive change happening in terms of your emissions. So how is you know, thinking about just rubber tires, how is, how is each step in that, in that production of a tire, being reduced just a little bit, which could then contribute to a big reduction in the overall carbon footprint of just that tire? So if you could be making little incremental changes at each step along the way, being able to measure that, and you’re really affecting the end product quite a bit and doing that in animal agriculture and row crop agriculture where incrementally we’re changing the footprint of a unit of grain or unit of beef so that by the time you get downstream to the end product that we’re actually making a significant difference in how impactful and extractive that that good was, you know, compared to what it was last year.
Speaker 1: 33:05
It seems to me that the best measure of efficiency, sustainability, climate resiliency is the double bottom line. It’s profit. That profit is the pent ultimate, an ultimate measure of efficiency. The resources you have used have created more value you have reduced. I mean, every business wants to reduce their expenses. That’s how you create profit. I’m not going to get into that because I want to know how to make money with carbon. I mean, if this Maybe some listeners are short on carbon, maybe some are long and it seems to me, quinn, that if you’re short on it, if you don’t think it’s going to be a real thing, it it’s not going to materialize as the as we have a change of administration, the inflation act kind of goes away. Maybe the economy enters a more difficult time and these first world problems, like like the religion of climate change, they fall out of vogue. So if you’re short, you might as well just sell your carbon rights today. It’s like short the market. If you’re long, you’d probably want to hold on to it because you think there’s going to be more value in the future. I mean, your, your present value, your net present value, if you’re short today, is higher than all future cash flows. So so, short it, sell it, get out of it, you know, call it, call it bullshit and move on, make a little money. But if you’re long, you, if you’re long, you kind of just want to study it, don’t you? And? And see how can I optimize this as a landowner and prepare myself for the next 1015 years, might say. The average hold period is seven to, well, 14 years. It’s going to be longer than seven now, but probably 10 to 20 years are. What are you seeing with? Is now a good time to get into it, or should people? Is this going to be the real thing? Is this going to be worth more in the future than it is today?
Speaker 3: 35:26
I do think it will be worth more in the future than it is today. But my, my advice or my opinion on that would be do what’s working best for your operation today. And if any good business owner is going to be doing, doing all that they can to improve the health and the but the health and the profitability of their land, and I think, as as more people are researching this and understanding this from a business perspective, people are coming to understand that you know improved soil health, you know more carbon in the soil can contribute to a lot of downstream benefits on on on the property water savings, increased forest production. You know healthier crops, more biodiversity in their land. There’s a lot. There’s just so it’s a full trickle and ripple effect. Once you start making that transition and as people start, I think that’s something that people should be thinking about and doing anyways. Now. Are there programs that can help you capture value on that? Yes, are there going to be more programs in the future that are maybe more tailored or specific or customizable to your specific operation? That allows you to capture value on the healthy, responsible, regenerative things that you’re already working on and striving towards today? Absolutely, now are there programs that are going to help move people across the line to maybe start doing that where otherwise they wouldn’t Absolutely. And if that’s something that you’re interested in or you think would work for your operation, by all means do the research, ask the questions, figure out what’s going to work best. You know it’s kind of tried to say that there’s not a one size fits all solution, but that is the case. Every landowner is in a different position, and so you know, my hope is that, as these markets grow and do become more valuable in the future, are there continue to be more diverse solutions to help meet landowners where they are in their operations and really start moving the needle and becoming a synergistic approach to how value can be captured off of lands where, depending on you, know how far along you are in your journey to creating greater profit and abundance from your property, that there’s going to be some sort of market to help you capitalize on that journey that you’re taking.
Speaker 1: 38:00
So how do I, how do I get started if I’m, if I’m actually short and I’m like, hey, I just want to, I just want to sell all future rights of carbon today I don’t think this is here to last, I’m going to short the market. How do I? How do I get started? Where do I go to just say, hey, who wants to buy my, my future carbon, all future carbon production? I’m, I’m getting out of it. Make my money today.
