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Agricultural Streaming: Harvesting Opportunity

AG-STREAMING HARVESTING OPPORTUNITY AG-STREAMING is a relatively new concept poised to take advantage of this opportunity by bridging the gap in funding needed for farm working capital. MANY FARM OPERATORS ARE SIGNIFICANTLY UNDER CAPITALIZED, Traditional forms of funding like banks are drying up, and farmers are now welcoming financial investors. OFFERING EXCELLENT AND OVERLOOKED INVESTMENT OPPORTUNITIES. AG-STREAMING Companies make upfront payments to farmers who need capital. In return, these Companies receive the right to purchase a specified share of the farmer's commodity at a fixed price for an extended period of time into the future. The ag-streaming firm makes an up-front payment to the farmer for a crop production interest. Crops are sold, and free cash-flow is re-invested in A consulting agrologist is assigned to work with the farmer. new streaming contracts for compounding returns. HOW AG-STREAMING WORKS If improved agronomy results in excess yield, the ag-streaming firm can purchase additional crops at same fixed price per tonne. The agrologist and farmer worktogether to grow the best possible crop. The farmer delivers the ag- streaming firm's share of crop to elevators, and is paid a fixed price per tonne. · FINANCE THE INTERGENERATIONAL TRANSFER OF THE FARM Ag-streaming is targeted at established farms possessing the agronomic skills to grow crops, but LACK CAPITAL TO: · ACHIEVE PRODUCTION GOALS OR YIELD POTENTIAL • TAKE ADVANTAGE OF LARGE EXPANSION OPPORTUNITIES Here's a breakdown of the CAPITAL NEEDED to purchase and maintain a 4,000 acre farm: PER ACRE CAPITAL REQUIRED FARMLAND $1,000+ $4,000,000+ EQUIPMENT -$350+ ~$1,350,000 ANNUAL INPUTS $200+ $800,000 TOTAL $1,550+ $6,150,000+ Farmers seeking to engage in M&A activity with a neighboring farm or those wanting to install new irrigations systems to improve production often LACK THE FUNDS to do so. AG-STREAMING OFFERS THE CAPITAL NEEDED TO FINANCE THESE ENDEAVOURS. BUSINESS MODEL BENEFITS For farmers it's a game changer: Farm growth is accelerated and productivity improves. It also gives farmers bargaining power with grain handlers and input providers. 6-12% 10% FLEXIBLE CROP MARKETING PROGRAM 3% TOTAL INHERENT COST OF CAPITAL INTEREST COSTS 39-65% DISCOUNTS FOR CASH PURCHASES 20-40% BUYING INPUTS OFF PEAK-SEASON $25 - $30 per acre savings on fertilizer alone, reducing fertilizer costs by 20 - 25%. It'sascalable and diversifiable model that creates By buying and applying fertilizer in the fall, spring seeding logistics are improved and de-risked. barriers to entry using key relationships. The model maintains a strong risk/return profile with meaningful future growth potential. BUSINESS MODEL RISKS POTENTIAL CONCERNS MITIGATING FACTORS CROP SHORTFALL Geographic diversification Streaming contracts call for fixed tonnage and are not yield dependent Cropinsurance Argologist on every farm helps ensure optimum crop yields Ability to accept other commodities of equal value in lieu of contract crop COUNTERPARTY RISK Contractual protection on the "use of proceeds" Strong security covenants embedded into every contract Term life insurance provides an "easy exit" in the event of death of the farm operator AN OPPORTUNITY FOR GROWTH CROP VARIETY GLOBAL EXPANSION Crops like grains (wheat, barley, oats, durum), pulses (lentils, peas, beans), and oilseeds (canola, mustard, flax) provide numerous streaming opportunities Overseas farmers and food companies working with a variety of agricultural commodities create global opportunities. It is expensive to be poor. AG-STREAMING helps farmers drive down their cost of capital and unlock their production potential. PRESENTED BY INPUTCAPITAL THE AGRICULTURE STREAMING COMPANY VISUAL CAPITALIST Educating a new generation of investors on resource investing and management VISUAL CAPITALIST

Agricultural Streaming: Harvesting Opportunity

shared by visualcap on Nov 15
See how “streaming”, a business model adopted from energy and metals companies, works as it is applied to agriculture. Many farm operators are significantly under capitalized, offering excellent ...


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