Speaker 3: 38:28
I would talk to, frankly. I would talk to catarai. I would talk to, I would talk to Western sustainability exchange and see how much room they have. I know that they have a quite a long list of people that are interested in working with them and I would. I would talk to our. But I think that we have. We have some unique perspectives and maybe we don’t have a program for you right now, but we can help you think through. You know what does that look like. Maybe I would be very tentative to just say go ahead and sell all your carbon rights. I think that the value of your land is something that is very important to hold on to. You know you can produce carbon all you want and get that credit, but don’t sell the right to that credit. You know that’s, that’s your credit and understand like, be very wary and diligent in your understanding of who owns that, because at the end of the day, it’s the, it’s the landowner who should own it and should have say over where it goes and just selling the rights to future carbon that can be. You know, what is produced is something that, yes, maybe really profitable for your ranch down the road, but it’s just something you should be very, very cautious about. Not saying it’s a bad thing by any means, but just be extremely diligent and in who you’re, who you’re selling to and how you’re going through that process. And I think there’s a lot of people out there that are doing great things and really really helping me farmers and ranchers where they’re at. But yeah, I guess that’s all I have to say on that.
Speaker 1: 40:09
Now, if I’m long in the market and I think the boy, this is going to be a good enterprise, I’m going to add this to the many enterprises I have on the ranch or the farm. So I’ve got land, livestock and within land I have, I have government programs, I have leasing, I have conservation, I have hunting enterprise and I want to add this as another enterprise. I think this is going to be a good cash flow. Or I’m long in the market for the for the foreseeable future. How can I get set up to start optimizing? Because I’m a capitalist, I want to, I want to produce. If I’m long, I want to produce as much carbon sequestration credits as I can and then I want to value add market those. So how do I get set up to start this new enterprise that I’m going to hire my, my daughter, to run when she’s 18.
Speaker 3: 41:14
It’s going to be a very similar approach to how it would be selling your assets right now. I think there’s. So we have project in the carbon space, you have project developers, you have, you know, people who are investing in, specifically in ranching, in the pre financing of of infrastructure development to help realize some of these credits, etc. And I’m not on the contracts and I can’t speak on the contracts that all these other companies have with the growers. I haven’t read, read, read any of those you know. I’m not aware of if this is and this is applying to both short and long markets, like I don’t. I don’t, I’m not aware of whether that asset is being the right to the asset produced is being sold to the finance, or or if the right to the asset is something that’s being sold and then sold further down the line. I I’m not sure and I can’t, I’m not going to speak to that, but if I were long on the market, I would make sure that the right to that carbon is in my name so that I can hold on to it and, 10 years down the road, sell it when it’s more valuable. Now, if you are working with a project developer that you know is requiring that the financer has right to those assets. That’s the only way that you’re going to be able to finance the project on your property. Then go ahead, but that’s probably a better move if you’re short on the market. Does that, does that make sense?
Speaker 1: 42:48
Oh, it makes sense enough. Yeah, you’re saying, yeah, just keep the right. And I was thinking how do you, how do you develop it, how do you foster it, how do you nurture it, so that you know you’re going to, you’re going to produce more than the person who’s not thinking about this, who’s just, you know, the neighbor you’re going to. You’re trying to set your place up to produce 1.3 tons of carbon per acre when your neighbor is only producing one.
Speaker 3: 43:20
Yes, absolutely Okay. That makes more sense and I think that we continue to learn more about how we can move the needle bigger in systems in terms of carbon sequestration and or emissions reductions. I’d say you know, increasing the rotation of your animals is way too broad of a way to be thinking about it. How are you adapting your animal movement to your forages? How are you adapting it to contribute to a much more natural and historical system in which those perennials on your property were grazed? I mean, that’s going to be contributing an immense amount to your you know just the health of your land overall. You know large scale ranching is. I mean, cow-calf operations are tough because there are only so many needles. You know only so many things you can move, given year over year. But thinking about how you’re adapting your land to meet the perennial forage needs of your property and also thinking through supplementation things, I wish I could speak better to this. I’m not a grazing consultant, you know. I’m not going to claim to be, but this is something that we would work with you know, a third party in the. Our goal would work with a third party in the industry, hopefully to help drive like more customized solutions to a specific operation, to help them understand okay, well, what are the best opportunities from a carbon perspective that can be driven out of this property? We’re not going to be the ones telling you what to do because we’re not the experts there obviously.
Speaker 1: 45:16
Well, it sounds like that would be. A recommendation is to work with a grazing natural resource forage consultant to prepare yourself for additionality, for producing more carbon credits than that which nature would produce on its own.
Speaker 3: 45:34
Speaker 1: 45:36
What, what technologies are coming along? You kind of mentioned this like aerial satellite imagery. I don’t know if that’s the wrap tool via BLM or if that’s a basal monitoring, what goes into that, but what other technologies are exciting. You mentioned ecosystem services for the. For the tech hungry rancher, investor owner out there, what, what should we be aware of? What’s coming down the pike?
Speaker 3: 46:09
I think remote sensing is is a big one. So any sort of satellite imagery is something that we’ve noticed in just having and having conversations with ranch owners and people in the industry is that, beyond just the ability to have technology that will produce a carbon credit for them, they want something that’s going to influence their management, decision making, and I think that remote sensing and or understanding of cattle movement are going to be huge contributors to that. So you know I’m not sure how familiar you are with you know all the different ear tag companies that have. You know their own version of mesh networks or Bluetooth etc. That you know allow you to visualize and track your animals through, through pastures, understand, through. You know key maps like where, where is grazing being concentrated, how often and frequently are these animals moving, grazing, etc. Being able to pair that technology with you know satellite satellite imagery and understanding, okay, well, where are the? Where are my animals grazing, how often are they grazing? Where is the biomass existing on my property year over year? And allow, allow me to more evenly and evenly manage the grazing and the forging across all of my property. You know there isn’t a there isn’t really fully integrated solutions yet that incorporate all of those different pieces of the puzzle you know you start to tack on you know technology that allows you to track all of your vaccinations and AI schedules and genetics and etc. There really isn’t a full scale solution that takes all those into account, but you know there’s, there’s pieces of the puzzle everywhere. Putting them all in one place is is still a challenge.
Speaker 1: 48:12
Optimizing managerial decisions. So the many, many multi-variate decisions that must be made and and the input data I mean growing degree days, precipitation, market price of calves I mean it’s pretty amazing. Yeah, I would. I would think I’m with you that there should probably be some exciting managerial optimization tools coming down.
Speaker 3: 48:44
Yeah, I think so and I think Arva is interested in developing, you know, something that you know is aligned with our overall business strategy to help in in ranching etc. Our, our technology was based in agronomic management. How are we using all these different variables, whether that’s remote sensing or NAS, agricultural data that’s come through census information, from you know your machine data, for example, you know your John Deere tractor, or through climate corporation or through Raven slingshot? How are we pulling all this data in to help influence better management and decision making on your property and then understanding okay, well, based on all these management operate, you know variables can be better understand the environmental impact that’s happening through that and I think that we’re well poised to help move the needle on in ranching a little bit. Can you be integrating with different management tools and understanding holistically new ways of managing a ranch and then also being able to capture the environmental value that’s happening out of those changes and management decisions? Yeah, I don’t. I don’t know the. I don’t know every little bell and whistle and shiny object out there in the market, but there’s plenty of them and at the end of the day it’s going to be what, what moves the needle most at the cheapest costs. I think, at this point, with the most, with the most realized profit that’s going to going to win.
Speaker 1: 50:22
Well, quinn, you are in Park City, utah today. Aren’t you next going to Kers Kersig stand to to play a game with the dead goat?
Speaker 3: 50:36
I will not probably be playing Coke brew while I’m in Kyrgyzstan. I’ll be going there with a good friend who will be. I’m more curious on the culture and just what’s happening over there in terms of animal agriculture. I think it’s a really interesting place that you know, unlike America, has only had property boundaries for 10 to 20 years. There’s still quite a few nomadic peoples that live over there and I’m just really curious to understand better understand pastoral and nomadic nomadic agriculture and what sort of opportunities exist over there in the future. So yeah, it’s a really interesting part of the world.
Speaker 1: 51:19
Coke, Coke, a maroo, Is that how you say the Coke brew? Yeah, it’s kind of Coke brew and that’s kind of like Polo rugby with a dead goat right.
Speaker 3: 51:30
Yeah, exactly so think about rugby on horseback, and the football is a dead goat. You have scrums, you have breakaways, you have leather whips. It’s quite a fascinating game, and I haven’t witnessed it in person, but I can’t wait to do so.
Speaker 1: 51:51
Well, your buddy, he’s pretty good at it, isn’t he?
Speaker 3: 51:54
Yeah, lad, he uh Lad, yes, yeah, lad, how he runs the American Coke Brew Federation. You know however many people are in that organization. I don’t know, it’s probably less than 10. That sounds like a very niche niche group.
Speaker 1: 52:08
It is yeah.
Speaker 3: 52:09
It is one of a kind. He’s over there right now representing the United States and playing on behalf of the US, but yeah, that’s a whole other conversation. He’s an amazing guy and really lucky to get to know him and be a part of what he’s trying to do over there.
Speaker 1: 52:28
Boy and Pita doesn’t like American rodeo. How would they feel about playing rugby polo with a dead goat?
Speaker 3: 52:36
Yeah, we’ll just make sure it’s not televised.
Speaker 1: 52:41
So Kyrgyz, how do you? Kyrgyzstan? Yeah, Kyrgyzstan, Kyrgyzstan. Well, that sounds very exciting. Uh, when do you take off? How long are you going to be over there for?
Speaker 3: 52:52
Hopefully, uh, hopefully a month or so, leaving in February, March I got to get the exact dates from Lad once he gets back from this trip. But yeah, hopefully we’ll be over there for a good bit this spring, get a lay of the land and I imagine that I’ll be spending some more time over there.
Speaker 1: 53:08
On the future, Are you on social media If people want to hear more about uh carbon credits, uh everything you’ve pitched for technology, ecosystem services, and then, uh, are you going to be posting pictures of uh dead goat rugby polo?
Speaker 3: 53:27
Yeah, I am on LinkedIn. I don’t, uh, I don’t do too much on Instagram. Uh, arva does have their own LinkedIn as well as a website. I’m happy to share that with uh, with you, to. You know, if you end up posting this and it’s just arvinteligencecom, uh, arvintelligence on LinkedIn and, uh, my LinkedIn is just Quinn Holland.
Speaker 1: 53:50
Arva, arva Intelligence. Yes, sir Boy, that’s uh, that’s quite the dichotomy this technology intelligence company and playing dead goat rugby polo.
Speaker 3: 54:05
Yes, sir, it’s, a wild world we live in.
Speaker 1: 54:08
Well, that’s uh. I hope you do post some pictures. My younger, my younger brother he’s bigger than me but he, he uh helped set up a Hurford operation in Kazakhstan, which is the foothills of the Himalayan mountains and it it is incredibly gorgeous. So please do, quinn, please post some pictures for all of us to see how gorgeous it is wild, open and free. And thanks for coming on the ranch investor podcast. Do you have any? Any final asks of this audience?
Speaker 3: 54:41
I would just say that um, you know, do your research be educated in in the solutions that are being brought to you? Um, you know, ask, ask good questions, uh, and find people that are willing to work with you where you’re at. Um, there may not be an immediate solution for your operation today, but I’m really hoping that there will be one in the future for everyone.
Speaker 1: 55:06
Well, uh, thank you. Thanks again, Quinn, and I look forward to staying in touch with you and thanks everyone for tuning into the ranch investor podcast. Again, I got to ask you uh, leave me comments, share this with your friends, like it on Spotify, Apple, iTunes. But, uh, definitely I need the feedback, so let me know what is and what is not working for you so we can continue to bring bring what I think is valuable information from my network. Thanks again. I want to take a minute to ask that you join our discord channel. We have been working on a way to bring everyone in on the discussion and the conversations anonymously, so now we can join our discord channel and ask questions, make comments that directly go to us and the guest. Uh, we find this better than social media. We do want you to make comments like share, do all that bullshit on social media but definitely, if you want to have a engagement with other listeners, let’s get on discord and start the discussion.
Speaker 2: 56:17
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